Novo Nordisk may be breaking Heartseed's heart. As part of a company-wide restructuring under new CEO Maziar Mike Doustdar, the big pharma has axed a cell therapy collaboration with Heartseed worth nearly $600 million biobucks.
Novo and Heartseed had been working together since 2021 on Heartseed’s allogeneic cell therapy, designed to restore heart muscle and function for patients with advanced heart failure. The arrangement (PDF) put Heartseed in line for up to $598 million, including a $55 million upfront payment and near-term milestones.
Now, the Danish drugmaker has unceremoniously called off the deal, informing its ex-partner that the termination stems from “strategic reviews and shifts” in its business, Heartseed said in a Sept. 30 disclosure (PDF).
Earlier this month, Novo formally announced a “company-wide transformation” that looks to focus primarily on growth opportunities in diabetes and obesity—and save billions in the process.
Although Heartseed was aware of Novo's restructuring, it was “difficult to reasonably foresee” the termination of the deal, which it became aware of after the internal decision had been made at the pharma.
In its disclosure, the biotech pointed to Novo’s continuing work in the cardiovascular space and the fact that heart failure is closely linked to diabetes and obesity. Plus, the collaboration had been “progressing smoothly at the operational level,” according to Heartseed.
Heartseed’s therapy is made up of clusters of purified heart muscle cells derived from induced pluripotent stem cells (iPSCs). The therapy is transplanted during open-heart surgery alongside a coronary artery bypass graft procedure.
A phase 1/2 trial evaluating the investigational treatment among 10 patients with a severe form of the condition just wrapped at the end of July, according to ClinicalTrials.gov.
Under the Novo deal, Heartseed was to retain its development rights in Japan, while Novo would hold exclusive development and commercialization rights worldwide and share profits 50/50 in Japan.
Considering that the company had handed off international development, manufacturing, commercialization and regulatory submission duties to Novo, Heartseed will now have to “review the overseas partner strategy and business plan going forward.”
“This will impact our future business strategy,” Heartseed said. For now, the company will focus on developing the treatment in Japan using its existing funds. All intellectual property that Novo had licensed will be returned to Heartseed.
A Novo spokesperson confirmed the decision to discontinue the collaboration for “strategic reasons” and said the company will share more in a third-quarter earnings release on Nov. 5.
The big pharma’s sweeping restructuring plan is also expected to send about 9,000 staffers packing in order to “realign resources toward high-impact R&D” and commercial efforts, while also fostering a “more agile organization,” Doustdar explained in a LinkedIn post. The new CEO took the wheel at Novo after months of market challenges and share price declines under previous head Lars Fruergaard Jørgensen.
“Sometimes the hardest decisions are the right ones for the future we're building,” Doustdar added on LinkedIn.