In 2017, GlaxoSmithKline ended its partnership with Ionis Pharmaceuticals, Inc. to develop and market inotersen and a follow-up drug for rare diseases. After reviewing its options, Ionis has signed a worldwide license deal to Akcea Therapeutics for inotersen and AKCEA-TTR-LRx in a deal that could hit $1.7 billion. What makes this deal a bit unusual is that Akcea is a subsidiary of Ionis.

John Carroll, writing for Endpoints News, notes, “Today, Ionis unveiled the winning player at the bargaining table: Akcea, an affiliate of Ionis, which owns a controlling interest in its stock. And Sarah Boyce, the CBO in charge of the talks at Ionis, is now transferring over to become president of Akcea as it preps a likely commercial launch in the U.S. and Europe.”

The companies plan to launch inotersen in the U.S. and Europe after expected approvals in the middle of this year, for hereditary transthyretin amyloidosis (hATTR), a systemic, progressive, fatal disease. It is the result of a genetic mutation that results in misfolded transthyretin (TTR) proteins. This causes the formation of amyloid fibrils that collect in the nerves, heart and gastrointestinal tract. It affects about 50,000 people worldwide.

Akcea-TTR-LRx is also being developed for hereditary and wild-type types of ATTR, and is expected to enter the clinic this year.

Ionis is receiving an upfront payment of $150 million from Akcea, and Ionis is buying $200 million in Akcea stock, which increases its stake from 68 percent to 75 percent. U.S. and EU approvals will trigger milestone payments of $50 million and $40 million to Ionis. Akcea has the option of using stock instead of cash to pay the upfront payment and fees. There is another potential $1.3 billion in milestones in the deal.

“This collaboration reflects our ever-increasing confidence in the value of inotersen and exemplifies our strategy to use commercial affiliates to commercialize our drugs, keeping the core of Ionis focused on innovation and our antisense pipeline,” said Stanley Crooke,Ionis’ chief executive officer and chairman, in a statement. “This collaboration will allow the combined Ionis-Akcea team to rapidly deliver inotersen to the patients who desperately need this treatment. Our partnering discussions resulted in a number of options and we decided this partnership with Akcea will maximize the commercial value of inotersen and our TTR franchise. The potential to add commercial revenue from both inotersen and volanersorsen to our growing Spinraza royalties helps us achieve our goal of being a multiproduct, profitable company.”

Spinraza is marketed for spinal muscular atrophy by Biogen. Biogen licensed global rights to Spinraza from Ionis in August 2016, which was approved by the U.S. Food and Drug Administration (FDA) on December 23, 2016.

Carroll questioned Akcea’s chief executive officer, Paula Soteropoulos, about the close connection between Ionis and Akcea in an interview. She told him that as part of the deal’s due diligence, she decided that inotersen is “a very transformative drug for patients. In the clinical trial, inotersen showed a significant impact in the disease and impact on life.”

A spokesperson followed up with him, noting, “After a thoughtful evaluation of all the possibilities, we arrived at the conclusion that this transaction with Akcea met all three of our key partnering goals: to rapidly deliver inotersen to the patients who desperately need this treatment, to maximize the commercial success of inotersen, and to optimize our commercial participation in our TTR franchise. The transaction has the added benefit of being transformative for Akcea which is now positioned to launch two drugs for significant rare diseases this year, substantially increasing the breadth of Akcea’s operations and capabilities.”