Fresh from hauling in GSK’s budget-priced gene therapy group, Orchard harvests $150M mega-round. Is it time to IPO?
Just a few months ago Orchard Therapeutics was handed the opportunity of taking over GlaxoSmithKline’s gene therapy group, which had pushed the field’s second product, Strimvelis, to the European market — without seeing much in the way of a return.
This morning, Orchard is back in the news, adding $150 million to the reported $140 million it had already raised to get to this stage. And that may well include an IPO in the near future.
Likely to add to the IPO buzz, crossover investor Deerfield is leading the industry’s latest mega-round, which comes with little detail about how the company plans to use it — aside from pipeline work.
Orchard Therapeutics’ executive crew includes co-founder Andrea Spezzi, one of a group of ex-GSK staffers with close ties to Strimvelis, a pioneering gene therapy that was a key part of the GSK deal. After shopping the group for months — with Orchard figuring prominently in the rumors circulating around the deal — the GSK team ended up virtually giving it away in exchange largely for a chunk of equity, underscoring their inability to create much value in the effort.
Aside from Strimvelis, the ex vivo gene therapy for “bubble boy syndrome,” the deal basket also included two late-stage clinical programs for metachromatic leukodystrophy and Wiskott Aldrich syndrome, one clinical program for beta thalassemia, and rights to three preclinical programs. In exchange, GSK grabbed a 19.9% stake and a board seat in the UK biotech.
GSK has slimmed down the pipeline in preparation for a change of research direction under new R&D chief Hal Barron, but Barron has done little in the 9 months since his appointment to spell out what that actually means.
The full syndicate at Orchard is a big one. It includes: RA Capital Management, Venrock, Foresite Capital, Perceptive Advisors, Cormorant Asset Management LP, ArrowMark Partners, Sphera Global Healthcare, Medison Ventures, Driehaus Capital Management and Ghost Tree Capital Group. Existing investors came along for the ride, including Temasek, Baillie Gifford, RTW Investments, LP, Cowen Healthcare Investments and Agent Capital.