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Roche Puts Up Historic $1.15B for Sarepta Duchenne Gene Therapy Deal

Photo by Flickr user Dan4th Nicholas.Used under Creative Commons license to Xconomy standard.

Swiss biopharma Roche is betting more than $1 billion that Sarepta Therapeutics, which recently won FDA approval for its second RNA medicine for Duchenne muscular dystrophy, will get its lead gene therapy treatment across the finish line too.

The deal, one of the biggest ever US biopharma licensing agreements, gives Roche the right outside of the US to SRP-9001, one of the investigational treatments Sarepta is developing for the fatal genetic disease.

Doug Ingram, president and CEO of Sarepta (NASDAQ: SRPT), said in a Monday conference call that the transaction was the largest single-asset licensing deal in biopharma history for rights outside of the US, and judging by the upfront payment alone, the largest licensing deal ever in cell and gene therapy.

In the call, he said the arrangement would be “transformational” and of “lasting strategic importance” for the Cambridge, MA-based biotech—and that were the drug approved, could bring Sarepta more than $10 billion in payments, including royalties.

Under the deal, Roche gets the right to launch and commercialize SRP-9001 globally, except for the US, where Sarapeta retains rights.. Roche agreed to shell out $750 million in cash and buy $400 million-worth of Sarepta stock upfront at $158.59 per share. That’s a 26 percent premium over Sarepta’s stock price Friday, $126.17 apiece at market close.

The experimental drug is designed to boost production of a protein called micro-dystrophin, a smaller version of the dystrophin gene—which, when mutated, causes DMD—in muscle tissue. Its size makes it easier to deliver. The treatment, a single infusion meant to provide long-lasting effects, is targeted at about 70 percent of Duchenne patients with specific types of genetic abnormalities.

Ingram said that he has “often resisted licensing relationships” during his 25 years in biotech, but the Roche deal met the “very high bar” that Sarepta set.

“We insisted first that the economics must be unprecedented, given the unprecedented opportunity of this gene therapy candidate,” he said. Ingram added that any partnership also needed to accelerate Sarepta toward its aim of becoming “the world’s leader in rare genetic medicine.”

Sarepta will handle clinical development and manufacturing of the drug; Roche will pay half of the global clinical development costs. If the drug meets unspecified regulatory and sales milestones, Sarepta could receive up to $1.7 billion more, as well as royalties on any net sales.

Roche also gets an option for ex-US rights to other unspecified DMD programs, in gene therapy and in RNA, in exchange for more potential milestone and royalty payments and cost sharing. The option can’t be exercised for two years.

The companies anticipate the deal will close in the first quarter of 2020.

Sarepta recently won approval of golodirsen (Vyondys 53), its second Duchenne muscular dystrophy treatment, following an initial rejection by the FDA in August over potential side effects.

The company’s stock price rose about 9 percent on the news to $137 per share Monday afternoon.

Written by: Sarah de Crescenzo

Published on: December 23rd, 2019

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