Wave Life Sciences this morning inked a wide-ranging alliance with Japanese pharma Takeda to develop RNA-based drugs for a variety of neurological diseases.
Wave (NASDAQ: [[ticker:WVE]]), of Cambridge, MA, gets $110 million in up front cash from Takeda. The Japanese giant will also buy $60 million in Wave stock at $54.70 a share and fund at least $60 million of Wave’s research over the next four years. In return, Takeda gets the option to split rights to experimental Wave programs for four brain diseases: Huntington’s, amylotrophic lateral sclerosis, frontotemporal dementia, and spinocerebellar ataxia type 3.
Takeda can opt into these programs once they demonstrate “proof of mechanism” in early testing, Wave said in a statement. But Leerink analyst Paul Matteis wrote in a research note that it isn’t totally clear from the agreement what kind of evidence Takeda would be looking for to see if that milestone was achieved.
Takeda can also license preclinical programs for Alzheimer’s, Parkinson’s, and other neurological disorders in the deal, which could each open up a variety of possible downstream payments for Wave, the companies said in a statement.
Wave’s technology controls the chirality, or chemistry’s version of handedness, of the small RNA molecules, or oligonucleotides, it produces. The hope is that the RNA drugs will last longer in the body, be safer and more potent than similar drugs from other companies. One of its experimental therapies, for instance, is aimed at the same genetic subset of Duchenne muscular dystrophy patients as those targeted by the approved drug from Sarepta Therapeutics (NASDAQ: [[ticker:SRPT]]), eteplirsen (Exondys 51). Wave hasn’t gone as far with human data yet; its most advanced clinical prospects, for Huntington’s and Duchenne, are both in early stage trials. Wave fully owns its Duchenne therapy.
Matteis considered the pact “validating” for Wave’s strategy and noted the company can now invest in a variety of high-risk projects it might not have otherwise. Still, he noted that Wave has now dealt away some of the upside to its most advanced drugs through the alliance. Shares slipped 2.10 percent, to $53.55 apiece, in early trading Tuesday.
