Gene therapy player Regenxbio $RGNX has struck a deal to buy the struggling Dimension Therapeutics $DMTX after a setback in the clinic earlier this year brutally hammered the biotech’s market cap down to only $30 million.
Regenxbio has agreed to buy out Dimension for $3.41 a share, all in stock and close to three times yesterday’s $1.20 close. The deal values the company at about $86 million, just a fraction of what it was worth two years ago when Dimension priced its IPO shares at $13. In return, Regenxbio gets a slate of new programs for its own pipeline which it is already intimately familiar with, as they use its delivery vector under one of a lineup of licensing deals the company set up as gene therapy began to take off a few years ago.
Dimension shares shot up 158% on Friday as investors caught up with the buyout price.
Dimension got started as one of those new-wave gene therapy developers, helmed by Annalisa Jenkins after the Bristol-Myers vet left the lead R&D role at Merck KGaA. But earlier in the year Dimension’s lead drug looked weak in fighting hemophilia B, while rivals were surging forward, crushing its share price and leaving the small developer looking to find a survival plan.
That lead therapy — DTX-101 — is out of the picture for Regenxbio. It’s plucking two early-stage gene therapy drugs out of the Dimension pipeline in the deal. DTX301 is designed to treat ornithine transcarbamylase (OTC), using a vector to deliver the OTC gene to the liver. And the preclinical DTX401 delivers a copy of the glucose-6-phosphatase (G6Pase) gene to liver cells for glycogen storage disease type Ia.
Regenxbio also gets DTX201 for the treatment of hemophilia A, partnered with Bayer. And a set of three more preclinical phenylketonuria, Wilson disease and citrullinemia type I.
Regenxbio has been closely allied with James Wilson, the gene therapy pioneer who provided much of the IP they use in their delivery vector.
“This acquisition confirms Regenxbio’s leadership in the field of AAV gene therapy and expands our pipeline in metabolic diseases using NAV Technology with a clinical asset and several preclinical assets. Regenxbio has the resources and expertise to be successful in advancing a portfolio of gene therapies for inherited metabolic diseases targeting the liver,” said Regenxbio CEO Kenneth Mills in a prepared statement. “We believe that DTX301 and DTX401 are product candidates that address diseases with high unmet need and will become an important part of a strong internal pipeline at Regenxbio that has the potential to achieve multiple milestones through the end of 2018, starting with our interim updates anticipated for the end of this year on RGX-314 for wet AMD and RGX-501 for HoFH. The acquisition of Dimension is another meaningful step in building a robust clinical pipeline of gene therapy product candidates with the goal of improving treatment options for patients and families in many diseases.”
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