- Things have been changing rapidly in the gene therapy M&A world. Following the August announcement that Regenxbio Inc. would be acquiring Dimension Therapeutics, Inc. in an all-stock deal, the Dimension board of directors announced Monday that it received an unsolicited "superior" proposal from Ultragenyx Pharmaceutical Inc.
- As of Tuesday morning, Ultragenyx will acquire Dimension for $6.00 per share, or approximately $151 million. The deal is significantly higher than Regenxbio's agreed offer of approximately $3.41 per share, based on the closing stock price for Regenxbio on August 24, 2017.
- Regenxbio will not match this offer, and the Dimension board has recommended the Ultragenyx deal to its shareholders. Ultragenyx will pay a $2.85 million termination fee to Regenxbio, as per the original agreement.
In August, Regenxbio thought it had everything tied up – a deal that would make its partner Dimension Therapeutics a wholly-owned subsidiary, with Dimension shareholders owning around 11% of the shared entity. Regenxbio would be able to fill out its pipeline with Dimension assets based on Regenxbio vectors.
But things changed quickly this week as a new, better offer emerged.
"While the strategic rationale for a combination with Dimension is compelling, we believe our offer represented fair value and prudently enabled both companies’ shareholders to participate in the upside of the combined company," said Ken Mills, Regenxbio president and CEO.
Evercore ISI analyst Steve Breazzano sees the deal as an opportunity to improve Ultragenyx's outlook, filling a gap in its pipeline and moving it beyond its lead drug, burosumab, which has "had several notable setbacks," he wrote in a note to clients.
"We believe that Ultragenyx's scientific, clinical, regulatory, and commercial skills will help Dimension's talented team accelerate the process of bringing important new therapies to market for patients with rare genetic diseases. We believe Ultragenyx and our product candidates are highly complementary to Dimension's, giving us confidence that we could combine our two companies quickly and seamlessly," Ultragenyx said in a statement.
Ultragenyx is obviously keen to add gene therapy to its rare and ultra-rare disease portfolio, particularly following a Phase 2 seizure med failure and a genetic disease project termination earlier this year. Hence, this is the company's second go at acquiring Dimension. In September, the company put forward an offer of $5.50 a share, based on Dimensions stock price at close of play on September 15.
In order to preserve Dimension's gene therapy knowledge, Ultragenyx will maintain a gene therapy R&D unit, as well as a manufacturing team in Dimension's facilities in Massachusetts. The Dimension acquisition will add a mostly pre-clinical pipeline of gene therapies, including drugs for ornithine transcarbamylase deficiency (DTX301) and glycogenstorage disease type Ia (DTX401).