Dimension Therapeutics has agreed to be acquired by RegenxBio, the gene therapy developer that originally helped form the company four years ago.
RegenxBio (NASDAQ: RGNX), based in Rockville, MD, will pay $3.41 per share in the all-stock deal valued at approximately $86 million. By comparison, Cambridge, MA-based Dimension (NASDAQ: DMTX) went public at $13 per share in 2015. Dimension’s closing stock price on Thursday was $1.20.
The acquisition agreement comes two months after Dimension laid off a quarter of its staff and shifted its priorities away from its experimental hemophilia B gene therapy, DTX101. Dimension made those moves in the wake of early clinical trial results that suggested the therapy prompted a possible immune system response. While immunosuppressive steroids can tamp down these responses, such treatment can also diminish the effect of gene therapy. Dimension’s stock price tumbled by nearly 50 percent on those January results.
Gene therapies aim to treat inherited disorders by transplanting normal genes that correct or fix genes that are missing or defective. Fixing the gene is meant to address the root cause of a disease and offer a long-lasting treatment, and perhaps even a cure. The FDA has not yet approved any gene therapies, but at one point, Dimension was in the mix of companies aiming to bring these treatments to the market. Spark Therapeutics (NASDAQ: ONCE) has since emerged as the company likely to receive the first U.S. gene therapy approval. The Philadelphia biotech’s lead gene therapy candidate, a potential treatment for an inherited form of blindness, is currently being reviewed by the FDA. Spark has also reported progress in early-stage clinical trials for its hemophilia B gene therapy candidate.
Dimension’s gene therapies deliver healthy genes using a modified virus, a gene delivery technology that was developed by RegenexBio. In 2013, RegenxBio joined with Fidelity Biosciences to form Dimension. Dimension’s scientific and technical advisory board was led by James Wilson, a University of Pennsylvania geneticist who was RegenxBio’s scientific founder.
In acquiring Dimension, RegenxBio will add to its pipeline two Dimension gene therapy candidates: One compound, called DTX301, is being prepared to start clinical testing in patients who have ornithine transcarbamylase (OTC) deficiency, a disorder characterized by the lack of an enzyme key to breaking down and removing nitrogen from the body. The other compound, DTX401, is in development as a potential treatment for glycogen storage disease type 1a (GSD1a), an inherited disorder that leads to the buildup of a complex sugar called glycogen. RegenxBio will also acquire other preclinical compounds in development, as well as intellectual property that Dimension developed using RegenxBio’s technology.
The merger agreement prohibits Dimension from seeking a better deal, and the company has agreed to unspecified “certain restrictions” on responding to any proposals that may come its way, according to a securities filing. Dimension shareholders still need to sign off on the deal, which has received approval from the boards of directors of both companies. But if Dimension calls off the deal, it must pay RegenxBio a $2.85 million termination fee, according to the filing.
The companies expect to close the acquisition by the end of 2017. Upon closing, Dimension will become a subsidiary of RegenxBio; Dimension shareholders will own approximately 10.9 percent of the combined company, according to the agreement.
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