Novartis snaps up food allergy firm Excellergy for $2bn

With the ink barely dry on one takeover agreement, Novartis has signed another, promising to pay up to $2 billion to acquire US food allergy drug developer Excellergy.

The deal – which includes upfront and milestone payments – will build on Novartis' position in the category, which dates back to the approval of Roche-partnered IgE inhibitor Xolair (omalizumab) as the first FDA-approved drug therapy for food allergies in 2024. The Swiss pharma group's pipeline also includes Rhapsido (remibrutinib), already approved for chronic hives and in phase 3 for food allergy indications.

Buying Palo Alto, California-based Excellergy will give Novartis rights to a trifunctional allergic effector cell response inhibitor (ECRI), codenamed Exl-111, which started human testing in the phase 1 DISARM trial in February.

Like Xolair, Exl-111 targets IgE, but works via a different mechanism – dissociating receptor-bound IgE, rather than mainly targeting free IgE – without triggering receptor signalling or activation. According to Novartis and Excellergy, the drug could offer less frequent dosing and "faster, deeper […] suppression" of food allergy reactions.

Xolair is approaching the end of its patent life, but the food allergy approval has propelled sales growth in its twilight years, with US sales rising by a third last year to more than $3 billion.

Buying Excellergy would give Novartis a successor that could improve on Xolair and that it will own outright, as well as an ECRI platform with potential to generate therapies for a wide range of severe, IgE-mediated allergic diseases.

"Excellergy adds a differentiated next-generation anti-IgE programme that builds on biology Novartis knows well, supported by preclinical evidence and early clinical pharmacokinetic data," said Fiona Marshall, president of biomedical research at Novartis.

The drug offers the potential for "earlier symptom relief, stronger disease control, more convenient dosing, and broader use across food allergy, chronic spontaneous urticaria, chronic inducible urticaria, allergic asthma, and other IgE-mediated diseases, including potentially in paediatric populations," according to a company statement.

Excellergy was set up in 2021 with seed funding from Red Tree Venture Capital and is backed by Samsara BioCapital, Red Tree Venture Capital, and Decheng Capital. The transaction is subject to the usual closing conditions and is expected to close in the second half of the year.

The deal has been announced shortly after Novartis agreed to buy Synnovation Therapeutics' subsidiary company Pikavation Therapeutics and its pan-mutant selective PI3Kα inhibitor SNV4818, a breast cancer candidate, for $2 billion upfront with another $1 billion in potential milestone payments.