- Gene therapy developer Avrobio will sell one of its three clinical-stage treatments to Novartis for $87.5 million, swapping an asset for cash it will use to extend its operating runway by at least another six months.
- The deal, announced by Avrobio Monday, will hand Novartis a treatment for cystinosis, an uncommon genetic condition caused by the toxic buildup of the amino acid cystine. Novartis will also receive from Avrobio an exclusive license to other assets and intellectual property related to the experimental drug.
- For Novartis, the deal adds to a pipeline of gene therapies led by the marketed treatments Zolgensma and Luxturna. The Swiss pharmaceutical company has recently expanded to its presence in the field via deals with Voyager Therapeutics and Gyroscope Therapeutics.
The cash from Novartis will help Avrobio keep the lights on for longer, pushing out its operating runway to the fourth quarter of next year — valuable flexibility in a market that remains challenging for smaller, loss-generating biotechnology companies like Avrobio.
Selling the cystinosis treatment puts Avrobio’s focus more squarely on its other clinical-stage gene therapies for the lysosomal storage disorders Gaucher and Hunter. The company also has a preclinical research program for Pompe disease.
“This transaction strengthens Avrobio’s balance sheet, focuses our pipeline strategy and is a strong endorsement of our [hematopoietic stem cell] gene therapy approach and plato gene therapy platform,” said Erik Ostrowski, the company’s CFO and interim CEO.
Ostrowski was appointed into the latter role at the beginning of May, when Avrobio’s founder and longtime chief executive Geoff Mackay stepped down to join an “emerging early-stage company.”
The leadership transition occurred a little more than one year after Avrobio chose to stop work on a gene therapy for another lysosomal storage disorder called Fabry after disappointing clinical trial results.
The cystinosis treatment being acquired by Novartis is currently in Phase 1/2 testing and recently released data that showed signs it may being working as intended.
Shares in Avrobio, which had sunk below $1 in value, rose by nearly 80% Monday morning, reflecting the anticipated influx of cash from the deal.