Biogen Offers Up To $1 Billion for AGTC’s Ophthalmology Gene Therapy

Xconomy Boston — 

Biogen’s revitalized interest in gene therapy continues with a deal the Cambridge, MA-based biotech giant announced this morning.

Biogen has agreed to pay $124 million upfront (including about $30 million that came as an equity investment) and as much as $1.1 billion in future milestones to Gainesville, FL-based AGTC (NASDAQ: AGTC) for access to its portfolio of therapies targeting ophthalmology diseases. About half of the cash is tied to giving Biogen licensing rights to AGTC’s two lead experimental therapies for orphan diseases of the eye, x-linked retinoschisis (XLRS) and x-Linked Retinitis pigmentosa (XLRP).

Biogen (NASDAQ: BIIB) will have the option to license three other indications for AGTC’s gene therapy technology—which uses adeno-associated virus as a gene-delivery vector—when AGTC selects future clinical candidates. AGTC says it has developed a proprietary, patented method of producing the virus at a commercial scale.

The company already has a therapy in early stage clinical trials for XLRS, which has received orphan status in both the U.S. and Europe. The first round of data from those trials is expected later this year. AGTC may file an investigational new drug application for the XLRP in 2016, said Sue Washer, president and CEO of AGTC, during a conference call July 2.

XLRS is an inherited form of retinal degeneration in young men that can lead issues such as vitreous hemorrhage or retinal detachment as an adult, according to AGTC. XLRP is also inherited and causes boys to develop night blindness in their youth and can later turn to legal blindness, the company says.

The two indications could earn AGTC $472.5 million in milestone payments, depending on the results. The Biogen deal also includes royalties that could be in high single digit to mid-teen percentage of sales,the companies said in a statement.

Biogen will make payments of up to $592.5 million for the three other programs it has the option to license. Royalty payments on those would be slightly lower, the companies said in the statement.

AGTC will have various options for sharing in development costs and profits, and is leading clinical development of the XLRS treatment through the approval process. It will lead development through the first human trials of the XLRP treatment.

Part of the deal also includes a license for Biogen that allows it to use AGTC’s technology to make vectors of its own for as many as six genes, according to the statement. While Washer avoided directly answering whether Biogen would contribute any technology of its own into the deal, she said during the call that there is “a method for both parties to bring initial technology into the collaboration.”

Two of AGTC’s programs aren’t included in the deal, Washer said. The first is focused on an inherited condition called achromatopsia that can cause visual acuity loss and light sensitivity. The second is for a form of age-related macular degeneration known as wet AMD, the leading cause of blindness in the U.S., AGTC says.

“It was very important to AGTC to retain control over a portion of them, so it was negotiation between us and them to decide what they get what we retain,” Washer said.

Biogen has been making moves to reenter gene therapy after taking time away from the methodology, most recently having teamed with two Italian entities—the non-profit organization Fondazione Telethon and the research institution Ospedale San Raffaele—-to develop two gene therapies that treat the underlying causes of hemophilia A and B, Xconomy’s Ben Fidler reported in January.