By Bhanvi Satija
Oct 2 (Reuters) - Chinese biotech company Abogen said on Friday it has signed a licensing deal worth up to $7.8 billion with Novartis to develop messenger RNA-based therapy, underscoring the Swiss drugmaker's growing focus on an emerging class of treatments.
Novartis has come under investor scrutiny over its dealmaking strategy after setbacks with drugs acquired through previous purchases.
In September, it disclosed two late-stage trial failures that wiped nearly $30 billion from its
market value and sparked calls from a major shareholder for tighter board oversight of future acquisitions.
Novatis said its approach to business development has remained consistent over time and that Abogen's ribonucleic acid technology complements its existing approach to autoimmune disease.
Under the deal, Novartis will gain exclusive rights to Abogen's experimental drug, ABO2203, and options to license other therapies based on Abogen's RNA technology. Abogen will receive $575 million upfront with the potential to earn an additional $7.2 billion if the drug advances through development and wins regulatory approval.
Novartis shares have recovered some losses and were trading marginally up on Friday.
In August, US drugmakers Moderna and Merck said that their personalized mRNA cancer vaccine reduced the risk of recurrence and spread of melanoma in a late-stage trial, validating the broader promise of the technology beyond infectious disease shots.
Abogen's approach uses similar mRNA technology and the deal could help the Chinese biotech company compete globally in developing treatments for hard-to-treat autoimmune diseases.
The partnership is also in line with a broader rush by rivals such as AstraZeneca and Novo Nordisk that have licensed obesity and other treatments from companies in China.
ABO2203 is designed to treat autoimmune diseases by targeting B cells, a type of immune cell that causes disease in conditions like lupus and rheumatoid arthritis.
It works by using mRNA — which is naturally present in every cell in the body — to instruct patients' own cells to produce a treatment that destroys disease-causing B cells.
Novartis is also advancing remibrutinib, an oral drug that recently succeeded in a late-stage multiple sclerosis study.
(Reporting by Ruchika Khanna in Bengaluru and Bhanvi Satija in London; Editing by Subhranshu Sahu, Janane Venkatraman and Emelia Sithole-Matarise)
