Roivant Licenses Diabetes Drug From Ligand Pharma

Ligand Pharmaceuticals Inc. is licensing LGD-6972, a glucagon receptor antagonist (GRA), to Roivant Sciences GmbH for $20 million upfront. The drug will be developed by Roivant’s recently founded Metavant Sciences, now dubbed RVT-1502, as well as imeglimin (RVT-1501).

Ligand Pharmaceuticals acquired LGD-6972 when it bought Metabasis Therapeutics, Inc. in 2010. The drug has been evaluated in preclinical and Phase I and II clinical trials in patients with type 2 diabetes. The trials have shown the drug to be a potent, selective inhibitor of glucagon-induced hyperglycemia in rats and monkeys. It also was shown to lower blood sugar levels in a mouse model of type 2 diabetes. It also lowered fasting and non-fasting glucose levels in a mouse model of type 1 diabetes and reduced HbA1c, ketone bodies and free fatty acids.

Both Roivant and Metavant are Vivek Ramaswamy companies. On February 12, Roivant inked a strategic development and license agreement with Lyon, France’s Poxel SA to develop imeglimin for type 2 diabetes. Under that deal, Poxel received $35 million upfront and Roivant agreed to invest $15 million in the company by buying 1,431,399 newly-issued ordinary shares. Poxel is eligible to receive various development and regulatory milestone payments and sales-based payments of up to $600 million. Poxel will also receive double-digit royalties on net sales. Roivant will be responsible for development and commercialization costs. Poxel will toss in $25 million to the development program.

Imeglimin as well as LGD-6972 will be developed by Metavant. In total, Roivant has paid $55 million upfront and a $15 million investment in Poxel so that Metavant has two clinical-stage diabetes drugs.

"This global license with Roivant for our diabetes program is another important deal in a long history of success converting our inventions, data and intellectual property into licenses to advance promising medicines and deliver value to our shareholders," said John Higgins, Ligand’s chief executive officer, in a statement. "Roivant is well capitalized and they are assembling an experienced team at Metavant to efficiently drive the program forward. This is a major partnership that has the potential to generate substantial medical value for both type 1 and type 2 diabetes patients. If LGD-6972 is successfully developed, this license with Roivant has the potential to be Ligand’s largest financial asset with the possibility of annual royalties into the late 2030s given current and pending IP."

Ramaswamy’s companies are generally well capitalized. Overall, his strategy is to license or outright acquire mid- to late-stage compounds to develop, sometimes compounds that failed in previous studies. This business model failed spectacularly in September 2017 for Axovant Sciences Ltd.. The company had acquired intepirdine for $5 million from GlaxoSmithKline for Alzheimer’s disease. In a Phase IIb clinical trial the drug showed a favorable safety and tolerability profile, as well as immediate and sustained efficacy over placebo. But it had failed in four of GSK’s later-stage clinical trials. Ramaswamy felt he could revitalize the drug in a narrow patient population, and convinced investors of the viability of that approach.

Axovant evaluated the drug in 1,315 patients on a stable background therapy of donepezil (Aricept) who received either a placebo or intepirdine. Unfortunately, the drug failed to show any change in baseline in activities of daily living.

Hopefully Ramaswamy and Metavant will have more success in the diabetes and cardiometabolic field. One concern is that late-stage diabetes trials are notoriously expensive, and Roivant and Metavant have already agreed to pay out $1.114 billion in potential milestone payments to Poxel and Ligand to develop the two diabetes drugs.

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