Biogen ventures into ophthalmology with $1-bn AGTC tie-up

US biotechnology giant Biogen Inc is entering ophthalmology by striking a deal with Applied Genetic Technologies Corp (ATGC), to develop gene-based therapies for a number of eye diseases.

The collaboration will focus on the development of a portfolio of AGTC's therapeutic programmes for orphan diseases of the retina that can lead to blindness in children and adults, according to a joint statement by the companies.

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 licence agreement for manufacturing rights.

Under the partnership, AGTC will be paid upfront and milestone payments of over $1 billion which include $472.5 million for its two lead programmes, besides annual sales-based royalties.

Further, payments of up to $592.5 million will be made by Biogen across AGTC's discovery programmes along with royalties.

Biogen will pay $124 million upfront to AGTC, including $30 million equity investment in the company at $20.63 per share.

Biogen's senior vice president Olivier Danos said: ''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,''

''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 localised, selective delivery of gene-based therapies,'' Danos further stated.

Florida-based AGTC is a clinical stage biotechnology company that uses gene therapy to develop treatments for a variety of eye diseases, with its lead products focusing on inherited eye diseases such as x-linked retinoschisis (XLRS), achromatopsia and x-linked retinitis pigmentosa (XLRP).

These are caused by mutations in single genes that affect visual function and currently lack effective medical treatments.

XLRS is a disease affecting young teenage males that 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.

Gene therapy is an evolving field of medicine in which faulty genes are corrected in cells using a vector, a biological delivery mechanism, which is used to transport genetic information into diseased cells within the body.

Adeno-associated virus  (AAV) vectors have emerged as an attractive approach for gene therapy since they can deliver the genes for therapeutic proteins to accessible tissues in the body. Several AAV gene therapy products are in late-stage clinical development, and one product is approved in the EU.

''We expect this collaboration will further validate our novel 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,'' Sue Washer, president and CEO of AGTC commented.

Biogen will get worldwide manufacturing rights for both XLRS and XLRP programmes, while AGTC will lead the clinical development programmes of XLRS through product approval and of XLRP through the completion of first-in-human trials.

The transaction is subject to customary closing conditions, and is expected to close in the third calendar quarter of 2015.

Massachusetts-based Biogen, founded in 1978, is one of the world's oldest biotechnology companies focusing on treatment of neurodegenerative diseases, hematologic conditions and autoimmune disorders and its leading therapies include multiple sclerosis and hemophilia.

The biotech giant is also pursuing partnership programmes on non-ophthalmic gene therapy for the treatment of sickle cell disease, blood disorders, beta thalassemia etc.