Roche pulls out of deal with Actelion on ACT-128800 following portfolio review

Drug major Roche revealed last night that it is ending a deal with fellow Switzerland-based biotechnology firm Actelion to develop a drug to treat autoimmune diseases, citing as the reason for the decision an R&D portfolio review started after its completion of the full takeover of US biotech Genentech in March.

Actelion's shares slipped 1.6% to 59.15 Swiss francs in early morning trading a result of the unexpected news, against a dip of 0.1% slip in the Stoxx Europe health index.
Specifically, Roche is pulling out of further development of the orally-available and selective S1P1 receptor agonist (ACT-128800) in psoriasis. ACT-128800 is already in advanced clinical development for multiple sclerosis, where a dose-finding study has started recruiting patients in early October 2009, and Actelion says it will proceed with these and other autoimmune indications.

The decision by Roche to leave the alliance results in accelerated recognition of the deferred revenues from milestones previously paid to Actelion. As of the date of termination, the amount of this was $88.7 million, which will be recognized over the six months starting in December of this year, said Actelion. Actelion now has 100% of the rights to the drug but will miss out on potential milestone payments of between $350 million and $400 million, and will bear the full cost of development.

Jean-Paul Clozel, chief executive of Actelion commented: "Actelion has all the assets at hand - medical know-how, global development, global sales and marketing capabilities and strong cash flow - to successfully develop and commercialize our promising selective S1P1 receptor agonist in several indications."