Akcea Therapeutics is returning to its parent company, Ionis Pharmaceuticals, in a $500 million deal that ends a tumultuous three-year, stand-alone business.
The final agreement announced Monday calling for Carlsbad, CA-based Ionis (NASDAQ: IONS) to pay $18.15 for each Akcea share (NASDAQ: AKCA) that it already does not own.
Akcea develops Rare Disease Medicines. But what once was Akcea 's lead therapeutic candidate was stung by a 2018 FDA rejection, a surprise decision that set the company off on a series of moves and changes in strategy leading up to Monday 's announcement of acquisitions.
Akcea 's shares opened at $18.27 per hour on Monday, an increase of more than 60 per cent from the closing price on Friday.
Initially formed as a subsidiary of Ionis in 2014, Akcea developed drugs using its parent's technology. As the lead drug candidate for Akcea was approaching a regulatory submission in 2017, Ionis announced plans to spin out the subsidiary as a separate, publicly traded firm. The lead drug, volanesorsen (Waylivra), has been developed as a family chylomicronemia syndrome (FCS) treatment, an inherited disorder that hinders the ability of the body to break down fats. Akcea has pulled off an IPO to support volanesorsen development and marketing but only after its target price has been slashed. In the wake of the rejection, Akcea laid off 10 per cent of its employees, mostly workers hired for the anticipated volanesorsen marketing. The Akcea drug has also failed to win the regulatory nod in Canada although it was approved last year by the European Medicines Agency.
In 2018, a second Akcea drug, inotersen (Tegsedi), won US and European approvals as a treatment for peripheral nerve damage caused by hereditary amyloidosis transthyretin. These decisions put the Akcea drug in competition with patisiran (Onpattro), an Alnylam Pharmaceuticals (NASDAQ: ALNY) RNA interference therapy. Tafamidis, a drug developed by Pfizer (NYSE: PFE) in patients with transthyretin amyloidosis is approved in Europe as a treatment for neuropathy. Although the FDA has rejected tafamidis for that indication, the drug was approved last year as a cardiomyopathy treatment that these patients could develop.
Nearly a year ago, Akcea 's rocky transition to a commercial-stage company led to a corporate shake-up in which three top executives left. Weeks later, for $250 million up front, Akcea entered into a deal to outsource a mid-stage drug candidate to Pfizer.
Novartis (NYSE: NVS) has licensed another drug from the Akcea pipeline, AKCEA-APO-(a)-Lrx, which is testing the drug as a treatment for cardiovascular disease in patients with elevated lipoprotein (a). The Akcea board appointed former Ionis chief business officer, Damien McDevitt, to lead the biotech as CEO following last year's management shakeup.
[Paragraph added with comment by the analyst] Akcea and Ionis also split the costs and profits of the approved products and pipeline drugs from the Akcea pipeline equally. By acquiring Akcea, Ionis is earning all the revenue and future royalties from those products, Mani Foroohar, an analyst at SVB Leerink, wrote in a research note on Tuesday. Ionis will also earn the cash of around $390 million on Akcea's balance sheet, offsetting Ionis' capital needs, he added.
Ionis' acquisition of Akcea was approved by both company's boards of directors. The board of Akcea has recommended that shareholders of the firm tender their shares for the deal. Should Akcea receive a better offer, it will be required by the acquisition agreement to pay Ionis a termination fee of $15 million.
This article first appeared on https://xconomy.com