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Astellas Bets On Gene Therapy With $3B Audentes Acquisition Offer

Xconomy National — 

Japanese drug giant Astellas Pharma announced late Monday it has agreed to buy Audentes Therapeutics, which is developing gene therapies for rare neuromuscular diseases.

It’s an all-cash deal worth $3 billion, with the Astellas offer of $60 per share representing a 110 percent premium to Audentes’ (NASDAQ: BOLD) share price of $28.61 apiece at market close Monday. The agreement is the latest big bet by a major pharmaceutical company on gene therapy, which aims to provide long-lasting, if not permanent, disease treatments.

San Francisco-based Audentes’ lead drug candidate, AT132, is a clinical-stage experimental treatment for X-linked myotubular myopathy (XLMTM), a condition that causes extreme muscle weakness—dangerously impacting those muscles used to control breathing and swallowing—that can result in respiratory failure and early death. According to Audentes, half of those with MTM1 are likely to die before age 2, and of those who survive past infancy, about 75 percent will live to age 10.

An estimated 1 of every 40,000 to 50,000 males worldwide are born with the condition, which is caused by a mutation in the MTM1 gene. The gene encodes for myotubularin, an enzyme involved in the development and maintenance of muscle cells, according to the National Institutes of Health. The Audentes gene therapy aims to deliver a functional copy of the MTM1 gene to patients using an adeno-associated virus, a popular gene therapy vector.

In October the company reported that the first seven patients treated with the investigational drug in a clinical trial no longer needed a ventilator to help them breathe, and had also gained the ability to stand or to walk. Audentes has other gene therapy programs in earlier stages of development targeting Pompe disease, Duchenne muscular dystrophy, and myotonic dystrophy.

Founded in November 2012 by then-OrbiMed entrepreneur-in-residence Matt Patterson, the San Francisco biotech went public in 2017, the same year the FDA approved the first marketed gene therapy in the US.

Later that year, in December, the FDA approved a Spark Therapeutics (NASDAQ: [[ONCE]]) treatment for a genetic form of blindness, the first US gene therapy. The Philadelphia-based biotech priced the drug, voretigene neparvovec (Luxterna), at $850,000 per treatment—one injection into each eye—in early 2018, intensifying conversations around how to pay for such treatments. (Read an Xconomy Q&A with Spark CEO Jeff Marrazzo on that topic from the J.P. Morgan Healthcare Conference in San Francisco that year.)

Then, in February, Swiss pharma giant Roche agreed to buy Spark for $4.8 billion. Finalization of the deal, however, remains elusive as antitrust review continues apace. Roche last month again extended the deadline, this time to Dec. 10.

Notwithstanding the drawn-out nature of that transaction, SVB Leerlink analyst Joseph Schwartz doesn’t anticipate similar concerns when it comes to Astellas and Audentes. The two companies’ pipelines appear to overlap only minimally, he wrote in a research note.

Tokyo-based Astellas, which is organized into four business areas, says it plans to add a fifth, focused on gene therapy programs, with the Audentes acquisition. The companies anticipate the deal will close in the first quarter of 2020.