Eli Lilly (Lilly) has agreed to make a $10m upfront payment for full worldwide rights to San Diego-based Organovo Holdings’ farnesoid X receptor (FXR) agonist programme, aimed at treating inflammatory bowel disease (IBD).
Under the deal, Lilly will pay $10m upfront and up to $50m in milestones, as per a Securities and Exchange Commission (SEC) filing, for rights to the programme that includes a Phase II asset trialled for ulcerative colitis (UC) and metabolic dysfunction-associated steatohepatitis (MASH).
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Following the 25 February announcement, Organovo’s shares surged, closing 243% higher that day. The company’s lead asset, dubbed FXR314, is central to the agreement.
FXR314 acts on the FXR, a nuclear hormone receptor that plays a key role in carbohydrate and lipid metabolism, insulin sensitivity regulation, and liver regeneration during injury.
Organovo presented Phase II trial (NCT04773964) data for FXR314 in MASH in November 2024. Results showed a statistically significant reduction in liver fat content compared to placebo, with the highest dose achieving a 22.8% mean reduction compared to 6.1% in the placebo group. A greater proportion of patients receiving FXR314 also achieved more than a 30% reduction in liver fat. Additionally, the drug demonstrated a favourable safety profile.
At the time of the MASH data release last year, Organovo expressed enthusiasm about continuing FXR314’s development in MASH. However, in its announcement with Lilly, the company only mentions its focus on IBD. A Phase II trial in IBD is planned, with initiation expected in Q4 2025. Organovo has previously said it sees potential for FXR314 in metabolic liver disease and oncology.
These findings are surprising because FXR agonism as a therapeutic approach for MASH has faced significant hurdles. Intercept Therapeutics’ efforts with FXR agonist Ocaliva (obeticholic acid) ended in disappointment when the US Food and Drug Administration (FDA) rejected the drug for MASH in 2023, forcing the company to cut a third of its workforce. A second FDA rejection last year – this time for primary biliary cholangitis (PBC) – further solidified the challenges of FXR-targeting drugs in liver disease.
Alternative mechanisms of action have since gained traction in MASH treatment. Madrigal Pharmaceuticals’s Rezdiffra (resmetirom), a small molecule THRB agonist, was the first drug approved by the FDA for the illness in March 2024. In addition, Eli Lilly announced earlier this month that it is paying $630m for South Korea-based biotech OliX Pharmaceuticals’ antisense RNAi oligonucleotide OLX75016 to treat MASH.
