Sanofi’s scope in genetic medicines is expanding to muscle disorders through a new alliance with a preclinical biotech startup. The pharmaceutical giant is also bringing a key piece for the RNA therapy that partners will develop together for a particular form of muscular dystrophy.

Under the terms of the agreement announced Tuesday, Sanofi will collaborate with miRecule, a Gaithersburg, Maryland-based startup that develops RNA therapies that target and fix a genetic abnormality that causes disease. The alliance covers miRecule’s drug candidate for facioscapulohumeral muscular dystrophy (FSHD), the second most common type of muscular dystrophy. The disease has no FDA-approved therapies.

MiRecule’s technology identifies targets for RNA drugs by analyzing gene sequencing profiles and clinical outcomes from hundreds of patients. Those targets are screened to find the best RNA therapeutic for a subset of patients. The therapies use an antibody to direct RNA to target tissues. The combination of the molecules creates what miRecule calls antibody-RNA conjugates, or ARCs.

FSHD is caused by abnormal expression of the DUX4 protein, which leads to progressive muscle weakness that primarily affects the face, shoulders, and upper arms. The miRecule FSHD program, code-named MC-DX4, is designed to use RNA to eliminate the expression of the DUX4 gene, thereby addressing the underlying cause of FSHD in muscle tissue. The new alliance will pair miRecule’s FSHD drug candidate with an antibody from Sanofi’s proprietary antibody platform.

The agreement gives Sanofi an exclusive license to miRecule’s FSHD therapy. The two companies will collaborate on research through the selection of a lead therapeutic candidate. After that, Sanofi takes over responsibility for the preclinical work to bring the therapy into human testing and subsequent clinical development. Sanofi will also handle commercialization of the product if it secures regulatory approval.

MiRecule is in line to receive an upfront payment and near-term milestone payments that could top $30 million combined, according to the agreement. Milestone payments could bring the biotech nearly $400 million, plus royalties from sales of an approved product.

“We look forward to working with miRecule to bring together our two groundbreaking technologies synergizing in a best-in-class therapy designed to suppress the underlying cause of FSHD. We hope that this will enable patients to live a life free from the debilitating symptoms of the disorder,” Pablo Sardi, Sanofi’s global head of rare and neurologic diseases research said in a statement. “We are excited to embark on this collaboration with miRecule as we work together to bring hope to the FSHD community.”

Sanofi’s RNA moves in the past year have focused mainly on messenger RNA. Last year, the pharmaceutical giant paid formed a new mRNA vaccines unit to expand applications of mRNA beyond Covid-19 vaccines. Months later, Sanofi paid $3.2 billion to acquire mRNA biotech Translate Bio. The $160 million acquisition of startup Tidal Therapeutics brought technology for developing mRNA vaccines for cancer. Sanofi also has an RNA interference therapy in its pipeline through an alliance with Alnylam Pharmaceuticals. That partnered therapeutic candidate, fitusiran, is being developed as a treatment for  hemophilia A and B.

MiRecule started in 2019, supported by the patient and academic communities as well as a grant from the National Institute of Neurological Disorders and Stroke. In addition to muscular dystrophy, miRecule is applying its technology to cancer. The biotech’s most advanced cancer program, MC-30, is in preclinical development for head and neck cancer. That RNA therapy is designed to correct a genetic mutation that leads to resistance to currently available cancer therapies.

Photo: Nathan Laine/Bloomberg, via Getty Images

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Gene therapy developer Rocket Pharmaceuticals is on track to seek FDA approval for its lead program but it’s also taking care to keep its pipeline stocked. The company has agreed to acquisition of Renovacor, a biotech developing a gene therapy for a genetically driven form of heart failure.

According to financial terms announced Tuesday, the all-stock deal represents an equity value of $53 million, or an implied value of $2.60 for each Renovacor share. That’s a 36.8% premium over the closing price of Renovacor’s closing stock price on Monday but a steep drop from a year ago, when the company went public via a SPAC merger and saw its shares new shares trade on the New York Stock Exchange for more than $10 apiece.

