Alexion Pharmaceuticals is beefing up its rare disease pipeline with the acquisition of Achillion Pharmaceuticals in a deal valued at $930 million up front.

Achillion develops oral small molecule Factor D inhibitors to treat people with complement alternative pathway-mediated rare diseases, such as paroxysmal nocturnal hemoglobinuria and C3 glomerulopathy (C3G). Achillion has two clinical-stage medicines in development, including danicopan (ACH-4471) in phase 2 and ACH-5228 in phase 1. Factor D is an essential serine protease and critical control point in the alternative pathway of the complement system, a part of the innate immune system.

The deal comes just months after Achillion reported in May that in a small study of patients taking Alexion’s Soliris to treat PNH, danicopan reduced the incidence of anemia and thus the need for blood transfusions. Subsequently, Achillion received Breakthrough Therapy designation for danicopan for treatment in combination with a C5 monoclonal antibody for patients with PNH who are sub-optimal responders to a C5 inhibitor alone.

Paroxysmal nocturnal hemoglobinuria (PNH) is a chronic and progressive disease in which the complement system, part of the immune system, attacks a person’s own red blood cells. PNH can strike men and women of all races, backgrounds and ages without warning, with an average age of onset in the early 30s. Patients with PNH may experience a wide range of signs and symptoms, such as fatigue, difficulty swallowing, shortness of breath, abdominal pain, erectile dysfunction, dark-colored urine, and anemia. The condition can cause the formation of blood clots that can damage organs and cause premature death.

C3 glomerulopathy (C3G) is an ultra-rare kidney disease caused by over-activaton of the complement alternative pathway, which leads to deposits of C3 protein fragments in the filtering units (glomeruli) of the kidney. Over time, it results in permanent kidney damage and kidney failure. Currently there are no approved treatments, and C3G patients are often treated with steroids and broad-acting immunosuppressants to slow the progression of kidney damage. Oral Factor D inhibitors have demonstrated proof-of-mechanism to interrupt the over-activation of the alternative pathway and reduce C3 fragment deposition, providing a potential treatment approach for targeting the underlying cause of C3G.

Under the terms of their agreement, Alexion will pay $6.30 in cash per share of Achillion common stock, about $930 million. As part of the acquisition, Alexion will also be acquiring the cash currently on Achillion’s balance sheet, about $230 million as of September 30. Achillion shareholders are also eligible for up to another $300 million in contingent value rights, comprising $1 per share on U.S. regulatory approval of daicopan and another $1 per share on ACH-5228 reaching phase 3 studies.

“Alexion has demonstrated the transformative impact that inhibiting C5 can have on multiple rare and devastating diseases. However, we believe this is just the beginning of what’s possible with complement inhibition,” said Ludwig Hantson, CEO of Alexion. “Targeting a different part of the complement system – the alternative pathway – by inhibiting Factor D production addresses uncontrolled complement activation further upstream in the complement cascade, and importantly, leaves the rest of the complement system intact, which is critical in maintaining the body’s ability to fight infection. We believe this approach has the opportunity to help patients with diseases not currently addressed through C5 inhibition.”

The transaction is expected to close in the first half of 2020.

Photo: Ludwig Hantson, CEO of Alexion

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