Novartis Acquires DTx Pharma in a Deal Potentially Worth $1B

Swiss pharmaceutical firm Novartis said on Monday that it has purchased biotechnology firm DTx Pharma and its inventory of medications for neurological diseases.

According to the terms of the agreement, Novartis will shell out $500 million upfront and may have to pay an additional $500 million if certain objectives are accomplished. Through the acquisition, the pharmaceutical company will have access to three preclinical-stage drugs, notably one for Charcot-Marie-Tooth illness, as well as DTx’s RNA drugmaking technology.

After acquiring Chinook Therapeutics and its novel kidney disease medications in June, the buyout of DTx marks Novartis’ second biotech acquisition in a matter of just two months.

Novartis said that it was interested in DTx for a number of reasons, including the biotech’s potential for treating Charcot-Marie-Tooth disease and its use of a small interfering RNA technology that the pharmaceutical company was already aware of.

Drugs known as small interfering RNA (siRNA) function by interfering with the translation of DNA into proteins. SiRNA drugs can stop or restrict the synthesis of certain proteins involved in illness by obstructing this mechanism.

In the past, Novartis gambled a lot on this strategy, purchasing The Medicines Company for the cholesterol medication Leqvio, which gained the Food and Drug Administration’s green light in 2021. Additionally, it has collaborated twice with Alnylam Pharmaceuticals, notably on a recent study agreement focusing on liver failure.

However, it can be difficult to get these medications to the appropriate parts of the body, especially for conditions that don’t affect the liver. By linking siRNAs to certain kinds of fatty acids, DTx’s technique aims to solve these issues and assist the drug in reaching the proper cells.

Fiona Marshall, the head of Novartis Institutes for BioMedical Research, remarked, “We look forward to continuing the development of DTx’s therapeutic programs and bringing new hope to patients with neuromuscular and other neurological disorders for which there have historically been few treatment options.” She continued by saying that the Novartis team is eager to leverage DTx’s FALCON technology and investigate its potential for delivering drugs to extrahepatic tissues.

Novartis was interested in DTx’s therapy for a prominent kind of Charcot-Marie-Tooth, a hereditary illness that affects the nervous system. There is currently no authorized medication for the treatment of this particular form of the condition, which is brought on by an excessive amount of a protein referred to as PMP22.

Artie Suckow, the CEO of DTx, stated in an email that although his business had been in contact with a number of pharmaceutical companies, the threshold for concluding a deal was fairly high. Suckow was particularly impressed by the fact that Dr. Robert Baloh – NIBR’s worldwide head of neuroscience – showcased a high amount of passion for curing Charcot-Marie-Tooth, as did himself and the rest of the DTx team.

Suckow added that the deal occurred just as DTx was finishing up the term sheets for a Series C fundraising round with private investors. Previously, the firm successfully raised over $110 million in venture capital.

In addition to the treatment for Charcot-Marie-Tooth, Novartis has also received access to two early-stage studies for other neurological conditions.

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