Biogen, AGTC sign deal worth potentially over $1 billion to develop gene therapies for eye diseases

Biogen and Applied Genetic Technologies Corporation (AGTC) entered into a broad collaboration and licensing agreement valued at potentially more than $1 billion to develop gene-based therapies for multiple ophthalmic diseases, the companies announced Thursday. The partnership will focus on the development of AGTC's portfolio of therapeutic programmes, including a clinical candidate for X-linked retinoschisis (XLRS) and a pre-clinical candidate for the treatment of X-linked retinitis pigmentosa (XLRP). Olivier Danos, senior vice president of cell and gene therapy at Biogen, said "we're very interested in gene therapy in the long term," adding that "the technology is mature enough to be used as a drug."

Sue Washer, chief executive at AGTC, whose shares gained as much as 21 percent on the news, stated that the alliance "will further validate our novel adeno-associated virus (AAV) gene therapy platform and support the development of new therapies that may allow for transformative treatments for these rare inherited eye diseases and other clinical indications." Specifically, the agreement will provide Biogen with an exclusive license to use AGTC's technology platform to produce AAV vectors for up to six genes, of which three are at AGTC's discretion, in exchange for milestone payments and royalties.

Under the deal, which is expected to close in the third quarter, Biogen will make an upfront payment of $124 million to AGTC, including a $30-million equity investment in the company at $20.63 per share and certain prepaid R&D expenditures. Biogen will be granted a license to the XLRS and XLRP programmes, with the option to license discovery programmes for three additional indications. Moreover, AGTC is eligible for up to $472.5 million collectively for the two lead programmes, which will carry royalties in the high-single-digit to mid-teen percentages of annual net sales, as well as additional payments of up to $592.5 million across the discovery programmes, with royalties in the mid-single digits to low-teen percentages of annual net revenues.

The companies also said Biogen obtains worldwide commercialisation rights for the XLRS and XLRP programmes, with AGTC having the option to share development costs and profits after the initial clinical trial data are available, as well as the possibility to co-promote the second of these products to be approved in the US. Further, AGTC will lead the clinical development programmes of XLRS through product approval and XLRP through the completion of first-in-human studies, while Biogen will support clinical development costs following the first-in-human study for XLRS and investigational new drug enabling studies for XLRP.

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