12:42 PM EDT, 05/22/2024 (MT Newswires) -- Biogen (BIIB) announced a deal to buy privately held Human Immunology Biosciences for up to $1.8 billion, expanding its rare disease pipeline with an investigational candidate that aims to treat a kidney-specific disease.

The biotechnology company will pay $1.15 billion upfront and up to $650 million in potential milestone payments. Biogen's shares dipped 0.9% in Wednesday midday trade.

Human Immunology's lead asset felzartamab received Breakthrough Therapy Designation from the Food and Drug Administration in 2023 for developing treatment of primary membranous nephropathy, an immune-mediated disease affecting the kidneys. It received Orphan Drug Designation from the FDA in March for the treatment of antibody-mediated rejection in kidney transplant recipients.

"We believe this late-stage asset, which has demonstrated impact on key biomarkers and clinical endpoints in three renal diseases with serious unmet needs, is a strategic addition to the Biogen portfolio as we continue to augment our pipeline and build on our expertise in immunology," said Priya Singhal, Biogen's head of development.

Biogen expects to finance the transaction with cash and said it may also draw on its revolving credit agreement. The acquisition is scheduled to close in the third quarter pending regulatory approvals.

The deal is not expected to impact Biogen's 2024 guidance for total revenue to decline by a low- to mid-single digit percentage year over year and adjusted earnings per share to rise 5% at the midpoint to between $15 and $16, the company said. Analysts on average surveyed by Capital IQ are modeling for revenue of $9.52 billion and normalized EPS of $15.61 in the ongoing year.

"With its deep development and commercialization capabilities, Biogen is in a position to accelerate the development of new medicines, including felzartamab, for patients with severe immune-mediated diseases," said Human Immunology Chief Executive Travis Murdoch.

Biogen plans to retain Human Immunology's talent and establish a team focused on advancing the former's efforts in immune-mediated diseases. Human Immunology's pipeline also includes izastobart, or HIB210, which is currently in a phase 1 trial and is being studied as an antibody with potential for continued development in a range of complement-mediated diseases.

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