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Biogen Secures $250M from Royalty Pharma to Advance Lupus Antibody into Phase III Trials

• Biogen has entered into a strategic funding agreement with Royalty Pharma, securing $250 million over six quarters to advance litifilimab, a promising lupus treatment, into Phase III development.

• The BDCA2-targeting monoclonal antibody litifilimab showed significant reduction in joint pain for systemic lupus erythematosus patients in Phase II trials, with Phase III data expected between 2026-2027.

• The deal includes milestone payments and mid-single-digit royalties on worldwide sales, coming at a crucial time as Biogen restructures its pipeline and faces various business challenges.

Biogen has secured a significant funding boost for its lupus program, announcing a $250 million agreement with Royalty Pharma to advance its investigational antibody litifilimab into Phase III clinical trials. The funding will be distributed over six quarters, with Royalty Pharma receiving regulatory milestone payments and mid-single-digit royalties on worldwide sales in return.

Strategic Funding Partnership

Pablo Legorreta, CEO of Royalty Pharma, expressed optimism about the collaboration, describing it as a "win-win" arrangement that could benefit patients. "Litifilimab has the potential to significantly improve treatment outcomes for patients living with lupus, and we are excited to support its Phase III development through this funding collaboration," he stated.
Analysts at Truist Securities view the agreement favorably, noting that it provides Biogen with necessary near-term cash to strengthen its pipeline. They also suggested that similar arrangements could be leveraged for Biogen's Alzheimer's disease franchise.

Promising Clinical Development

Litifilimab represents a novel approach to lupus treatment, targeting the BDCA2 protein to disrupt the production of pro-inflammatory interferons implicated in lupus pathology. The drug's potential was demonstrated in Phase II trials, with results published in the New England Journal of Medicine in September 2022, showing significant reduction in joint pain among systemic lupus erythematosus (SLE) patients.
The development program encompasses both SLE and cutaneous lupus erythematosus (CLE), with Phase III data anticipated between 2026 and 2027.

Corporate Restructuring Context

This funding agreement comes during a period of significant corporate restructuring for Biogen. The company recently reported its fourth-quarter results, showing revenue of $2.46 billion, representing a 3% year-on-year growth. However, Biogen faces various challenges, including a projected revenue decline in the mid-single-digit percentage for the coming year.
As part of its strategic realignment, Biogen has initiated workforce reductions and is streamlining its early-stage pipeline. The company has discontinued development programs for several compounds, including BIIB113 for Alzheimer's disease, BIIB094 for Parkinson's disease, BIIB101 for multiple system atrophy, and BIIB143 for diabetic peripheral neuropathic pain.
The company's recent attempt to acquire partner Sage Therapeutics through an unsolicited $469 million takeover offer was rejected, further highlighting the challenges Biogen faces in executing its growth strategy.
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