California-based Arrowhead Research Corporation, a biopharmaceutical company developing targeted RNAi therapeutics, has acquired Novartis' entire RNAi research and development portfolio and associated assets.

The acquisition includes assignment of certain patents and patent applications owned or controlled by the Swiss drugmaker related to RNAi therapeutics, an exclusive license in the RNAi field to other patents and patent applications owned or controlled by Novartis, assignment of a third party license, three pre-clinical RNAi candidates, and other related assets.

Under the terms of the agreement, Arrowhead has made an upfront payment of $7 million in cash and will provide an additional payment of $3 million in cash and $25 million in Arrowhead common stock within 30 days.

The deal includes a pipeline of three candidates initiated by Novartis and for which Novartis has developed varying amounts of preclinical data. The Swiss company is also eligible to receive milestones and single digit royalties on sales of future products in connection with the agreement.

Novartis has been working in the RNAi field for over a decade and its developments in proprietary oligonucleotide formatting and modifications "are some of the best we've seen," said Arrowhead CEO Christopher Anzalone.

We anticipate this acquisition will provide us with substantially expanded freedom to operate, proprietary technology that appears to enhance the activity of RNAi triggers, access to non-delivery Alnylam RNAi IP for 30 targets, and three programs that went through the rigorous Novartis vetting process," Anzalone added.