XBiotech’s Bermekimab, a promising experimental drug generating significant interest with Hidradenitis Suppurativa patients in the TrialSite News network, has been sold to Janssen Biotech, Inc., a Janssen Pharmaceutical Company of Johnson & Johnson. Bermekimab is a novel antibody that neutralizes interleukin-1 alpha (IL-1⍺). As it turns out, IL-1⍺ promotes disease-causing inflammation in a wide range of medical conditions. XBiotech has presented on TrialSite News Podcast series.
Currently, Bermekimab is in two ongoing Phase II clinical studies evaluating the experimental dug in HS and Atopic Dermatitis. Once the agreement is executed, XBiotech will contract with Janssen to offer clinical trial services to complete these two trials as well as a contract to utilize its proprietary manufacturing technology to produce clinical supplies of bermekimab for Janssen under a supply agreement.
XBiotech will be free to use its True Human Antibody discovery program to develop new antibody therapeutics that target IL-1⍺ to treat non-dermatological diseases. Including the services committed to Janssen (manufacturing and supporting the clinical trials for HS and AD) upon closing, Janssen will make a cash payment of $750 million to XBiotech. Additionally, XBiotech may receive up to $600 million in potential milestone payments (e.g. success with Bermekimab for HS and AD) not to mention additional revenue prospects from the manufacturing agreement and clinical services agreement with Janssen.
XBiotech will use the proceeds to A) fund discovery and development of its True Human anti IL-1⍺ antibody program; B) commit funds to advance other antibody therapeutics in its pipeline; and C) execute a capital transaction, such as a stock repurchase upon board review and approval.
XBiotech has had a volatile existence—much like many small emerging biotech—and this deal, overall, is a very good thing for them. Presently with no revenue, losses around $24 million, and $40 million in the bank, the promise of their platform is now infused with considerably more capital, which can help the company regroup, reposition and expand R&D based on their strengths and market opportunity. There is considerable potential with Bermekimab with conditions, such as HS and AD, and Janssen is positioned in the market to commercialize and take on giants, such as Humira (AbbVie).
Validation of Science
This acquisition represents a validation of the foundational science behind targeting IL-1a as a means to block disease-causing inflammation. To date, preclinical and early stage clinical trials reveal that the blocking of 1L-1a may be used to treat a number of chronic and acute inflammatory conditions—ranging from skin disease, heart disease, heart attack, stroke rheumatological disease, gastrointestinal disease and cancer. In a press release, CEO John Simard recognized that with a global operation, such as Janssen, the “recognition” and “increased awareness” (e.g. market brand and commercial distribution reach) can potentially now achieve its full potential. Moreover, the transaction brands XBiotech in new powerful ways—their True Human antibody discovery platform was the asset behind a potential $1.35 billion deal. Assuming this deal closes (it is subject to standard legal, compliance and administrative conditions), XBiotech can focus on building a more potent market presence using the True Human platform.
Implication for Patients
The TrialSite News network includes a great number of patients struggling with Hidradenitis Suppurativa. TrialSite News is committed to working with patient networks to support, educate, and inform our audience of different options for this very challenging and what can be, in reality, a horrific disease that has not received the medical attention nor the research dollars that these patients deserve.
From having physicians come on the podcast to discuss HS options to connections of HS to cancer, TrialSite News doesn’t rest on these topics nor does it hold back on controversial points. This hard-hitting, factual, and non-biased perspective continues with this prospective transaction.
The potential for HS patients has improved as Janssen’s financial wherewithal, global reach, and position within the Johnson & Johnson family of companies affords exponentially more commercialization know-how, capability, and channels than would have been the case under XBiotech alone. Assuming the deal closes, TrialSite News will monitor this very carefully and report to the audience.
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