Cambridge, Massachusetts-based Renovacor develops gene therapies for genetically driven cardiovascular diseases. The company emerged in 2019 with an $11 million Series A round of financing for preclinical development of a gene therapy that addresses BLCL2-associated athanogene 3 (BAG3) mutations that lead to dilated cardiomyopathy, a severe form of heart failure. Renovacor was founded by Arthur Feldman, a cardiologist and professor of medicine at Temple University.

Lead Renovacor program REN-001 uses an adeno-associated virus (AAV) to deliver to cells a healthy version of the BAG3 gene. In preclinical testing, Renovacor said its gene therapy led to the production of functional BAG3 protein and improvement in cardiac function. Human testing is the next step. The company has said it expects to submit an investigational new drug application in the second half of this year to support a Phase 1/2 clinical trial. The Renovacor pipeline includes discovery-stage gene therapies addressing BAG3 mutations as well as the expression and function of that gene. The company has also expanded its research to include genetically driven arrhythmogenic cardiomyopathy.

“The acquisition of Renovacor aligns with our strategy to expand our leadership position in AAV-based gene therapy for cardiac disease and gives us a perfect opportunity to continue on our mission to transform the lives of heart failure patients through the power of gene therapy,” Rocket CEO Gaurav Shah said in a prepared statement.

Rocket’s cardiac gene therapy research focuses on Danon disease, a weakening of the heart muscle caused by mutations to the LAMP2 gene. The Cranbury, New Jersey-based company’s Danon program, RP-A501, is currently in Phase 1 testing. In a research note sent to investors, William Blair analyst Raju Prasad said the prevalence of BAG3-associated dilated cardiomyopathy is estimated to be as high as 30,000 patients in the U.S., a figure that is expected to grow with more genetic testing and disease awareness. He added that Renovacor brings synergies to Rocket, as both companies are using AAV-9 vectors to pursue genetically defined targets.

Rocket’s most advanced program, RP-L201, has reached pivotal Phase 2 testing for leukocyte adhesion deficiency-1 (LAD-1), a rare disorder caused by mutations to the gene that encodes CD18, a protein that helps white blood cells stick to blood vessels. Children born with LAD-1 are susceptible to fungal and bacterial infections that can become life-threatening. In May, Rocket reported data showing 100% survival in seven patients 12 months after infusion with the gene therapy. In its report of second quarter 2022 financial results last month, Rocket said it expects to file an application seeking FDA approval of its LAD-1 gene therapy in the first half of 2023.

The boards of directors of both Rocket and Renovacor have approved the acquisition, but approval by shareholders of both companies is still needed. The deal is expected to close by the first quarter of next year.

Photo: BrianAJackson, Getty Images

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Genfit has a drug candidate on track toward clinical testing for a rapidly progressing and potentially fatal complication of chronic liver disease. By acquiring Versantis, it adds another drug that works in a different way and is further along in development for the same disorder.

Lille, France-based Genfit announced Monday that it has agreed to pay 40 million Swiss francs (about $41.4 million) to buy Versantis, a privately held Swiss biotech focused on developing liver disease drugs. In addition to the upfront payment, Versantis shareholders could earn up to 65 million Swiss francs (about $67.3 million) tied to clinical trial progress and regulatory approval of its lead asset.

The lead disease target of Zurich, Switzerland-based Versantis is acute-on-chronic liver failure (ACLF), a syndrome that can develop in patients whose chronic liver disease has progressed to cirrhosis. In addition to liver failure, this condition can lead to the failure of other organs such as the brain, kidneys, heart, and lungs. ACLF can rapidly progress to a coma and then death. According to Genfit, an estimated 137,000 patients are hospitalized with ACLF in the U.S. each year. The condition has no FDA-approved therapies.

