Novartis is deepening ties with Voyager Therapeutics, agreeing to exercise an option to license tools the biotechnology company has developed to make gene therapies for brain diseases.
The Swiss drugmaker is paying Voyager $25 million for rights to certain uses of the biotech’s novel “capsids,” or viral shells that are used to deliver genetic material into cells. Novartis acquired options to license the capsids, which are meant to reach brain tissue, through an alliance the two companies formed last March. It intends to use them for gene therapy programs aimed at two undisclosed neurologic disease targets.
Novartis chose not to exercise rights to a capsid for a third target involved in the 2022 deal, Voayager said in a Monday statement. But its decision still gives Voyager an opportunity to earn hundreds of millions of dollars in future payments at a time when funding options are more limited for drugmakers than they have been in the past.
The partnership could get larger still, as Novartis has another 18 months to decide whether to acquire rights to capsids for two more rare brain disorder targets.
The deal is the latest step in an effort by Voyager to use partnerships as a way to withstand biotech’s recent market downturn and advance its own research. The company has suffered multiple setbacks since launching nearly a decade ago. Since 2021, it’s been leaning on a newer technology it claims can get gene therapies into hard-to-reach organs like the brain.
That technology, dubbed TRACER, is at the center of a string of partnerships the company has inked since 2021. Pfizer grabbed options to two of Voyager’s capsids in 2021 and licensed one of them last October. Novartis followed with a similar deal last March. And in January, Neurocrine Biosciences aligned with the company on a larger partnership to develop multiple gene therapies.
The partnerships left Voyager with about $294 million on its balance sheet as of mid-January after burning through about $77 million in 2022, said Al Sandrock, the veteran Biogen executive who became Voyager’s CEO last year, in a recent interview. Shares are worth nearly double what they were a year ago, though at only about $7 apiece, they're well below their peak of about $30 in 2018.
“These [deals] provide a lot of non-dilutive revenue at a time when it’s really hard to raise capital,” Sandrock said in that January interview. “We’ve got a cash runway. We can weather the storm that we’re in now, I believe.”
For Novartis, the licenses give the company tools that could overcome the delivery challenges that have hindered companies’ ability to get gene therapies into the brain. Upon signing the deal last year, the company noted that Voyager’s capsids might have “broad and improved distribution” to neurons in deep regions of the brain. The company sells one of the world’s few marketed gene therapies for an inherited disease, Zolgensma, and has invested heavily in gene therapy technology.