Abogen and Novartis sign $7.2bn RNA therapeutics deal

Abogen Biosciences has entered into a licensing and option agreement with Novartis covering its lead RNA therapeutic programme ABO2203 and additional potential medicines developed using its proprietary RNA platform.

Under the proposed agreement, Abogen will receive an upfront payment of $575 million. The biotechnology company could receive up to approximately $7.2 billion in additional milestone payments if Novartis exercises all available options and agreed development, regulatory and commercial milestones are achieved.

The deal also includes potential royalties on future product sales.

The transaction remains subject to customary closing conditions, including required regulatory clearances.

Novartis licenses Abogen’s ABO2203 programme

The agreement gives Novartis an exclusive worldwide licence to ABO2203, Abogen’s lead clinical-stage programme.

ABO2203 is an mRNA-encoded CD19xCD3 T-cell engager being developed for autoimmune diseases. The programme is designed to use mRNA to direct the body’s own cells to produce T-cell engagers in vivo.

Abogen is developing the approach as a potential method of depleting B cells, which play an important role in a range of B-cell-mediated autoimmune disorders.

The company says the mechanism could provide a differentiated approach compared with traditional recombinant T-cell engagers because the therapeutic molecules are produced inside the body rather than administered as recombinant proteins.

Abogen’s RNA platform expands beyond vaccines

The agreement also gives Novartis exclusive options to license additional therapeutic assets developed using Abogen’s proprietary RNA platform.

For Abogen, the transaction represents an expansion of its RNA technology into therapeutic applications beyond prophylactic vaccines.

The company said ABO2203 is the first mRNA-encoded T-cell engager to enter clinical evaluation for autoimmune diseases.

The platform could therefore provide Novartis with access not only to the lead programme but also to additional potential therapies developed through the same technology.

Deal includes up to $7.2bn in potential milestones

The financial structure combines an upfront payment with milestone-based consideration.

Abogen is set to receive $575 million upfront, while approximately $7.2 billion is potentially available through development, regulatory and commercial milestones if all options covering the programmes are exercised and the specified conditions are achieved.

The milestone figure is therefore not an immediate payment or guaranteed transaction value.

Abogen may also receive royalties on future product sales under the agreement.

The transaction remains subject to customary closing conditions and regulatory clearances.

ABO2203 targets B-cell-mediated autoimmune diseases

ABO2203 is designed around the use of an mRNA-encoded CD19xCD3 T-cell engager.

CD19 is a protein associated with B cells, while CD3 is found on T cells. The programme is intended to bring these two cell types together to enable T-cell-mediated depletion of B cells.

Abogen’s approach uses mRNA to enable endogenous production of the T-cell engager in vivo.

The company believes this could provide a differentiated way of achieving B-cell depletion and potentially support treatment development across autoimmune diseases in which B cells play a central role.

Novartis said effective and durable immune reset remains an important objective across several autoimmune diseases and described mRNA-encoded T-cell engagers as an approach that could complement existing treatment modalities.

What the Abogen-Novartis deal means for RNA therapeutics

The agreement provides a commercial example of RNA technology being applied to therapeutic areas beyond vaccines.

For Abogen, the upfront funding and potential milestone payments provide financial support for development of ABO2203 and other programmes while bringing Novartis into the development of its RNA platform.

For Novartis, the agreement provides access to a clinical-stage mRNA-encoded T-cell engager as well as options covering additional programmes.

The potential value of the agreement also reflects the importance pharmaceutical companies are placing on platform technologies that can generate multiple therapeutic programmes rather than a single drug candidate.

What to watch next

The key milestones will be completion of the transaction’s regulatory and other closing conditions, further development of ABO2203, and Novartis’ decisions on whether to exercise options covering additional Abogen RNA programmes.

Progress through clinical development and subsequent regulatory milestones will determine whether the potential milestone payments become payable.

Market Signal: The Abogen-Novartis agreement provides another example of RNA technology moving into therapeutic applications beyond vaccines, with major pharmaceutical companies using licensing arrangements to gain access to emerging platform technologies and clinical-stage programmes.

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