UCB expands myasthenia gravis pipeline via $2.5-billion deal to buy Ra Pharma

UCB announced Thursday an agreement to acquire Ra Pharmaceuticals for $48 per share in cash, or approximately $2.5 billion, boosting myasthenia gravis pipeline with the addition of the experimental drug zilucoplan. The deal, which has been unanimously approved by the boards of both companies, represents a premium of more than double Ra Pharma's closing stock price on October 9 and is expected close by the end of the first quarter next year.

Zilucoplan, a once-daily self-administered, subcutaneous peptide inhibitor of complement component 5 (C5), is currently being investigated in the late-stage RAISE study for generalised myasthenia gravis. The first patient was dosed in the trial earlier this month, with top-line results expected in early 2021. Meanwhile, UCB's FcRn targeting antibody rozanolixizumab is also in Phase III development for myasthenia gravis.

Commenting on the purchase, UCB chief executive Jean-Christophe Tellier said "Ra Pharma is an excellent strategic fit… [and] will provide us with the opportunity to become a leader in treating people living with myasthenia gravis." UCB noted that zilucoplan has the potential to be a 'pipeline in a product,' with other possible indications including immune-mediated necrotising myopathy, amyotrophic lateral sclerosis and other tissue-based complement-mediated disorders.

UCB indicated that Ra Pharma is also developing an extended-release formulation of zilucoplan, as well as an oral small-molecule C5 inhibitor. In addition, the deal will give UCB access to Ra Pharma's ExtremeDiversity technology platform to produce synthetic macrocyclic peptides, whilst also strengthening its presence in the US, particular in the Boston, Massachusetts area. The Belgian company noted that it plans to maintain Ra Pharma's unit in Cambridge, Massachusetts, to complement its other research hubs.

According to UCB, the transaction has a total value of approximately $2.1 billion, net of Ra Pharma cash and is forecast to accelerate top and bottom line growth from 2024 onwards. The Belgian drugmaker added that the purchase will not impact its financial guidance for this year, though it will be dilutive to its mid-term earnings level. As a result, UCB is moving its mid-term target of reaching an earnings to revenue ratio of 31% to 2022 from 2021 as previously guided.

Commenting on the deal, Sanford C. Bernstein analyst Wimal Kapadia noted that zilucoplan "fits nicely into the UCB portfolio." Meanwhile, Peter Welford of Jefferies suggested that if approved, the drug could generate sales of more than $1 billion.

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