Biogen and AGTC Enter Collaboration to Develop Gene Therapies in Ophthalmology

Biogen and AGTC have announced a broad collaboration and license agreement to develop gene-based therapies for multiple ophthalmic diseases. The collaboration will focus on the development of a portfolio of AGTC’s therapeutic programs, including both a clinical stage candidate and a pre-clinical candidate for orphan diseases of the retina that can lead to blindness in children and adults. The agreement also includes options for early-stage discovery programs in two ophthalmic diseases and one non-ophthalmic condition, as well as an equity investment in AGTC by Biogen and a license agreement for manufacturing rights.

“With this collaboration, we hope to advance gene therapies to open possibilities for patients who suffer from diseases that are well understood, but have no adequate treatment,” said Olivier Danos, Ph.D., senior vice president, cell & gene therapy at Biogen. “AGTC is an exceptional partner to help us advance our gene therapy capabilities by targeting diseases of the eye — an organ that provides an ideal setting for the localized, selective delivery of gene-based therapies.”

“We expect this collaboration will further validate our novel adeno-associated virus (AAV) gene therapy platform and support the development of new therapies that may allow for transformative treatments for these rare inherited eye diseases and other clinical indications,” added Sue Washer, president and CEO of AGTC. “Biogen’s significant commitment to advancing gene therapies and demonstrated success in developing innovative therapies to treat complex diseases, combined with our proprietary manufacturing technology and extensive gene therapy experience, makes this an ideal partnership.”

The lead development programs in the collaboration include a clinical candidate for X-linked Retinoschisis (XLRS) and a pre-clinical candidate for the treatment of X-Linked Retinitis Pigmentosa (XLRP). XLRS, a disease affecting young males beginning during the teenage years, can lead to serious complications such as vitreous hemorrhage or retinal detachment during adulthood. XLRP usually causes night blindness by the age of ten and progresses to legal blindness by an individual’s early forties. Both conditions represent significant unmet needs that may be addressed by replacing the single, faulty gene causing each disease.

Collaboration Overview

Biogen will make an upfront payment in the amount of $124 million to AGTC, which includes a $30 million equity investment in AGTC at a price equal to $20.63 per share and certain prepaid research and development expenditures. Biogen will be granted a license to the XLRS and XLRP programs and the option to license discovery programs for three additional indications at the time of clinical candidate selection.

Under the collaboration, AGTC is eligible to receive upfront and milestone payments exceeding $1 billion. This includes up to $472.5 million collectively for the two lead programs, which also will carry royalties in the high single digit to mid-teen percentages of annual net sales. In addition, Biogen will make payments up to $592.5 million across the discovery programs, along with royalties in the mid single digits to low teen percentages of annual net sales.

Biogen obtains worldwide commercialization rights for the XLRS and XLRP programs. AGTC has an option to share development costs and profits after the initial clinical trial data are available, and an option to co-promote the second of these products to be approved in the United States. AGTC will lead the clinical development programs of XLRS through product approval and of XLRP through the completion of first-in-human trials. Biogen will support the clinical development costs, subject to certain conditions, following the first-in-human study for XLRS and IND-enabling studies for XLRP. Under the manufacturing license, Biogen will receive an exclusive license to use AGTC’s proprietary technology platform to make AAV vectors for up to six genes, three of which are in AGTC’s discretion, in exchange for payment of milestones and royalties.

The transaction is subject to customary closing conditions, including the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in the United States, and is expected to close in the third calendar quarter of 2015.

AGTC will host a live webcast presentation and conference call on July 2 at 8:00 a.m. EDT to discuss the collaboration. The webcast can be accessed at ir.agtc.com/events.cfm or by dialing (888) 427-9419 (US) or (719) 325-2491 (outside of the US) fifteen minutes prior to the start of the call. The passcode is 6785007. The webcast will be archived on the AGTC website.