Dive Insight:

Kyowa’s buyout of Orchard adds to a half dozen other gene therapy acquisitions over the past year. While the dealmaking is in some respects an encouraging sign, the sale prices have been modest and typically followed business setbacks for the acquired companies.

Broadly, gene therapy developers have struggled with ebbing investor enthusiasm for their typically costly research as well as evidence in Europe and the U.S. that marketing the one-time treatments can be a slow and difficult process.

Both Orchard and Bluebird bio, which won EU approvals of two genetic therapies, have stopped marketing treatments in Europe after minimal sales. Bluebird later wound down its operations on the continent, citing challenges in obtaining reimbursement for its $1.8 million treatment Zynteglo from European payers.

Bluebird has also faced a slow start for Zynteglo in the U.S., although it’s awaiting a Food and Drug Administration approval in sickle cell disease that could unlock a larger market. CSL Behring’s launch of its hemophilia B treatment Hemgenix has proceeded slowly, meanwhile. (UniQure, the drug’s original developer, on Thursday announced layoffs of staff not involved in manufacturing Hemgenix for CSL.)

Orchard has had some success in winning payer agreement to reimburse Libmeldy, which it priced at nearly 2.9 million euros per patient. But sales are still minimal, totaling $6.6 million in the second quarter. Metachromatic leukodystrophy, the disease Libmeldy treats, is rare, occurring between one in 50,000 to one in 100,000 newborns, according to the company. The condition causes rapid loss of motor and cognitive function and in its most severe form often leads to death within five years of symptoms beginning.

In addition to Libmeldy, Orchard is developing two other gene therapies for Hurler and Sanfilippo syndromes. All three treatments are made by the genetic engineering of hematopoietic stem cells.

The companies expect the deal to close in the first quarter of next year, which is also when the FDA is set to decide on U.S. approval of Libmeldy. Orchard’s shareholders include RA Capital and Deep Track Capital, which together owned about one-third of the company as of June 30.