Freeline Therapeutics, a U.K.-headquartered developer of gene therapies, has agreed to be taken private in a deal with British investment firm Syncona, the companies announced Tuesday.
Syncona, which already owned more than half of Freeline, will pay $6.50 per American Depositary Share of the biotechnology company, a price 30% higher than what it offered one month ago. The deal values Freeline’s issued share capital at about $28 million.
“We conducted a thorough exploration and review of our financing and strategic alternatives, taking into account our need for further funding to enable operations to continue beyond the near term,” said Julia Gregory, an independent director on Freeline’s board, in a statement. Gregory led the special committee overseeing Freeline’s business review.
The deal follows a year of cuts for Freeline, which sold a subsidiary and laid off staff last November and then reduced its workforce by a further 30% in April. The company halted work on gene therapies for hemophilia and for Fabry disease as a result.
Left over was a gene therapy for Gaucher disease, a rare inherited condition that causes liver, bone and blood abnormalities. In late October, the company disclosed data from the first two patients treated with the therapy, dubbed FLT201, in an early-stage study.
“Given the compelling data that we have seen from the first two patients treated with FLT201, we are committed to advancing FLT201 as expeditiously as possible,” said Michael Parini, Freeline’s CEO, in a statement. “[W]e believe we will be better positioned to do that as a privately held, Syncona-backed company than we could by continuing as a publicly traded company in the current environment.”
Syncona has done this before; taking the gene therapy biotech Applied Genetic Technologies Corp. private last fall in a similarly sized deal. The investment firm later launched a startup called Beacon Therapeutics that incorporated some of AGTC’s assets.
Gene therapy companies have been vulnerable to this year’s market downturn in biotech. At least a dozen developers of genetic medicines have laid off staff so far this year, according to BioPharma Dive data, joining more than 100 other biotechs forced to do the same.
Freeline and Syncona expect their deal to close in the first quarter next year. It’s conditional on the approval of at least 75% of shareholders present at two future meetings and the agreement of U.K. courts.
Syncona is also extending a convertible loan of up to $15 million to Freeline, which plans to use the money to advance its Gaucher study and conduct research related to Parkinson’s disease.