- Axovant Sciences has inked an exclusive deal for rights to AXO-Lenti-PD, Oxford BioMedica's Parkinson's disease gene therapy. The move appeared to delight Axovant shareholders, as its stock value climbed 160% by market's close Wednesday.
- In return for $30 million cash, Axovant gets rights to the therapy, as well as its predecessor product ProSavin. Oxford BioMedica will remain the clinical and commercial supplier for AXO-Lenti-PD, and $5 million of the cash will be a credit against Oxford BioMedica's process development and clinical supply. The seller could also receive milestone payments of over $812 million, as well as tiered royalties.
- Supporting the deal is $25 million in equity financing from Axovant's parent company Roivant Sciences, which now owns around 73% of the subsidiary. Axovant plans to conduct a Phase 1/2 dose escalation study of AXO-Lenti-PD in patients with advanced Parkinson’s disease by the end of 2018.
Axovant is trying to pick itself up after two clinical trial crashes led to the cancelation of its Phase 3 dementia drug, intepirdine — dramatically pushing down shares. The company then kicked off a restructuring that included cutting its staff by almost half.
After the the intepirdine program fizzled, Axovant was left with just two products in its pipeline: nelotanserin, a 5HT2A inverse agonist in development for REM sleep disorder in patients with Parkinson's disease and dementia with Lewy bodies (DLB), and RVT-104, a combination of rivastigmine and a peripherally active muscarinic receptor antagonist for Alzheimer's disease and DLB.
Despite the slim pickings, Axovant has shown it can still attract high-end talent. And with its latest deal, the biotech has started rebuilding its depleted pipeline.
AXO-Lenti-PD delivers three genes encoding enzymes required for dopamine synthesis in the brain. To support the move into gene therapy, Fraser Wright, co-founder and former chief technology officer at Spark Therapeutics, will join Axovant as CTO for gene therapy programs.
Michael Yee, an equity analyst at Jefferies, wrote to investors that the licensing agreement is "an important turning point in the company's trajectory," and a "clear positive shift in the company's focus to the exciting and promising area of gene therapy."
He did sound several notes of caution, however. The gene therapy program at the center of the deal has already been around for many years, and a previous Phase 1/2 study wasn't placebo-controlled. What's more, it's unclear if recent tweaks aimed at making AXO-Lenti-PD more safe and effective will pan out in the clinic.
The new pipeline addition, while adding diversification, also doesn't help Axovant's near-term prospects for a commercialized product. Nelotanserin has a couple trials slated for completion in the next year or so, but they're in Phase 2. Yee acknowledged that initial data from the Phase 1/2 study of AXO-Lenti-PD likely won't come until late 2019 at the earliest.
"We will continue to pursue promising new therapeutic approaches based on transformative science, and will further expand our pipeline with high-quality assets like AXO-Lenti-PD," Axovant CEO Pavan Cheruvu said in a June 6 statement. "This is part of our long-term goal of building Axovant into a leader in the development and commercialization of innovative new medicines for neurological indications."
Oxford BioMedica also saw an uptick of around 18% on the London Stock Exchange, with CEO John Dawson describing the deal as a validation of his company's LentiVector-enabled platform and product development strategy, as well as a demonstration of Oxford BioMedica’s partnering strategy.