Applied Genetic Technologies Corp. (NASDAQ: AGTC) and Biogen Inc. (NASDAQ: BIIB) have announced a collaborative partnership to develop gene therapies for ophthalmic disease. According to the companies, the collaboration will focus on the development of AGTC’s current therapeutic programs, a clinical candidate for X-linked Retinoschisis (XLRS) and a pre-clinical candidate for the treatment of X-Linked Retinitis Pigmentosa (XLRP). Both indications represent attractive orphan markets that may be addressed by replacing a single, faulty gene causing each disease. XLRS affects young males beginning during teenage years leading to a number of complications including vitreous hemorrhage or retinal detachment during early adulthood while XLRP causes night blindness by the age of ten years and often progresses to legal blindness by a patient’s early forties.
AGTC, based in Gainseville, Florida was founded in 2001 by leading AAV scientists at the University of Florida. The company secured rights to a broad portfolio of IP assets focused on the use of AAV vectors for gene therapy applications. The company claims to have licenses to over 40 US and foreign patents and, prior to its IPO in April 2014, had raised over $45M in venture financing. At IPO, the company raised just over $50 million on the US NASDAQ, selling 4.2 million shares at $12 per share valuing the company at $160.7 million. As of Aug 3rd, 2015, the market cap of the company was just under $310M. As part of the deal with Biogen Inc., AGTC receives an upfront payment of $124 million which includes a $30 million equity investment in AGTC and certain prepaid research and development expenditures. Biogen receives an exclusive license to the XLRS and XLRP programs and an exclusive option to license discovery programs for three additional indications at a later point in time. According to a press release from AGTC, the company expects to receive aggregate payments exceeding $1 billion which includes up to $472.5 million collectively for the two lead programs, royalties in the high single digit to mid-teen percentages and additional payments of up to $592.5 million across the discovery programs. Under a manufacturing license, Biogen will receive an exclusive license to use AGTC’s proprietary technology platform to make AAV vectors for up to six genes, three of which will be at AGTC’s discretion, in exchange for payment of milestones and royalties.
Commenting on the announcement of the commercial partnership, Olivier Danos, Senior VP at Biogen, stated, “With this collaboration, we hope to advance gene therapies to open possibilities for patients who suffer from diseases that are well understood, but have no adequate treatment. AGTC is an exceptional partner to help us advance our gene therapy capabilities by targeting diseases of the eye – an organ that provides an ideal setting for the localized, selective delivery of gene-based therapies.” Sue Washer, President and CEO of AGTC additionally commented, “We expect this collaboration 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. Biogen’s significant commitment to advancing gene therapies and demonstrated success in developing innovative therapies to treat complex diseases, combined with our proprietary manufacturing technology and extensive gene therapy experience, makes this an ideal partnership.”