The most advanced Versantis program, VS-01, employs liposomes, which are tiny, spherical vesicles that can be used as transport vehicles. The company says its drug clears toxic metabolites from the body, extracting them from the blood and taking them into the abdominal cavity, where they are taken up by liposomes that are then drained from the body. In a Phase 1b study, Versantis reported that its drug was safe and well tolerated by the 12 study participants, who experienced no dose-limiting toxicities. A 60-patient Phase 2 test is set to begin in the fourth quarter of this year. In addition to ACLF, the drug has potential application as a treatment of urea cycle disorder. The FDA has granted the drug a rare pediatric disease designation in this indication. In Europe, the Versantis drug candidate has orphan drug designation.

Genfit’s approach to developing an ACLF therapy involves repurposing nitazoxanide, or NTZ for short. This older drug is used to treat diarrhea and intestinal inflammation caused by parasites. Genfit is looking to apply the drug to liver and fibrotic diseases. The company said a meeting with the FDA is scheduled to discuss clinical trial plans for NTZ in ACLF following encouraging Phase 1 data that informs potential dose adjustments in patients with cirrhosis and liver impairment.

The Versantis acquisition is consistent with the liver disease focus that Genfit said it would maintain following the high-profile 2020 Phase 3 failure of elafibranor, a drug that the biotech was developing for the fatty liver disease non-alcoholic steatohepatitis (NASH). The company abandoned its pursuit of the drug for NASH, but restructured and focused development of the small molecule in primary biliary cholangitis, a different rare liver disorder. Late last year, Genfit licensed elafibranor’s global rights to Ipsen for €120 million up front. According to the licensing agreement, Genfit is still responsible for Phase 3 development of elafibranor until completion of that study’s double-blind treatment period.

Speaking on a conference call Monday, Genfit CEO Pascal Prigent said that the Versantis acquisition is a logical continuation of the rare liver diseases corporate strategy that the company started at the end of 2020. The Ipsen deal provided Genfit with cash to finance acquisitions, with an eye on assets that are in the clinic or close to clinical development. The Versantis acquisition brings Genfit programs for other liver disorders. VS-02 is in preclinical development for the treatment of chronic hepatic encephalopathy, a nervous system disorder triggered by advanced chronic liver disease. Versantis is also developing TS-01, a point-of-care diagnostic in development for at-home measurement of ammonia in the blood, which is the primary cause of hepatic encephalopathy.

“We believe Versantis’s portfolio of programs gives us exactly what we are looking for,” Prigent said. “After the acquisition, Genfit will have multiple promising programs in rare liver diseases, and will be a global leader in ACLF, a therapeutic area that we feel is both important and underserved.”

The acquisition agreement could yield more cash from the sale of an FDA priority review voucher. Under this FDA program, regulatory approval of a drug for a rare disease can lead to the award of a voucher that grants speedy review of another rare disease drug. This program is intended to incentivize rare disease drug development and the rare pediatric disease designation granted to VS-01 in urea cycle disorder makes it eligible for a voucher if the drug is approved.

A company awarded a voucher can apply it toward one of its own drugs, but many companies opt to sell these vouchers, fetching prices of $100 million or more. Under the acquisition agreement, Versantis is eligible to receive one third of the net proceeds from the sale of a voucher. If Genfit decides to use the voucher for one if its own programs, Versantis would be entitled to one third of the fair market value of the voucher.

Genfit expects to close the Versantis acquisition in the fourth quarter of this year.

Photo: eranicle, Getty Images

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Pfizer has reached a $5.4 billion deal to buy Global Blood Therapeutics, a company with one commercialized therapy for sickle cell disease and a pipeline of additional drugs in various stages of development for the blood disorder.

According to financial terms announced Monday, Pfizer is paying $68.50 for each share of Global Blood, which represents a 7.2% premium to Friday’s closing price and a more than 100% premium to the biotech’s stock price a week ago, before speculation about Pfizer acquisition started circulating. The Wall Street Journal reported last Friday that Pfizer was in advanced talks to buy South San Francisco-based Global Blood.

