Alexion Pharmaceuticals, Inc. (ALXN - Free Report) announced a collaboration agreement with Stealth BioTherapeutics Corp (MITO - Free Report) for a late-stage therapy for mitochondrial diseases.
Both companies announced an agreement to co-develop and commercialize elamipretide, a novel, potential first-in-class therapy that targets mitochondrial dysfunction.
The candidate is currently being evaluated in a phase III study in patients with primary mitochondrial myopathy (PMM).
Per the agreement, Alexion will receive an exclusive option to partner with Stealth in the development of subcutaneous elamipretide based on the final results from the ongoing phase III study. If the company decides to exercise this option, both companies will co-develop subcutaneous elamipretide in the United States for PMM and other indications like Barth syndrome and Leber’s hereditary optic neuropathy (LHON, currently in early-stage clinical development). Per the agreement, the companies will co-promote the candidate in the United States. Besides, Alexion would receive exclusive rights to develop and commercialize subcutaneous elamipretide outside the United States.
There are currently no therapies approved to treat PMM, which is marked by debilitating skeletal muscle weakness, chronic fatigue and exercise intolerance.
Alexion will make initial payments of $30 million to Stealth, including an option fee, an equity investment and development funding. The agreement includes additional payments if the option is exercised. These payments include an option exercise fee, an additional equity investment, development funding and potential milestone payments. However, Stealth’s other pipeline assets, including SBT-272, are not included in the option.
We note that Alexion primarily focuses on developing and commercializing drugs for the treatment of patients with ultra-rare disorders. The market potential of these drugs is significant, with less competitive pressure. Alexion is looking to diversify its portfolio and reduce dependence on its blockbuster drug, Soliris. In line with this, the company acquired a clinical-stage biotechnology company, Syntimmune, in the fourth quarter of 2018. In January 2019, Alexion entered a collaboration agreement with Caelum Biosciences to develop CAEL-101 for AL amyloidosis. Also, the company recently announced a license agreement with BridgeBio Pharma, Inc.’s subsidiary, Eidos Therapeutics, Inc. (EIDX - Free Report) .
Shares of this biotech bigwig have inched up 1% in the year so far against the industry’s decline of 8.9%.
Meanwhile, Alexion’s strong rare disease portfolio has made it a hot target for a takeover. Notably, the company was recently in news on the speculations of a potential buyout by biotech bigwig Amgen (AMGN - Free Report) . However, Amgen recently announced an agreement to purchase Celgene Corporation’s plaque psoriasis and psoriatic arthritis drug Otezla, thereby quashing the rumors of acquiring Alexion.
Alexion currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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