Amgen, one of the world’s leading biotechnology companies, is teaming with Arrowhead Pharmaceuticals to bring two drugs to market to treat cardiovascular disease in a deal worth more than $50 million to start, with the potential for an additional $600 million or more in the future.
Arrowhead is based in Pasadena, California but most of its research — including work on these two drugs — is conducted in Madison, at 465 Science Drive, where the company has about 100 employees.
“This is a very important partnership for us,” said Arrowhead president and CEO Christopher Anzalone, in a conference call with analysts. “We are thrilled to be working with Amgen.”
Arrowhead is working on a variety of drugs based on RNA interference (RNAi), in which molecules can silence targeted genes associated with certain diseases.
Under the agreements announced Thursday, Amgen will get a worldwide, exclusive license to Arrowhead’s ARC-LPA program, designed to reduce levels of lipoprotein(a), a type of cholesterol that’s often hereditary and can lead to a higher risk of heart attack or stroke. Amgen will also get an option to a worldwide, exclusive license for an RNAi therapy for another cardiovascular target that is not being disclosed yet.
Arrowhead will get $35 million from Amgen off the bat and Amgen will invest $21.5 million in Arrowhead stock — about 3 million shares at $7.16 per share — for a total of $56.5 million.
In addition, Arrowhead could get up to $617 million in potential milestone payments, plus royalties for the sales of eventual drugs that go on the market from the deal.
Amgen will cover the costs of clinical development and commercialization of the drugs.
“Arrowhead’s expertise in RNAi makes them a valuable partner as we translate genetic discoveries into potential therapies that can improve health outcomes for patients,” said Sean Harper, executive vice president of research and development at Amgen, in a news release.
The deal “provides validation” for Arrowhead’s research and its delivery platform, Anzalone told analysts. “It is a strong vote of confidence that we have arrived as a true platform company.”
Anzalone credited Arrowhead’s acquisition of Roche Madison in 2011 as one of the major factors in advancing the RNAi technology. Roche Madison had been part of Mirus Bio Corp., founded in 1995 based on UW-Madison research, and sold to Roche in 2008 for $125 million.
David Lewis, Arrowhead’s chief scientific officer and head of its Madison operations, said the ARC-LPA research was done in Madison as will be the work on the second cardio drug.
“It’s really a great day,” Lewis said in a phone interview. “Our first major partnership and with a really world-class biopharma company in Amgen.”
Lewis said talks with Amgen had gone on for “several quarters,” and Amgen officials came to Madison to meet with scientists and see the company’s facilities, both current and future, in University Research Park. Arrowhead plans to move to 502 S. Rosa Road in early October after remodeling space once used by Third Wave Technologies, a diagnostics company acquired by Hologics, of Massachusetts, and later closed.
The new quarters will double Arrowhead’s current Madison labs and offices, Lewis said. He said the Amgen deal will not require adding staff here, but hiring will continue as the company’s pipeline grows.
“It’s great to see a leading Research Park tenant advancing science and bringing investment to Wisconsin,” University Research Park director Aaron Olver said.
Arrowhead also is working on drugs to fight cancer and chronic hepatitis B, and to prevent blood clots, he said.
Animal studies on ARC-LPA were promising, Lewis said, and showed a single dose of the drug cut the level of lipoprotein(a) up to 98 percent in mice.
The way the drug is given is also new for Arrowhead, Lewis said. It is injected under the skin, instead of into a vein or by pill. That makes it more convenient for patients who may have to inject themselves for the rest of their lives, he said.
Arrowhead has annual revenue of $382,000 and just over 100 employees, according to BigCharts.com, while Amgen, of Thousand Oaks, Calif., has annual revenue of $21.3 billion and 17,900 employees.
Both companies are publicly traded on the Nasdaq market. Arrowhead shares closed Thursday at $7.30, up 26 cents, or 3.7 percent. Amgen stock closed at $165.45, down $4.26 a share, or 2.5 percent.
The business news you need
With a weekly newsletter looking back at local history.