Global Blood’s drug Oxbryta, is one of the few FDA-approved treatments for sickle cell disease, and the only one that addresses a root cause of the disorder. The inherited condition leads hemoglobin, the oxygen-carrying protein in red blood cells, to become rigid and misshapen, which in turn makes the normally round and flexible red blood cell rigid, taking on a sickle shape. These rigid blood cells clog and impede blood flow and the delivery of oxygen to tissues. Complications include vaso-occlusive crisis (VOC), in which the blocked blood flow and oxygen deprivation sets off an inflammatory response from the body.

Oxbryta is a small molecule designed to bind to hemoglobin and block polymerization, the process in which hemoglobin inside red blood cells clump together leading the cell to take on a sickle shape. The FDA approved the drug in 2019. It accounted for $194.7 million in revenue in 2021, according to Global Blood’s annual report. In the first half of 2022, the company reported $126.7 million in Oxbryta sales, a 46.3% increase compared to the first half of last year.

Oxbryta, a once-daily pill, is a chronic treatment taken potentially for the patient’s entire life. The drug could eventually face competition from one-time treatments in the form of genetic medicines in clinical development by Bluebird Bio, Sangamo Therapeutics, and Vertex Pharmaceuticals. But in the meantime, Global Blood is developing a next-generation version of Oxbryta, code-named GBT601. This small molecule, which comes from Global Blood’s labs, is designed to work the same way as Oxbryta, but with potentially greater efficacy at a much lower dose.

Global Blood has advanced GBT601 to the Phase 2 part of a Phase 2/3 clinical trial. The most advanced program in the pipeline is a polymerization-blocking drug called inclacumab. This monoclonal antibody is designed to target P-selectin, a protein that is known to reduce the incidence of VOC. That Global Blood drug, licensed from Roche in 2018, is currently in Phase 3 testing. Dealmaking has brought Global Blood additional drug candidates for sickle cell disease. A 2019 partnership with Syros Pharmaceutical covers the development of small molecule drugs that boost the production of fetal hemoglobin. This approach, which is still preclinical, is intended to dilute the concentration of the form of hemoglobin that leads to sickle cell disease, offering a potential cure. Last year, the company committed up to $353 million for the rights to two Sanofi small molecules in preclinical development.

Though sickle cell disease is relatively rare in the developed world, Pfizer estimates that there are about 4.5 million people globally who have the disorder and more than 45 million people who carry the sickle cell trait. The disorder disproportionately affects those with sub-Saharan African ancestry, though it can also occur in other ethnic groups. In addition to its U.S. approval, Oxbryta has regulatory nods in the European Union, United Arab Emirates, Oman, and Great Britain. Pfizer said it plans to use its global footprint to accelerate distribution of Global Blood’s drug to parts of the world most affected by the disorder. If the other drugs in Global Blood’s pipeline reach the market, Pfizer estimates that combined with Oxbryta, they could achieve peak sales topping $3 billion.

“The deep market knowledge and scientific and clinical capabilities we have built over three decades in rare hematology will enable us to accelerate innovation for the sickle cell disease community and bring these treatments to patients as quickly as possible,” Albert Bourla, Pfizer’s chairman and CEO, said in a prepared statement.

Pfizer’s Global Blood acquisition agreement follows misses in the pharmaceutical giant’s earlier efforts to address sickle cell disease. Two years ago, Pfizer ended a partnership with GlycoMimetics on the drug rivipansel. That drug, which was in development for treating the VOC complication of sickle cell disease, failed its Phase 3 study. Early this year, Pfizer terminated a Phase 1 test of PF-07059013, another small molecule that was in development for the disorder. The pharma giant said that the drug did not demonstrate sufficient pharmacological effect.

The Pfizer and Global Blood boards of directors have both approved the acquisition, which the Wall Street Journal reported was a competitive process that drew interest from other potential buyers. The merger agreement bars Global Blood from seeking another bid, but permits the company to discuss and negotiate with a party that approaches with a higher offer. If Global Blood decides to take that offer, it would owe Pfizer a $217 million termination fee. But if the merger agreement is terminated for certain antitrust reasons, Pfizer must pay Global Blood a “reverse termination fee” of $326 million.

