Biogen buys rights to Stoke’s rare epilepsy drug

Dive Brief:

Through a new deal, Biogen has bought access to a potentially first-of-its-kind drug that some doctors and analysts see as a promising treatment for a rare form of epilepsy.
Biogen on Tuesday agreed to pay $165 million upfront for exclusive rights to sell the drug, called zorevunersen, outside the U.S., Canada and Mexico. The company also agreed to split external development costs 30-70 with the drug’s owner, Stoke Therapeutics.
Stoke may receive as much as $385 million more if specific development and commercialization goals are hit. Per deal terms, the Massachusetts-based biotechnology company also granted Biogen an option to license rights to certain follow-on products that work in similar ways as zorevunersen. The drug is being evaluated as a treatment for Dravet syndrome, and is currently on track to enter late-stage testing this year, with results expected in 2027.

Dive Insight:

Biogen’s top-selling drugs, which include the rare disease medication Spinraza and a fleet of multiple sclerosis treatments, are no longer the growth drivers they once were. Overall revenue at the big biotech has declined over much of the last five years, a trend it expects to continue in 2025.

Investors are eager for Biogen to add more lucrative products to its portfolio, a task that can be done relatively quickly through dealmaking. CEO Christopher Viehbacher has been in favor of that strategy since taking the helm in late 2022. Under his command, the company dropped $7.3 billion on rare disease drugmaker Reata Pharmaceuticals, $1.2 billion on immunology specialist HI-Bio, and recently tried to buy out its own development partner Sage Therapeutics.

To Paul Matteis, an analyst at the investment bank Stifel, the new agreement is fitting since Biogen already has a foothold in the field of uncommon nervous system disorders. Not only does the company have Spinraza, it also sells the Friedreich’s ataxia drug Skyclarys — the main asset it got from the Reata acquisition.

“Strategically, it’s very easy to see why Biogen sees this drug as a logical fit within their portfolio,” Matteis wrote in a note to clients, “and the upfront payment is pretty modest relative to what zorevunersen could sell in a bull case.”

That case, however, rests on zorevunersen emerging victorious from late-stage testing. Matteis argues the odds of success are good. But there’s pressure. The Stifel team spoke to physicians, who were clear that the efficacy bar zorevunersen needs to meet is “very high.”

TD Cowen last year surveyed 25 epilepsy doctors and, according to the bank, 60% viewed Stoke’s drug as a more promising alternative compared to current treatment options for Dravet syndrome.

Even if the drug ultimately does secure approval, there could be commercial challenges. It would be given intravenously “in a market full of oral options,” Matteis highlighted. There’s also “an open question whether zorevunersen can garner rare disease level pricing” in non-U.S. markets, given that other seizure medicines like Epidiolex and Fintepla have struggled.

Ultimately, Matteis sees the Stoke agreement as an “interesting deal for Biogen, albeit one that won’t change the investment thesis here in the near-to-mid term.” He said about the same when Biogen put in the offer to buy Sage.

Biogen shares were mostly unchanged in morning trading Tuesday.

Last spring, Stoke released more data from a small study of zorevunersen. The trial showed a high dose of the drug was substantially better than a placebo at reducing the frequency of convulsive seizures in Dravet syndrome patients. The company recently reached an agreement with regulators in the U.S., Europe and Japan on design of its planned Phase 3 study.

By Biogen’s estimates, Dravet syndrome affects up to 38,000 people in the U.S., U.K., Japan and several European countries.

Zorevunersen is a type of genetic medicine known as an antisense oligonucleotide. It’s designed to bind to select sequences of RNA to increase the expression of a sodium channel protein tied to Dravet Syndrome. Sodium channels are embedded in the outer coating of cells throughout the body, including in the brain, and have long been seen as promising targets to treat pain, epilepsies and mood disorders.

Reference:
https://www.genengnews.com/industry-news/as-nih-cuts-loom-research-organizations-need-to-weigh-alternatives/

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