Biogen Inc. will pay Applied Genetic Technologies Corp. $124
million for license and commercialization rights to several of its
gene-based therapies.
Shares of AGTC increased by 17% in recent trading. Shares of
Biogen were relatively flat.
The $124 million includes a $30 million equity investment at a
price of $20.63 a share. Biogen also has the option to license
discovery programs for three additional indications.
AGTC is eligible to receive milestone payments totaling more
than $1 billion. This includes up to $472.5 million for the two
lead programs and most of the rest coming from payments for the
potential discovery programs.
The two lead programs covered in the agreement are a clinical
candidate for a disease called X-linked Retinoschisis and a
preclinical treatment for X-Linked Retinitis Pigmentosa. These are
diseases of the retina that can cause blindness in men.
AGTC Chief Executive Sue Washer said the collaboration would
"support the development of new therapies that may allow for
transformative treatments for these rare inherited eye
diseases."
Alachua, Fla-based AGTC specializes in developing gene-therapy
treatments for eye disease. Gene therapy is still a new field. The
most common form of the treatment takes healthy DNA, packages it
within a vector—a biological delivery mechanism—and then delivers
the vector into the body to replace diseased genes with the healthy
DNA.
Massachusetts-based Biogen has been in search of new products to
drive sales growth following the successful 2013 launch of its
multiple-sclerosis therapy Tecfidera. In its latest quarter,
slowing growth of Tecfidera led to lower-than-expected profit and
revenue growth.
Shares of Biogen have increased about 19% this year through
Wednesday's close.
The deal is expected to close in the third quarter.
Write to Angela Chen at angela.chen@dowjones.com
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