- Regenxbio Inc.'s proposed takeover of Dimension Therapeutics Inc. looked squared away by the end of August. The deal received unanimous backing from both companies' boards of directors, and executives expected it to close by year's end. But things got more complicated on Monday.
- Another suitor, Ultragenyx Pharmaceutical Inc., has put in its own bid to acquire the Rockville, Maryland-based gene therapy developer. The all-cash transaction would hand Dimension $5.50 per share of outstanding common stock, giving it a total deal valuation of about $138 million — a larger premium than Regenxbio provided through its own all-equity offer.
- "Our vision would be to leverage our significant clinical and regulatory expertise, as well as our growing rare metabolic disease commercial infrastructure, to advance Dimension's rare disease focused gene therapies through the clinic and to maximize their reach with patients," Ultragenyx head Emil Kakkis wrote in a Sept. 18 letter to Annalisa Jenkins, Dimension's CEO
Ultragenyx's biggest concern right now is its pipeline. The rare and ultra-rare disease drugmaker suffered some clinical setbacks earlier this year, including a Phase 2 failure of its seizure medication, UX007, and a termination of its program for a neuromuscular treatment, extended release aceneuramic acid.
Adding Dimension's pipeline would give the company access to several preclinical and early-stage assets. Particularly interesting for Regenxbio when it announced plans to acquire Dimension were the target's investigational drugs for ornithine transcarbamylase deficiency (DTX301) and glycogen storage disease type Ia (DTX401).
In addition to serving as Ultragenyx's CEO, Kakkis is as one of Dimension's scientific advisors. He said during a Sept. 18 investor call that, while he wasn't aware of the Regenxbio takeover until it surfaced few weeks ago, the offer did spur his company to act.
"Now the question is 'why are we doing gene therapy now?'" Kakkis said on the call. "I think if you looked in the long run for us as a company, if you want to treat rare diseases, gene therapy is going to be one of the most [important methods] to optimally treat some rare diseases, though not all of them."
Should Dimension decide to shift gears, Ultragenyx said it has sufficient cash stores to finance a transaction. The would-be acquirer reported cash and cash equivalents of $90.8 million as of June 30, plus another $309 million in short-term investments and $58 million in long-term investments. What's more, the offer represents a 358% premium to Dimension's closing share price on Aug. 24, the day before Regenxbio announced its takeover plans.
Regenxbio's offer was to give 0.1573 shares of its own stock for every share of Dimension's, a transaction that carried an implied value of $3.41 per share given Regenxbio's stock position at the time of the offer. Ultragenyx argues, however, that its proposal is a 24% premium to Regenxbio's offer based on Regenxbio's closing stock price on Sept. 15. That premium grows to 48% when considering the Regenxbio's volume-weighted average stock price over the 20 trading days trailing Sept. 15.
In mid-morning trading on Monday, Ultragenyx stock was down less than 1% to $54.74 per share while Regenxbio stock was up nearly 2% to $28.75 per share. Dimension shares were up 9.5% to $4.60 apiece in pre-market trading.
Regenxbio and Dimension did not return a BioPharma Dive request for comment by time of publication.
Note: This article was updated to reflect Ultragenyx's short- and long-term investments as of June 30.