Astellas takes $340M charge on Evrenzo, joins GSK in nixing cell therapy collab with Adaptimmune

Astellas is doing some house cleaning under new CEO Naoki Okamura, writing off assets before its full-year earnings report.

The Japanese pharma will take an impairment loss of about 45 billion yen ($340 million) related to the FibroGen-partnered anemia drug Evrenzo, also known as roxadustat. The charge specifically relates to the drug not meeting sales expectations.

Simultaneously, Astellas said it has decided to pull the plug on a regenerative hearing loss candidate dubbed FX-322, which just failed in a phase 2b trial. Astellas licensed the drug from Frequency Therapeutics.

In another R&D rewinding, Astellas is ending a partnership with Adaptimmune Therapeutics around stem cell-derived, off-the-shelf T cell therapies. The termination deals another blow to Adaptimmune as GSK just walked away from their cell therapy collaboration as well.

The Frequency and Adaptimmune setbacks led Astellas to book impairment charges of 8.6 billion yen and 4.7 billion yen, respectively.

Astellas announced the moves Tuesday, ahead of its fiscal year 2022 earnings report, which is scheduled for April 27. Because of the new losses, Astellas expects its full-year profit to come in at about 105 billion yen ($790 million), or 30% lower than previously projected.

The three actions were largely expected.

Evrenzo is approved in Japan and Europe for anemia associated with chronic kidney disease in both dialysis and non-dialysis patients. After lackluster growth, Astellas said it took the charges “considering the sales situation in each country.” In the nine months ended in December, Astellas only recorded 2.4 billion yen ($18 million) from Evrenzo.

The situation was no better for Evrenzo’s original developer FibroGen and its other partner AstraZeneca. Following an FDA rejection in 2021 and a failure by the companies to agree on a clinical path forward for the drug in CKD anemia, FibroGen is shifting its focus to other anemia types. The company is awaiting a phase 3 readout in myelodysplastic syndromes and a China phase 3 readout in chemotherapy-induced anemia, with both expected by June.

As for FX-322, Astellas obtained ex-U.S. rights to the small-molecule therapy in 2019 by paying Frequency $80 million up front. At that time, Frequency was in the process of launching a phase 2a study.

But fast forward to February, Frequency said a phase 2b trial found that FX-322 had failed to improve speech perception in people with noise-induced sensorineural hearing loss, the most common type of hearing loss. As a result, Frequency decided to discontinue FX-322 and a second hearing loss program.

Turning to Adaptimmune. Astellas originally partnered with the U.K. cancer immunotherapy specialist in a broad deal covering allogeneic CAR-T and TCR T-cell therapies in 2020. For $50 million upfront, Adaptimmune agreed to pick out up to three targets for Astellas.

Then things took a turn last year for Adptimmune. In October, GSK said it would return full control of a nearly clinical trial-ready PRAME-targeted TCR T-cell program, plus the clinical-stage NY-ESO cell therapy.

As for Astellas, these setbacks add on to the repeated hiccups the company has run into for its gene therapy projects. The Japanese pharma a year ago took a $170 million impairment loss from ending its Duchenne muscular dystrophy gene therapy candidates. And the company just got a reprieve in January when the FDA lifted a clinical hold on a phase 1/2 study for its Pompe disease gene therapy.

But there’s also been some good news for the drugmaker. Astellas’ Seagen-partnered Padcev just got a key FDA approval for use alongside Merck & Co.’s Keytruda as a first-line treatment for bladder cancer patients who are ineligible for cisplatin-based chemotherapy.

To charter the next phase of growth, Astellas elevated Naoki Okamura as its new CEO starting in April. As the company put it, 2023 is the “right time to go on the aggressive to further accelerate growth.”

Under a five-year strategic plan, Astellas aims to reach 1.2 trillion yen ($900 million) in combined sales for Pfizer-partnered Xtandi and six “strategic products” by fiscal year 2025. Both Padcev and Evrenzo are on the list.

As for R&D investments, Astellas has said it will mainly focus on five areas: genetic regulation, immuno-oncology, blindness & regeneration, mitochondria, and targeted protein degradation.