Arcturus Therapeutics Stands to Collect Up to $1.66 Billion from Rare Disease Pact with Ultragenyx

Arcturus Therapeutics Stands to Collect Up to $1.66 Billion from Rare Disease Pact with Ultragenyx
October 29, 2015
By Mark Terry, Breaking News Staff

Novato, Calif.-based Ultragenyx Pharmaceutical Inc. , announced today that it has inked a research and collaboration deal with San Diego-based Arcturus Therapeutics, Inc.

The two companies will work to identify and develop messenger RNA (mRNA) therapeutics for rare disease targets utilizing Arcturus’ UNA Oligomer chemistry and LUNAR nanoparticle delivery program. Ultragenyx will pay Arcturus an upfront payment of $10 million. Arcturus will be eligible for various milestone payments up to $156 million for each target, as well as mid-single to low double-digit royalties on any commercial sales, and research reimbursement.

“This collaboration with Arcturus will help us address a wider range of rare diseases than is possible with currently available approaches,” said Emil Kakkis, chief executive officer of Ultragenyx, in a statement. “The joint program combines Arcturus’ technology platform, which we believe solves some of the key issues associated with mRNA therapeutics, with Ultragenyx’s expertise in rare disease drug development.”

Ultragenyx focuses on clinical-stage treatments for rare and ultra-rare diseases. It has numerous compounds in its pipeline, including KRN23, for treatment of X-Linked Hypophosphatemia (XLH) and tumor-induced osteomalacia (TIO), recombinant human beta-glucuronidase (rhGUS) for Sly Syndrome, also known as mucopolysaccharidosis 7 (MPS 7), and UX007 (triheptanoin) for long-chain fatty acid oxidation disorders (LC-FAOD), which are linked to several serious liver, muscle and heart diseases. The company has several ongoing programs as well.

Arcturus, founded in 2013, focuses on RNA technologies. It has several RNAi and mRNA programs, such as LUNAR-101 for cardiomyopathy and LUNAR-TPO for Thrombopoietin, and LUNAR-CF for cystic fibrosis. The company has three major platforms, LUNAR, which stands for Lipid-enabled and Unlocked Nucleic Acid modified RNA delivery, UNA, or unlocked nucleomonomer agent (UNA) oligomer, and RNAi.

On Jan. 9, 2015, Arcturus announced a partnership with Vancouver, Canada-based Precision NanoSystems to research and develop RNA medicines. Precision’s NanoAssemblr platform will be used to manufacture GMP batches to support clinical studies and commercial development using the LUNAR RNA Therapeutics platform. In June, it signed a research collaboration deal with Johnson & Johnson .

Ultragenyx went public in July, closing on its public offering of 2,530,000 shares of common stock priced to the public at $120 per share. Ultragenyx traded for $134.09 on July 20, dropped to $93.51 on Aug. 24, went back up to $131.47 on Sept. 17, then dropped to $81.13 on Oct. 14. It is currently trading up at $106.20.

On Oct. 23, an analyst with Jefferies and Co. rated Ultragenyx a “buy” with a price target of $108. Price targets among eight analysts ranged from $79 to $125, according to Thomson/First Call.

JP Morgan Chase & Co. gave the company an “overweight” rating and set a price target of $119 on Aug. 14. Morgan Stanley gave it an “equal weight” rating and set a price target of $126 on July 27. Zacks gave a “sell” rating on July 14, and on July 9, JMP Securities set an “outperform” rating with a $119 price target.

Ultragenyx has raised $700 million in the last two years. The deal with Arcturus has the potential to raise $1.5 billion in milestone payments.

Also working in the same area of mRNA development is Cambridge, Mass.-based Moderna Therapeutics. Moderna has an interesting business model, essentially spinning out companies using their technology to focus on specific disease states. To date, Moderna launched Onkaido, focused on oncology, Valera, focused on vaccines and antivirals and anti-bacterial agents, and Elpidera, for rare diseases. In October, Moderna launched Caperna, which will focus on cancer vaccines.

In particular, Elpidera is competing in the same space as Ultragenyx and Arcturus. In January 2014, Moderna inked a strategic agreement with Alexion Pharmaceuticals Inc. that gives Alexion 10 product options in rare diseases. Elpidera will push forward programs independent of the Alexion programs, while also supporting Alexion.

Of today’s agreement, Joseph Payne, president and chief executive officer of Arcturus, said in a statement, “The Ultragenyx-Arcturus partnership is an ideal combination to leverage the potential of mRNA therapeutics to provide important new treats for rare disease patients. Arcturus is thrilled to work with Ultragenyx, one of the premier rare disease companies, to identify treatments for challenging rare disease targets using our messenger RNA therapeutics platform.”

Back to news