July 2, 2015
iogen Inc. will broaden its gene therapy pipeline by signing a partnership with Applied Genetic Technologies Corp. worth about $1 billion to develop ophthalmology treatments.
AGTC will get an upfront payment of $124 million, which includes a $30 million equity investment, according to a statement on Thursday. Biogen will also make additional payments for development and sales milestones that could make the agreement worth more than $1 billion, the companies said.
AGTC shares surged 21 percent to $19.62. The company, based in Alachua, Florida, is one of several gene therapy companies targeting genetic disorders in the eye. Biogen will license to AGTC’s two leading candidates, which target rare inherited eye disorders that can lead to blindness, caused by mutations in single genes.
“This will be a source of innovation for us, for sure,” said Olivier Danos, senior vice president of cell and gene therapy at Biogen. “We’re very interested in gene therapy in the long term.”
The Cambridge, Massachusetts-based biotechnology firm has been building a gene therapy program through a research deal with the San Raffaele-Telethon Institute for Gene Therapy to develop treatments for the blood disorders hemophilia A and B, and a partnership with Sangamo BioSciences Inc. for sickle cell disease and the blood disorder beta thalassemia.
While gene therapy has the promise to cure genetic disorders with a single procedure, it’s far from proven. Shares of Avalanche Biotechnologies Inc. plunged when the company said on June 15 that patients with an age-related chronic eye disease still needed injections from another drug after being treated with its gene therapy.
Disappointments
These disappointments are “absolutely normal kinds of bumps in the road that you find in development,” said Danos.
Opthalmology is a new area for Biogen, which is best known for multiple sclerosis drugs. One of AGTC’s treatments, for a disorder called X-linked retinoschisis, has started its first human trials. Another, for X-linked retinitis pigmentosa, is still in pre-human testing.
“We believe the technology is mature enough to be used as a drug,” Danos said.
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