Novartis takes the helicopter view on Chinook

After Calliditas and Travere secure US approvals Novartis doubles down on a rare kidney disease, but what will the FTC say?

In buying Chinook Therapeutics for $3.2bn today Novartis is making a big bet that IgA nephropathy represents a sizeable market. Chinook’s lead asset, atrasentan, will represent the Swiss group’s second shot at this rare kidney disease, after its in-house project iptacopan.

One big question will therefore concern the view of the US FTC, especially since the antitrust regulator has been broadening its oversight to include early-stage assets, a stance that seems unlikely to change. An obvious follow-on is whether the takeover means that Novartis is giving up on iptacopan in kidney disease, a move that might make sense given the relatively disappointing data revealed so far.

Novartis has as yet made no statements either about iptacopan specifically, or about what it might have to divest to get antitrust clearance. Moreover, outside kidney disease iptacopan is one of the group’s most important projects, with analysts forecasting blockbuster sales in its lead indication of paroxysmal nocturnal haemoglobinuria.

But it cannot be denied that in IgAN iptacopan has disappointed. 23% placebo-adjusted proteinuria reduction in phase 2 looks uncompetitive, though a later analysis using pooled data has arguably yielded better numbers.

Pre-catalyst strike

It is notable that Novartis is placing its bet ahead of Chinook’s big phase 3 readout, namely the results of atrasentan’s Align study, which is expected to generate topline data on proteinuria by the end of this year. Chinook investors stand to get an additional $300m CVR if atrasentan is approved.

It can only be guessed how much anecdotal data from this study Novartis might have seen before pulling the trigger, or indeed whether it has seen any particularly negative signals emerge from Applause-IgAN, its own phase 3 trial of iptacopan. That study is also due to yield proteinuria data in the second half.

Speaking to Evaluate Vantage in April, Chinook’s chief executive, Eric Dobmeier, said the bar for atrasentan in Align was around a 30% placebo-adjusted reduction in proteinuria at six months, the primary endpoint. This is around the level hit by the two recently approved IgAN drugs, Calliditas’s Tarpeyo and Travere’s Filspari.

Filspari carries a boxed warning about liver toxicity; its active ingredient is sparsentan, which like atrasentan is an endothelin type A antagonist, but also hits angiotensin II subtype 1 receptors. Tarpeyo, meanwhile, is a repurposed steroid, an approach Dobmeier said was likely to become “salvage therapy once there are other non-immunosuppressive regimens that you can use in these patients”.

This goes to the heart of how big a market IgAN could become. Dobmeier said there were 150,000 patients in the US, 200,000 in Europe and several million in Asia. While this might be a rare disease, therefore, Novartis is betting that it can support several competing players. And focal segmental glomerulosclerosis represents another possible atrasentan use.

Among other IgAN catalysts, Omeros’s Artemis-IgAN trial of narsoplimab could yield nine-month proteinuria data in the third quarter; the project was separately knocked back in haematopoietic stem cell transplant-associated thrombotic microangiopathy.

It is remarkable what Chinook achieved in just three years. In 2020 the group bought atrasentan from its originator, Abbvie, for an undisclosed up-front amount, $135m of future milestones and a $6.7m equity position. Ironically, Abbvie had discontinued the project before its phase 3 Sonar study read out positively, according to a Lancet paper.

One result of its convoluted development history is that atrasentan’s composition of matter patent expired eight years ago. But Chinook played up additional layers of exclusivity, including orphan status and formulation patents, and Novartis has bought into this.

Another irony is that the takeover represents the second transaction Novartis has done with the Chinook entity. Chinook gained its Nasdaq listing by reversing into Aduro, a business that had focused on the Sting pathway, but which scrapped this work in 2020 after it disappointed clinically.

Just before floating in 2015 Aduro had struck a momentous deal, worth $225m in up-front cash and equity, with none other than Novartis. Remarkably, Aduro had been working on anti-April MAbs, and the leading one, BION-1301/zigakibart, is now Chinook’s second pipeline asset, in a phase 1/2 study in IgAN.

Novartis did not have rights to this work under its 2015 deal with Aduro, but it will now. Things appear to have come full circle.

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