Pharma Focus Asia

Ionis and Akcea Partner to Commercialize Inotersen for hATTR

Friday, March 16, 2018

Ionis Pharmaceuticals and Akcea Therapeutics, Inc., an affiliate of Ionis, today announced an exclusive, worldwide license by Ionis to Akcea for inotersen and AKCEA-TTR-LRx, formerly IONIS-TTR-LRx, in a transaction potentially worth up to approximately $1.7 billion to Ionis plus profit sharing payments.

This transaction strengthens the companies' ability to successfully launch inotersen upon approval by leveraging the commercial preparations carried out by Ionis along with Akcea's commercial infrastructure and capabilities. The newly combined Akcea team is preparing to launch inotersen in the U.S. and EU following planned approvals in mid-2018 to treat people with hereditary transthyretin amyloidosis, or hATTR, a systemic, progressive and fatal disease.

The companies are also developing AKCEA-TTR-LRx for hereditary and wild-type forms of ATTR. AKCEA-TTR-LRx is planned to enter clinical development in 2018.

"This collaboration reflects our ever-increasing confidence in the value of inotersen and exemplifies our strategy to use commercial affiliates to commercialize our drugs, keeping the core of Ionis focused on innovation and our antisense pipeline. This collaboration will allow the combined Ionis-Akcea team to rapidly deliver inotersen to the patients who desperately need this treatment," said Stanley T. Crooke, M.D., Ph.D., chief executive officer and chairman of Ionis. "Our partnering discussions resulted in a number of options and we decided this partnership with Akcea will maximize the commercial value of inotersen and our TTR franchise. The potential to add commercial revenue from both inotersen and volanesorsen to our growing Spinraza® royalties helps us achieve our goal of being a multiproduct, profitable company."

"This collaboration is transformational for Akcea," said Paula Soteropoulos, chief executive officer of Akcea Therapeutics. "Adding two potentially life-changing therapies, inotersen and AKCEA-TTR-LRx, expands our pipeline of drugs to treat people with serious and under-served rare diseases. Inotersen's launch will benefit from Akcea's patient-centric approach and our focus, dedication and expertise. Through our launch preparations for volanesorsen, we have rapidly expanded our capabilities and team to become a unique and leading presence in rare diseases. This commercial build-up, combined with our highly accomplished team, allows us to accelerate readiness for the upcoming inotersen launch. Further, it increases our options to scale our business given the expansion of our call points and sales force as we work with this new physician community."

As part of the collaboration, the inotersen commercial team is joining Akcea, enabling a seamless and rapid transition in the ongoing launch preparations for inotersen. Sarah Boyce, currently Ionis' chief business officer, will join Akcea as president and take a seat on the Akcea board of directors upon closing. Ms. Boyce, who has been leading the inotersen launch, will bring to Akcea extensive, global experience in the life sciences industry where she established organizations from inception and built high performing teams.

"The strength and experience of the joint inotersen and volanesorsen teams, and Akcea's global capabilities, further enhance our potential to maximize inotersen's benefit to people with hATTR," said Ms. Boyce. "We are confident inotersen can provide hope for people with hATTR by giving them greater freedom and control over their disease. In its pivotal study, inotersen treatment provided significant benefit in measures of disease progression and improved quality of life in the majority of people with hATTR, while offering simple and quick administration as a once-weekly subcutaneous injection. We are committed to bringing this important drug to those suffering from this devastating and fatal disease."

Under the agreement, Akcea will pay Ionis an upfront licensing fee of $150 million, payable in shares of common stock priced by reference to a recent trading average. Akcea will have rights to commercialize inotersen and AKCEA-TTR-LRx globally. To support commercialization of inotersen, Ionis will purchase $200 million of Akcea common stock priced by reference to a recent trading average. Upon closing this transaction, Ionis' ownership in Akcea will increase by 7%, from 68% to 75%, totaling 64,114,545 shares. Regulatory approval of inotersen and AKCEA-TTR-LRx in the U.S. and EU will trigger milestone payments to Ionis of $50 million and $40 million, respectively, with additional milestone payments due upon approval of both programs in various other geographies. The license fee and initial milestone payments may be payable in Akcea common stock at fair market value. Commercial profits and losses from inotersen will be split 60% to Ionis and 40% to Akcea until the first commercial sales of AKCEA-TTR-LRx, after which the profits and losses will be shared 50/50. The costs of the development of AKCEA-TTR-LRx and the profits from its commercialization will be shared 50/50. The license for the two drugs also includes various sales milestone payments of up to nearly $1.3 billion. For this transaction, Ionis was advised by Stifel, Nicolaus & Company, Incorporated and Akcea was advised by Cowen and Company, LLC.

The transaction is subject to customary closing conditions and is expected to close in the second quarter of 2018, assuming satisfaction of certain conditions. Closing conditions include a non-waivable condition requiring the approval of the stock purchase agreement, the license agreement and related agreements and the transaction contemplated thereunder by the affirmative vote of holders representing a majority of the issued and outstanding shares of common stock other than Ionis and its affiliates, which will exclude a vote of Akcea's directors and officers. Novartis Pharma AG, one of Akcea's largest shareholders, has agreed to vote in favor of the proposal with its shares of common stock, representing approximately 9.4% of the issued and outstanding shares.

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