In a research note sent to investors, William Blair analyst Raju Prasad wrote that his firm does not expect the Federal Trade Commission will have any major issues with the acquisition given the rarity of sickle cell disease and its lack of treatment options.

Photo: Dominick Reuter/AFP, via Getty Images

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Bausch + Lomb’s $630 million IPO was the biggest one in the second quarter of this year. It was also an outlier. The steep drop off in IPO activity continued in the most recent quarter, which saw the number of completed new stock offerings dip to levels last seen in the Great Recession of the late 2000s.

The 21 IPOs that raised $2.1 billion in the second quarter made it the slowest second quarter for IPOs since 2009, according to a new report from IPO research firm Renaissance Capital. By comparison, the second quarter of last year tallied 118 newly public companies that raised $40.7 billion. It turned out to be the peak. IPOs dipped in the third and fourth quarters of last year. In the first quarter of this year, activity plummeted to just 18 IPOs. Renaissance said factors holding new IPOs in check include recession fears and record inflation.

“New issuers are still waiting for better conditions, and meaningful IPO activity is unlikely to resume until returns improve,” Renaissance said in the report.

The large life science IPOs in the second quarter are exceptions. Bausch + Lomb is a well-known brand with a broad portfolio of eyecare products commercialized around the world. It’s also no stranger to the public markets. Bausch + Lomb traded on the New York Stock Exchange for nearly 50 years until it was acquired by private equity firms in 2007. HilleVax raised $200 million from its IPO. While the vaccine developer is not as well known as Bausch + Lomb, it spun out of pharmaceutical giant Takeda Pharmaceutical with a norovirus vaccine candidate that has already successfully demonstrated proof of concept in Phase 2 testing in adults. Both companies are less risky investment bets compared to some of early-stage companies that have been trying to go public.

HilleVax priced shares at the midpoint of its targeted price range, and the company was able to boost the deal size by offering more shares. However, Bausch + Lomb’s strong balance sheet and growing business were not enough to offset the dampening effects of the financial markets. The company priced its IPO at $18 per share, well below the $21 to $24 per share range that the company had set. PepGen, a biotech in early-stage clinical development, was able to raise $108 million from its IPO. But the genetic medicines delivery company priced its stock offering below the targeted price range so it needed to sell more shares to top the $100 million mark.

A year ago, an IPO topping $100 million was common. In the second quarter, just six IPOs crossed that threshold. The median deal size in the second quarter was $22 million, which Renaissance said marked a multi-decade low. The firm calculated that just 25% of newly public companies finished the second quarter above their IPO prices. Shares of Bausch + Lomb, HilleVax, and PepGen are all trading below their offering prices.

Financial conditions continue to hold down new efforts to go public. New filings have sunk to a six-year low, Renaissance said. The pipeline of companies that have already filed remains full, even if it’s not moving much. In some cases, companies are postponing IPO plans indefinitely. Bausch Health Companies, the firm that had acquired Bausch + Lomb and adapted its name before spinning out the eyecare business, had also planned to spin off the skincare business named Solta Medical. Last month, Bausch Health said it was suspending the Solta IPO, citing the challenging market conditions. SPAC deals are not doing any better. Though such deals were hot in 2021, Renaissance counted just 15 blank check IPOs and 19 merger completions in the second quarter.

The sluggish financial conditions are leading some publicly traded companies to pursue alternative financial strategies. Radius Health is going private via a buyout by two private equity firms. In explaining the rationale for the deal, company executives cited the rough markets, particularly for biotech companies. Blueprint Medicines found a way to raise money without tapping the financial markets. Last week, the company agreed to sign over some of the royalties it’s owed for two cancer drugs in exchange for $575 million upon the close of the deals. In the years to come, these financing agreements could bring Blueprint up to $1.25 billion in total capital.

Photo: Angela Weiss/AFP, via Getty Images

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