- Ultragenyx Pharmaceutical, a California-based biotech best known for its rare disease drugs, plans to try its hand at developing a gene therapy for Duchenne muscular dystrophy, announcing Friday a deal to license a key gene therapy component from Solid Biosciences.
- Ultragenyx will package the component, a synthetic gene encoding for the crucial protein Duchenne patients lack, into a type of virus that it's developed to deliver DNA into the body's cells. Two other gene therapies from Ultragenx that use the virus, a variant of adeno-associated virus 8, are now in clinical trials for other rare diseases.
- Per deal terms, Ultragenyx will purchase roughly 7.8 million Solid shares for $40 million, valuing each at the equivalent of $5.11 apiece — a nearly 50% premium over the stock's closing price Thursday. Solid could receive another as much as $255 million more in conditional payments, although those may never materialize.
Solid is already testing a Duchenne gene therapy of its own in an early-stage clinical trial, making the Cambridge, Massachusetts-based biotech among the furthest along in development of a potentially long-lasting treatment for the rare muscle disorder.
The company's progress, however, has been slowed by persistent safety concerns that have led the Food and Drug Administration to twice halt testing in Solid's study.
After making changes to how the therapy is made and how patients are enrolled, Solid recently received a green light from the regulator to resume dosing. Solid expects to treat the next patient in its study in the first quarter of next year.
Despite the safety setbacks, Ultragenyx believes the science behind Solid's treatment is sound, calling the synthetic gene Solid uses as "best-in-class" in a statement announcing the licensing deal Friday.
But Ultragenyx seems to think its viral delivery technology, along with a large-scale manufacturing process it's developed, may be better suited to a Duchenne gene therapy.
"We believe we can leverage our mutual strengths to develop a high-quality AAV-based treatment alternative for Duchenne," said Emil Kakkis, Ultragenyx's chief executive, in the company's statement.
Ultragenyx will be joining a fast-moving field. In addition to Solid, Sarepta Therapeutics, Pfizer and Astellas are developing gene therapies for Duchenne, which mainly affects boys and usually leads to early death.
Sarepta and Pfizer, in particular, are well advanced, having already shown early evidence their treatments might work as intended. Pfizer is on the cusp of treating patients in a Phase 3 study, while Sarepta could soon begin a late-stage trial of its own.
Ultragenyx knows rare disease drug development well, having won U.S. approval for three medicines, including one for long-chain fatty acid oxidation disorders this past July. It's a newer entrant in gene therapy, however, having acquired its gene therapy technology via a 2017 acquisition of Dimension Therapeutics.
Two therapies from that buyout, DTX301 and DTX401, are in early-stage tests for two rare inherited diseases.
With the Solid deal, Ultragenyx now has an exclusive license to use Solid's synthetic gene — called micro-dystrophin for the protein it encodes — for any therapy based on AAV8 that treats a disease resulting from missing dystrophin protein, including Duchenne and Becker muscular dystrophy.
Solid will retain full rights to its gene therapy now in testing, called SGT-001.
"While there's a lot of wood to be chopped in repackaging Solid's [Duchenne] construct into [Ultragenyx]'s AAV8 variant capsid and scaling up, we think — on paper — this approach could address drawbacks with Solid's AAV9-related safety issues," wrote analysts at Piper Sandler in a Oct. 23 note to clients.
The long road ahead and potential safety concerns notwithstanding, Ultragenyx may have found an entry into the Duchenne space for relatively little. The $40 million investment is a fraction of the roughly $817 million Ultragenyx held in cash, equivalents and investments at the end of June, and is dwarfed by the $1.2 billion Roche paid last December to partner with Sarepta.
Ultragenyx shares rose slightly before falling 1% in Friday morning trading, while Solid's stock rose by nearly 4% in value.