Ann: First Subject Dosed in PKD Clinical Trial, page-38

Novartis will acquire Regulus for an initial payment of $7.00 per share in cash at closing, or $0.8 billion. The upfront cash portion of the consideration represents a premium of 274 percent to Regulus' 60-day volume-weighted average stock price and 108 percent to Regulus' closing price on April 29, 2025. In addition, Regulus shareholders will receive a contingent value right (CVR) providing for payment of $7.00 per share, contingent upon the achievement of a milestone with respect to regulatory approval of Regulus' lead product candidate, farabursen. Total consideration including the CVR, if the milestone is achieved, would be approximately $1.7 billion. The transaction has been unanimously approved by the Boards of Directors of both companies.

https://ir.regulusrx.com/2025-04-30...-into-Agreement-to-be-Acquired-by-Novartis-AG

So, Regulus (RGLS) will be acquired for US$800m (US$7 per share) now, three months after announcing Phase 1b MAD results for its ADPKD asset (farabursen), and with a pivotal trial already aligned with the FDA expected to commence in Q3 this year. If the pivotal trial is a success and the asset is susbsequently approved by the FDA, Novartis will pay another US$7 per share (the CRV for this component is non-tradeable), thus acquiring the company for ~US$1.7bn in total. Not mentioned is that Regulus has a patent and technology licensing agreement for this asset with The University of Texas at Southwestern Medical Centre and Novartis will also need to pay them certain amounts upon the achievement of certain clinical, regulatory and commercial milestones in the development of farabursen.

It’s important to note here that this is the only clinical asset that Regulus has and its other programs are only at lead optimization stage. Further, Regulus currently has only ~US$60m in cash and securities, enough, it says, to get it through to the beginning of next year. In other words, with this deal, Novartis is valuing the Regulus RNA asset for ADPKD, if FDA approved, at US$1.7bn (A$2.65bn).


What were the Phase 1b MAD results and how does farabursen compare with PYC-003?

Positive interim results for half of the final Phase 1b cohort were announced on 29 January this year and final results for the full cohort were announced on 27 March.

Farabursen is a naked antisense oligonucleotide therapy with a different mechanism of action to PYC-003.

In its pivotal trial, Regulus will use a 300mg fixed dose, administered subcutaneously every 2 weeks.

In comparison, PYC is testing 0.4 – 2.4 mg/kg PYC-003 in its Phase 1 SAD study, with an optional higher dose of 4.0 mg/kg. The PYC treatment is expected to be dosed intravenously every 2 months. Another difference is that PYC-003 has higher delivery to the liver, in addition to the kidney. This has been suggested to be desirable as 90% of ADPKD patients also develop liver cysts.

Regulus is 18 mths-2 yrs ahead of PYC in development.


What did Phase 1b MAD results do for the Regulus share price?

Perhaps sit down before you read this.

After successful interim results were announced in late January for the first half of the final cohort in Phase 1b MAD, the Regulus share price actually dropped slightly. On 1 February 2025, exactly 3 months ago, RGLS was trading @ US$1.00 per share and the company MC was just US$110m, down from US$240m 9 months previously. But then again, the market cap of Regulus was just US$14m in March 2023!

The share price has gradually risen from early February to US$2 just two weeks ago. Immediately prior to this week’s announcement, RGLS was trading @ US$3.37, an almost 70% rise in just 2 weeks.


Why Novartis?

Novartis has an established renal franchise. Two years ago it acquired clinical-stage Chinook Therapeutics for US$3.2bn. Chinook had one rare kidney drug in Phase 2 and another in Phase 3.

But there are other large players in this space as well, including Astra Zeneca, GSK, Amgen, AbbVie, Pfizer and Roche.

Smaller players also have interest, as demonstrated by the US licensing deal announced by Dimerix today for its Phase 3 kidney asset with US$2.4 MC biopharma, Amicus Therapeutics.


My observations?

I have been watching RGLS closely for quite some time now. The pummelling down of its share price to just $1 even after announcing great results in late January certainly caught my attention, as did the 70% rise in share price in the past 2 weeks. I find it difficult to avoid the conclusion that both were related to this just-announced acquisition.