Macrocyclic peptide start-up scores $1.5 billion deal with Argenx

The biopharma company Argenx has tapped the start-up Unnatural Products to develop macrocyclic peptides with the goal of bolstering its inflammatory and immunological drug roster with once-daily pills.

The companies place the partnership’s value at up to $1.5 billion, including an undisclosed up-front payment in the double-digit millions, milestone payments, and research and development funding. Argenx will also make an equity investment in Unnatural Products as part of the deal.

The timing couldn’t be better for Unnatural Products, CEO Cameron Pye says. It has collaborations underway with BridgeBio Pharma and Merck & Co. for rare diseases and cancer. Finding new equity investment has been difficult amid the downturn in the biotechnology market, making partnerships an attractive business strategy. Pye says he and his team had been planning to reach out to Argenx about a potential deal when, about 6-9 months ago, Argenx’s business development group approached the start-up first.

“We’ve always found [collaborations] to be great opportunities, not just to bring dollars in the door when the equity markets can be a little bit challenging—as they have been for, say, the last half-decade—but also to bring some additional learnings and strategy to the table,” Pye says.

Backing from Argenx also helps Unnatural Products “claw our way up the validation ladder as a small company,” Pye says. Argenx focuses on immunology and sells antibody drugs for myasthenia gravis, primary immune thrombocytopenia, and chronic inflammatory demyelinating polyneuropathy. Fueled by new US Food and Drug Administration approvals of its lead product, Vyvgart, Argenx turned a profit last year for the first time.

Like other antibodies, Vyvgart—generically called efgartigimod—must be delivered by infusion or injection. So does the second investigational drug in Argenx’s pipeline, empasiprubart. In contrast, Unnatural Products intends to develop oral macrocyclic peptides that can be given as simple pills.

Macrocyclic peptides are small chains of amino acids that form loops. The shape is important: it provides more surface area for the peptides to disrupt protein-protein interactions, and it helps the drug stay intact inside the body—unlike traditional antibodies, which are vulnerable to breakdown by proteases. That stability also means macrocyclic peptides should remain stable on pharmacy shelves without the cold storage that traditional antibodies require.

With antibodies, “patients now suddenly have options that they never had before,” Pye says. “They can treat and manage their diseases in a way that was really unmanageable even 5 or 10 years ago, but they come with a lot of asterisks,” he adds. “What we’re looking to do is remove those asterisks and provide a shelf-stable, once-daily, oral pill solution for these things.”

Pye declines to name the exact targets or diseases involved in the Argenx partnership or to specify any clinical development timelines other than “as fast as possible.” The deal encompasses multiple targets of interest that Argenx has identified, which are involved in multiple indications, according to a press release.

Meanwhile, the 40-person team at Unnatural Products continues to advance its internal pipeline alongside the partnered assets. Pye says it is also in the process of raising a series B financing round.