Arrowhead buys Novartis’ RNAi portfolio

By Natalie Grover (Reuters) - Arrowhead Research Corp said it acquired Novartis AG's RNAi assets to fortify its position in the field of gene therapy that aims to wipe out disease-causing proteins. The deal gives Arrowhead the freedom to operate in any target for any indication, strengthening the belief that RNAi therapeutics is a bilateral field - there's Alnylam and there's Arrowhead, Chief Executive Christopher Anzalone told Reuters. Novartis is eligible to receive $25 million in Arrowhead shares within 30 days, which would make it the second-largest shareholder based on Arrowhead's market value on Wednesday. French drugmaker Sanofi SA bought a 12 percent stake in Alnylam Pharmaceuticals Inc for $700 million last year. Ribonucleic acid interference (RNAi) therapy has stirred the interest of drugmakers as it aims to silence certain genes to inhibit the production of disease-causing proteins. Available therapies, including monoclonal antibodies, try to inactivate these proteins by binding to them. The deal announced on Thursday gives Arrowhead access to Novartis' RNAi portfolio and associated assets, including various patents and three drugs in the preclinical stage. It also includes a component that could enhance the efficiency of Arrowhead's RNAi triggers, and provides access to some Alnylam intellectual property on 30 gene-targets hand-picked by Novartis. "It's a complicated and unsettled IP landscape and we have just increased our freedom here," Anzalone said. Alnylam and another major competitor, Isis Pharmaceuticals Inc, extended their partnership earlier this year to cross-license IP on four disease-targets. Thursday's transaction, which also includes a $10 million cash component, is reminiscent of a 2011 deal between Arrowhead and Roche Holding AG, where Roche transferred its RNA assets in exchange for a stake. The Roche deal gave Arrowhead its delivery platform, which is used to shepherd RNAs to their specified target, shielding them from enzymes that tend to destroy them. California-based Arrowhead had a market value of $411.5 million as of Wednesday.