Novartis AG Partners With Bay Area's Rani Therapeutics on Revolutionary Robotic Pill

Advisory Firms Urge Vertex Shareholders to Reject Executive Compensation Package at June 4 Meeting
May 27, 2015
By Alex Keown, Breaking News Staff

SAN JOSE, Calif. – Swiss pharmaceutical giant Novartis AG is stepping into new territory, partnering with Rani Therapeutics on a method to deliver large molecule drugs, which are typically administered as an injectable, in a pill form through the use of smart technology.

The two companies announced today they were entering into a partnership to develop Rani’s oral bio-therapeutics drug delivery platform. Rani’s pill design contains tiny needles made from sugar that, after being ingested, pierce the walls of the intestine to deliver the drug. Founded in 2012 and spun out of InCube Labs, Rani has developed a technology platform to convert injectable drugs such as TNF-alpha Inhibitors, interleukin antibodies, and basal insulin among others into pills.

"The delivery of large molecules orally is considered the holy grail of drug delivery, and there have been many failed attempts before us. We understand the magnitude of the problem we are pursuing, and we are confident that our approach has the potential to radically change the way biologics are administered to patients," Mir Imran, chairman and chief executive officer of Rani Therapeutics, said in a statement.

Following the announcement of its collaboration with Rani, Novartis’ stock was trading at $103.26, up from its opening price of $102.83.

The companies will begin feasibility studies to evaluate how selected Novartis' proprietary biologics can be delivered into the bloodstream using Rani's unique route of administration, Rani announced this morning. The studies are expected to be conducted over the next 18 to 24 months. Once the feasibility studies have been completed, Novartis will have the right to enter into a more extensive collaboration with Rani and license the technology for specific fields of use.

Rani’s platform could allow the injectable drugs Novartis is known for to enter into patients without the use of needles.

The platform could allow insulin and other traditionally injectable drugs to be taken orally, analysts have noted. It the two companies are successful, it would mark the first time large molecule drugs could be administered orally.

This is not the first time Novartis and Rani have teamed up. Novartis, along with Google Inc. and Venture Health, were part of Rani’s Series C financing announced this week.

“We are committed to delivering on our promise to radically transform how biologic drugs are delivered to millions of patients, and this financing is an important step forward,” Imran said in a statement.

While new territory, robotic pills have been used before. Earlier this year the U.S. Food and Drug Administration (FDA) approved the PillCam, a pill-sized camera developed by Given Imaging Ltd. that photographs the digestive track from the inside in a hunt for colon polyps, the Wall Street Journal reported. Last year Proteus Digital Health Inc. received approval to put ingestible sensors inside pills to help patients and doctors determine how many they have taken.

Technology continues to be blended into healthcare, as companies such as Apple and Google are using their wearable product and applications to collect data to drive analytics. Business-giant IBMt, in collaboration with Apple, Medtronic, Inc. and Johnson & Johnson , is using its artificial intelligence unit provide potential life-saving data analytics generated from personal devices to the healthcare providers. With the increasing prevalence of personal fitness trackers, connected medical devices, implantables and other sensors that collect real-time information, the average person is likely to generate more than one million gigabytes of health-related data in their lifetime.

It’s also not the first time Novartis has ventured into the realm of science fiction. In January, the Swiss firm said it would partner with Google on a possible “smart” contact lens to be available in a few years.

Novartis made the announcement at the J.P. Morgan Healthcare Conference in San Francisco. It included 300 of the largest biotech, healthcare and biopharma companies presenting their top-line data and estimates to a sea of eager bankers, analysts, institutional investors, hedge funds and journalists.

Chief Executive Officer Joseph Jimenez said the new lens would work in tandem with a diabetic’s tear duct fluid to monitor blood glucose levels, then send that data wirelessly to a mobile device that would alert users if they were getting too close to dangerous levels.

Working with Google has been enjoyable so far, because the companies both bring unique skill sets to the table, said Jimenez. The new lens would be rolled out under Novartis's Alcon eye care unit as part of its collaboration with Google.

“We don’t know much about programming and the design, but we do know about making devices that work for consumers,” said Jimenez. "This is a real opportunity for a game-changing product."

Novartis makes pharmaceuticals for cardiovascular, respiratory and infectious diseases, oncology, neuroscience, transplantation, dermatology, gastrointestinal and urinary conditions, arthritis, vaccines and diagnostics, vision, and animal health products.

"This really brings high-technology and combines it with biology--and that's a very exciting combination for us," said Jimenez after the session. "I think you're going to see more and more areas of unmet medical need where companies like Novartis are going to take a non-traditional approach to addressing those needs."

The lens will also help elderly users focus on objects they may not otherwise be able to see, with their lens technology working “like the autofocus on a camera,” said Jimenez.

Will PfizerKline Become the Next Pharma Player?
The speculation surrounding a possible bid from Pfizer Inc. for struggling GlaxoSmithKline is heating up, after one closely-watched biotech analyst said in a note last week that Pfizer buying the company would “unlock access to its balance sheet and improve its tax situation.”

Gregg Gilbert, a biotech analyst at Deutsche Bank, wrote in a note to investors “Introducing PfizerKline” that he thinks a deal would be “materially accretive” for both companies. Gilbert estimated that a bid priced at $29.86 a share, via half stock and half cash, which would push up Pfizer’s earnings per share by 10 percent to 16 percent beginning in 2016.

“We believe that the company has a sense of urgency to create value by leveraging the power of its balance sheet to do needle-moving deals,” Gilbert wrote. “Since media reports in the past have pointed to the potential for a Pfizer/GSK combination, we are revisiting that theme.”

We want to know, dear readers, if you agree? Should Glaxo continue going it alone, or might Pfizer buy it and create one of the world’s largest pharma players in history?

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