Gene Therapy’s Rebirth Continues With Bristol, UniQure Cardio Deal

Xconomy New York — 

There’s no doubt at this point that gene therapy research, after a decade proceeding in relative obscurity, is back. A host of companies are racing to find the best way to harness the science to treat hemophilia, for instance. But a deal this morning between Bristol-Myers Squibb and UniQure focuses on a wider set of diseases—and is the broadest bet Big Pharma has made to date in the field’s resurgence.

New York-based Bristol (NYSE: BMY) this morning struck a wide-ranging alliance with UniQure (NASDAQ: QURE), the Dutch firm responsible for the world’s only approved gene therapy product (Glybera). Through the deal, Bristol has grabbed a license to gene therapies UniQure is developing for several cardiovascular diseases, among them congestive heart failure, and potentially other disorders as well. In total, Bristol and UniQure may team up on ten gene therapy targets, starting with a heart function regulator called S100A1 that is implicated in congestive heart failure.

Bristol is paying UniQure $50 million in cash and at least $32 million in equity up front. (Bristol is buying 4.9 percent of UniQure’s shares at $33.84 apiece, a roughly 50 percent premium to their $22.86 closing price on Friday.) It will pay another $15 million within three months when three gene therapy targets are selected. Bristol has agreed to buy another 5 percent of UniQure by the end of the year at a 10 percent premium, along with warrants for yet another 10 percent of the company at a premium based on more targets being introduced into the deal.

UniQure could also get $254 million in future payments for the congestive heart failure program, and $217 million apiece for each other gene therapy to come from the deal. Those figures don’t include unspecified milestones tied to net sales, or royalty streams. So all told, the deal—if it works out—could net UniQure more than $2 billion.

This isn’t the only pharma-backed gene therapy deal of late, of course. Gene therapy alliances have been sprouting up in several places over the past few years, a testament to the advances that have been made in delivering these treatments and the early human clinical data they’ve started to produce. But so far, most of those bets have been made in specific diseases—like hemophilia (Spark Therapeutics/Pfizer and Dimension Therapeutics/Bayer)—or in private companies, such as Sanofi/Genzyme’s deal with Voyager Therapeutics in neurological diseases. Bristol is making a substantial, broad bet on a public company, and could end up owning close to 20 percent of UniQure should the alliance progress. That would make Bristol one of UniQure’s largest backers—prior to UniQure’s February 2014 IPO, its two most significant investors were Coller International Partners (44.5 percent) and Forbion (35.6 percent).

Also noteworthy is Bristol’s choice of UniQure over San Diego’s Celladon (NASDAQ: CLDN), which is also developing a gene therapy for congestive heart failure. Celladon’s treatment is in a mid-stage trial expected to produce data imminently.

“Bristol-Myers Squibb has an excellent and long-standing track record of success in discovering and developing treatments for cardiovascular diseases and in embracing advancing technologies for the treatment of human diseases,” said Bristol’s head of discovery and R&D, Carl Decicco. “Collaborating with UniQure, a clear leader in the field with an innovative and validated gene therapy platform, further strengthens our capability to bring forward transformational new therapeutics for difficult-to-treat diseases, including cardiovascular diseases such as heart failure.”

The deal is expected to close in the second quarter. UniQure shares surged 44 percent in pre-market trading on Monday.