Precision, Novartis Ink Potential $1.4B Development Deal
Durham-based Precision Biosciences’ genome editing technology has drawn interest – and investment – from another global pharmaceutical giant. This time it’s Novartis.
The two companies have announced an exclusive worldwide in vivo gene editing research and development collaboration and license agreement.
Precision (Nasdaq: DTIL) is a clinical stage gene editing company using a proprietary system called ARCUS to create gene editing therapies. Precision was spun out of Duke University in 2006 and went public in March 2009.
As part of the agreement, Precision will develop a custom ARCUS nuclease that will be designed to insert, in vivo, a therapeutic transgene at a “safe harbor” location in the genome as a potential one-time transformative treatment option for diseases including certain hemoglobinopathies such as sickle cell disease and beta thalassemia.
Precision will receive an upfront payment of $75 million and is eligible to receive up to an aggregate amount of approximately $1.4 billion in additional payments for future milestones. Precision is also eligible to receive certain research funding and, should Novartis successfully commercialize a therapy from the collaboration, tiered royalties ranging from the mid-single digits to low-double digits on product sales.
In late 2020 Precision entered a collaboration and exclusive license agreement that could potentially be worth over $2.7 billion with Indianapolis-based Eli Lilly, which is now building two pharmaceutical manufacturing plants in North Carolina. Lilly will use Precision’s proprietary ARCUS genome editing platform to research and develop therapies for genetic disorders. It will start with Duchenne muscular dystrophy (DMD) and two other undisclosed gene targets.
Under the terms of that agreement, Precision was to receive an upfront cash payment of $100 million and an equity investment by Lilly of $35 million in Precision’s common stock. Precision also is eligible to receive up to $420 million in development and commercialization milestone payments for each of three additional products, along with tiered royalties, if Lilly is successful in launching a new therapy.
Under the terms of the Novartis agreement, Precision will develop an ARCUS nuclease and conduct in vitro characterization, with Novartis then assuming responsibility for all subsequent research, development, manufacturing and commercialization activities. Novartis will receive an exclusive license to the custom ARCUS nuclease developed by Precision for Novartis to further develop as a potential in vivo treatment option for sickle cell disease and beta thalassemia
“We are excited to collaborate with Novartis to bring together the precision and versatility of ARCUS genome editing with Novartis’ gene therapy expertise and commitment to developing one-time, potentially transformative treatment for hard-to-treat inherited blood disorders,” said Precision CEO Michael Amoroso. “This collaboration will build on the unique gene insertion capabilities of ARCUS and illustrates its utility as a premium genome editing platform for potential in vivo drug development. With this agreement, Precision, either alone or with world-class partners, will have active in vivo gene editing programs for targeted gene insertion and gene deletions in hematopoietic stem cells, liver, muscle and the central nervous system showcasing the distinctive versatility of ARCUS.”
Jay Bradner, president of the Novartis Institutes for Biomedical Research (NIBR), the Novartis innovation engine, said, “We identify here a collaborative opportunity to imagine a unique therapeutic option for patients with hemoglobinopathies, such as sickle cell disease and beta thalassemia – a potential one-time treatment administered directly to the patient that would overcome many of the hurdles present today with other therapeutic technologies. We look forward to working with Precision and leveraging the ARCUS technology platform, which could bring a differentiated approach to the treatment of patients with hemoglobinopathies."
The companies obviously believe Precision is onto something significant.
“The in vivo gene editing approach that we are pursuing for sickle cell disease could have a number of significant advantages over other ex vivo gene therapies currently in development,” said Derek Jantz, Ph.D., chief scientific officer and co-founder of Precision. “Perhaps most importantly, it could open the door to treating patients in geographies where stem cell transplant is not a realistic option. We believe that the unique characteristics of the ARCUS platform, particularly its ability to target gene insertion with high efficiency, make it the ideal choice for this project, and we look forward to working with our partners at Novartis to bring this novel therapy to patients.”
Upon completion of the transaction, Precision expects that existing cash and cash equivalents, expected operational receipts, and available credit will be sufficient to fund its operating expenses and capital expenditure requirements into Q2 2024.
Last September Precision also announced an agreement with iECURE, an emerging in vivo gene editing company focused on curing devastating diseases with high unmet need. They did not disclose financial terms of that agreement. iECURE was co-founded by University of Pennsylvania gene therapy pioneer James M. Wilson, M.D., Ph.D. The Penn spinout works in close partnership with the school’s Gene Therapy Program.