Astra finds no fit for rare diseases in latest big pharma spin-out

Astrazeneca gave birth to the latest big pharma baby today, unveiling a relatively well-stocked biotech focused on inflammation and autoimmune conditions. Called Viela Bio, the new company boasts three clinical-stage assets and is Astra’s third spin-out of the past decade.

For all the talk of wanting to make the most of potentially valuable assets gathering dust on shelves, big pharma is not a hugely prolific out-licensor. Still, setting up new companies around research projects is far from simple, and one that some seem unwilling to attempt. A trawl of EvaluatePharma reveals that European big pharma groups are the most enthusiastic parents, though Pfizer is an exception in the US (see table below).

In fact, with five under its belt, the US pharma giant is almost as prolific as Merck KGaA, although as this analysis shows the German group seems to have cooled to this strategy in recent years. Perhaps lack of notable progress by its progeny was discouraging, though presumably the potential for financial gain is not the only motivation for these huge corporations.

The take-outs of the likes of Movetis, Actimis and Novexel no doubt made some proud parents. But the rates of success, in terms of takeouts or R&D progress, among the offspring below is not so startling. This perhaps is why the likes of Merck & Co and Bristol-Myers Squibb have not been persuaded to jump-start this spin-off activity.

Company formation is certainly not a strategic priority for big pharma, so perhaps it is surprising that so many of these transactions actually get off the ground.

In the first instance, cheerleaders must be found for the assets deemed non-core – both internally and among external investors – a process that must take serious time and resources. Returns on these investments like Movetis, which was bought just four years after spinning out from J&J, are the exception rather than the rule.

Astrazeneca, meanwhile, has made a name for itself with its externalisation strategy, though these company spin-outs must represent the least visible way of monetising its peripheral assets.

Viela is taking six compounds from Astra’s Medimmune unit, and though the company states that inflammation and autoimmunity fall outside its core areas the firm is keeping hold of a lupus asset, anifrolumab.  

The three clinical assets that Viela will push forward are all being studied in rare conditions. And while Astra denies that Viela is a rare disease company per se, it is notable that many big pharma groups seem to be struggling to find a way to make niche projects work within structures that will always operate on a bigger-is-better mentality.

Of course others in the industry have embraced the rare disease revolution much more enthusiastically, and it will be interesting to see how Viela fares independently. Perhaps finding an unmet need for on-the-shelf assets is a more viable way forward for big pharma, at least while investors remain in love with orphans.

To contact the writer of this story email Amy Brown in London at [email protected] or follow @ByAmyBrown on Twitter