La Jolla Pharmaceuticals dreams of building a lucrative business from its stable of drugs used in infectious diseases never really paid off, and the company has now sold itself to royalty and asset management firm Innoviva in a deal valued at $149 million.
The deal centres on La Jolla’s lead product Giapreza (angiotensin II), used to to increase blood pressure in adults with septic shock, and antibiotic Xerava (eravacycline) for complicated intra-abdominal infections (cIAIs), approved by the FDA in 2017 and 2018, respectively.
La Jolla had high hopes for Giapreza in particular, amid forecasts that sales could reach $500 million or more, but the product has never really taken off. Last year it brought in just $33 million, well shy of expectations.
Giapreza was unable to release the grip on the market of rival therapy Vasostrict (vasopressin) from Endo Pharma, which made more than $900 million last year thanks to rising use in patients hospitalised with COVID-19.
However, with lower-cost generics of Endo’s drug now reaching the market, Giapreza is facing even more competitive pressure.
Xerava meanwhile – acquired by La Jolla as part of a $59 million takeover of Tetraphase Pharma in 2020 – was always going to a small product as like most new antibiotics it is reserved for use in resistant infections. Sales came in at just over $10 million last year, whereas at launch some analysts were predicting it could become a $250 million-plus product.
La Jolla has been able to keep its cash reserves fairly constant at around $46 million each quarter, but there’s no disguising that it has been struggling.
The failure of a key pipeline drug to treat iron overload in beta thalassaemia patients in 2019, and an aborted attempt to bring a malaria drug to market a year later, has left the company with slow-growing commercial products and little coming through the pipeline.
CEO Larry Edwards said the Innoviva deal “provides our stockholders with immediate value at a compelling premium.”
For Innoviva, the acquisition builds its presence in anti-infectives, an area the company had previously bought into with the takeover of AstraZeneca spinout Entasis Therapeutics and its late-stage antibiotic candidate SUL-DUR for serious infections caused by the pathogen Acinetobacter baumannii.
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