Neurocrine Pays $165M to Bankroll Voyager’s Gene Therapy for Parkinson’s

Xconomy Boston — 

[Updated, 11:40 a.m. ET, see below] The road to potential approval for Voyager Therapeutics’ experimental gene therapy for Parkinson’s disease got a bit longer, and more expensive, last year. So this morning the company cut a deal with Neurocrine Biosciences to bankroll the journey—and forfeit some of the financial upside for the product, known as VY-AADC.

Neurocrine (NASDAQ: NBIX) has agreed to pay Voyager (NASDAQ: VYGR) $115 million in cash and buy $50 million worth of the Cambridge, MA, company’s shares at $11.96 apiece—a roughly 50 percent premium to its $8.04 closing price on Monday. In return, San Diego-based Neurocrine will gain rights to Voyager’s VY-AADC, an experimental gene therapy for Parkinson’s disease, and pick up the tab for late-stage clinical development.

VY-AADC is currently in mid-stage testing. Once the data from the ongoing trial, RESTORE-1, come in, Voyager can opt to either split U.S. rights to VY-AADC and the costs of development, or hand Neurocrine full rights and get downstream payments and royalties.

The deal also includes an alliance on VY-FXN01, a gene therapy for Friedreich’s ataxia that has yet to begin human testing. As with VY-AADC, Voyager will have the option to either split costs and U.S. profits with Neurocrine or offload the costs of development in return for just milestone and royalty payments. Sanofi already has non-U.S. rights to the gene therapy under a 2015 alliance.

Neurocrine is also funding development of two other unspecified preclinical gene therapies. Voyager, again, could get future payments if the programs progress. The deal includes a potential total of $1.7 billion in downstream payments if all goes well.

Voyager shares climbed 37 percent, to $11 apiece, in early trading on Tuesday. Neurocrine shares slumped about 4 percent, to $85.44.

The deal marks a change in strategy for Voyager, which lost Sanofi as a partner for VY-AADC in 2017. Sanofi had asked to change the terms of their broad 2015 deal and get partial U.S. rights to VY-AADC, but then-CEO Steven Paul balked, and Sanofi walked away. “All we know is we’re pleased to retain worldwide rights to this program,” Paul said at the time. “We believe this is a winner, and we believe this will be a launched product for us.”

Since then, VY-AADC—a gene therapy meant to help Parkinson’s disease patients whose medication is no longer working well—has continued to show promise in early clinical testing, but its path forward has gotten longer. The company reported in November that the ongoing placebo-controlled Phase 2 study, RESTORE-1, wouldn’t be enough to support an “accelerated” (quicker than normal) approval filing for the gene therapy because the FDA considered the trial an “early phase exploratory study.” Earlier this month, Voyager said after meeting with the FDA that it would boost the size of RESTORE-1 to 100 patients and run a “staggered-parallel,” similarly sized and designed Phase 3 trial called RESTORE-2. Data from both, if positive, could support an approval filing. The Neurocrine deal helps Voyager finance those studies, but at the cost of some rights to VY-AADC.

Meanwhile, the deal gives Neurocrine a new late-stage development program after its flagship drug valbenazine (Ingrezza) failed multiple studies in Tourette’s syndrome. The drug is already on the market for tardive dyskinesia, a loss of motor function associated with long-term use of certain neurological drugs.

[Updated with analyst comments] In a research note, Stifel analyst Paul Matteis called the alliance smart for Neurocrine, given the “modest” price it paid to get access to four experimental gene therapies. Still, he views VY-AADC as a “high-risk” program. Though testing so far appears to show a “true efficacy signal,” it’s unclear how long that benefit will last, whether it will be seen in a large, placebo controlled trial, and whether it will be significant enough to justify a high price tag and an invasive surgical procedure. (VY-AADC has only been tested in single-arm studies, not against a placebo, and it is administered via brain surgery.)

Here’s more on Voyager, VY-AADC, and other gene therapies in development for Parkinson’s.