NovaQuest backs German pharma’s osteoarthritis treatment

NovaQuest Capital Management expanded is royalty pipeline with a deal to support development of German pharmaceutical firm Grünenthal’s lead asset, the osteoarthritis product candidate resiniferatoxin (RTX).

Under the newly announced deal, NovaQuest will reimburse Grünenthal’s investments into late-stage studies of RTX and share the clinical development and approval risks with Grünenthal. If RTX receives marketing approval, NovaQuest will receive one-time payments or milestones and revenue-based payments over the course of the drug’s commercialization.

RTX is an injectable drug being developed as a non-opioid treatment option for pain relief in patients with advanced knee osteoarthritis. RTX works by inhibiting of Transient Receptor Potential Vanilloid 1, a chemical expressed on sensory neurons, providing long-lasting relief and functional improvement of the affected joints.

“Globally, more than 300 million patients suffer from osteoarthritis,” said Grünenthal Chief Scientific Officer Jan Adam. “For many of them, the available treatment options are not sufficient and they may at some point in time experience severe symptoms including pain.”

The funding provided by the deal will enable Grünenthal to advance RTX into Phase III trials to assess the efficacy, safety and tolerability of RTX. The trials are expected to begin this year and are designed to meet the requirements for marketing approval in the EU, the U.S., and Japan.

The osteoarthritis treatment market across the seven major markets of the U.S., France, Germany, Italy, Spain, the UK and Japan, is forecast to see a compound annual growth rate of 17.8% from 2014 to 2024, more than tripling in value from $3.25 billion to $10.49 billion, according to GlobalData.

Grünenthal, a privately-held firm based in Aachen, Germany, estimates potential peak sales for RTX to be above €1 billion in Europe and the U.S. for the treatment of knee osteoarthritis alone, but the company also aims to explore the potential of RTX for the treatment of osteoarthritis-related pain in additional joints beyond the knee.

“NovaQuest is excited to partner with the leading company in the therapeutic area of pain to develop RTX, a promising asset that may enter the market as soon as 2025,” said Ryan Wooten, Managing Director at NovaQuest. “We are confident that Grünenthal has the right capabilities in place to position RTX on the global osteoarthritis market and leverage the full potential of the asset for patients in need.”

NovaQuest Founding Partner and CIO Jonathan Tunnicliffe recently discussed the firm’s healthcare-focused investment approach with us. Check it out below.