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Novartis, Molecular Partners partner to develop a scalable COVID-19 drug

Novartis has secured an option to license two experimental protein drugs that biotech Molecular Partners is developing to treat or prevent COVID-19.

Novartis will pay roughly $66 million upfront, including a roughly $44 million equity investment, to start the deal, and could add another $165 million if the pharma chooses to license both drugs. Molecular Partners will run a Phase 1 study, expected to begin next month, for the first candidate, after which Novartis will conduct mid- and late-stage tests.

The two treatments represent an alternative approach to the antiviral and synthetic antibody drugs currently being developed for COVID-19. But they’re based on a type of drug technology, known as DARPin, that hasn’t yet led to an approved product, despite extensive testing. The Food and Drug Administration earlier this year rejected what would’ve been the first DARPin drug, abicipar, due to safety concerns.

Novartis hasn’t been at the forefront of coronavirus drug development, taking a back seat to its pharmaceutical peers that pushed quickly into the testing of treatments or vaccines.

The Swiss drugmaker is helping advance an experimental vaccine from Mass. Eye & Ear, but that effort is well behind other programs. And up until now, the company hadn’t joined the race to make antibody drugs or antivirals against the new coronavirus.

Wednesday’s deal, then, marks an expansion of Novartis’ investment in COVID-19 drug development. Novartis will put to the test a long studied, yet unproven technology, betting the platform might produce an easy-to-scale antiviral drug for preventing or treating infections.

The technology, from fellow Switzerland-based drugmaker Molecular Partners, is used to make medicines known a “DARPins” — tiny proteins that can be fused together to create molecules with multiple functions. Molecular Partners has been developing DARPins for years, aiming to prove they can get to places and go after targets that more traditional drugs can’t.

The company has forged alliances with Allergan (now owned by AbbVie) in eye diseases and Amgen in cancer immunotherapy, and has several treatments in human testing.

None of its drugs, however, have been approved. Earlier this year, the FDA declined to approve abicipar for age-related macular degeneration, after the Allergan-partnered drug caused more inner eye inflammation than similar treatments. New owner AbbVie has said it plans to meet with the FDA to discuss next steps, though analysts have speculated that it may discontinue other trials and write off the program.

Molecular Partners’ technology nonetheless attracted the interest of Novartis as a potential platform for a COVID-19 treatment. The smaller company has advanced candidates that can bind to SARS-CoV-2 in three different places at once, stopping the virus from infecting cells and replicating. This is a similar strategy to the antibody “cocktail” regimens from Regeneron, Eli Lilly and others that are meant to prevent the virus from escaping their grip.

But those drugs are currently short in supply, complex to manufacture and must be infused, all of which could limit their use.

Novartis noted DARPins should be easier to mass produce and could be delivered via subcutaneous injections, making them more scalable and enabling earlier treatment.

“This could be a huge advantage over the infused [antibody] cocktails, especially if the COVID vaccines further shift the market from severe, inpatient to at-risk symptomatic outpatient,” wrote SVB Leerink analyst Daina Graybosch, in a research note.

The companies will use Novartis’s generic division, Sandoz, to ramp up worldwide supply of the medicines, should testing prove them safe and effective.

The first of the two experimental treatments, known as MP0420, is expected begin human trials in November.

Molecular Partners shares climbed 30% in early trading on Wednesday.