Pfizer is making a $60 million equity investment in the gene therapy company Homology Medicines, betting on what one of its rare disease executives termed a “potentially transformational” therapeutic option for patients with a rare metabolism disorder known as phenylketonuria, or PKU.
The giant drugmaker made the investment a few days after Homology revealed its latest clinical results as well as plans to move its lead program, known as HM-102, into more definitive tests. Pfizer is buying 5 million Homology shares at a price of $12 each. Homology’s stock traded at $10.12 early on Nov. 10.
The move is the latest by Pfizer to add to its growing gene therapy presence, which has been built through a steady stream of acquisitions and licensing deals. Seng Cheng, the chief scientific officer of Pfizer’s rare disease research unit, will join Homology’s scientific advisory board to help with development of HMI-102 for adults with PKU and HMI-103 for pediatric patients.
The investment gives Pfizer right of first refusal to any potential deal for the PKU therapies and offers Homology a critical infusion of funds for clinical trials. Homology, which had about $178 million in cash and cash equivalents as of Sept. 30, says it now expects to have enough money to fund operations into the third quarter of 2022.
PKU affects almost 16,500 people in the U.S. and about 50,000 around the world. Patients with the condition have a mutation in a gene that affects the way the body processes a critical amino acid called Phe. Without treatment, Phe can accumulate in a patient’s body and cause neurological impairment.
Homology’s HMI-102 and HMI-103 therapies work in different ways to try to correct the genetic error in patients with PKU. The company began a Phase 1/2 study of HMI-102 last year and on Nov. 6 announced the latest clinical results for the treatment. It plans to begin a randomized, controlled expansion phase of the ongoing trial that the company believes could serve as a pivotal study.
HMI-102 has received both orphan drug and fast-track designations from the Food and Drug Administration, as has another gene therapy under development by rival BioMarin. Sangamo Therapeutics is also developing a gene therapy for PKU. None of those programs are in late-stage testing as of yet.
Pfizer’s investment in Homology is part of its Breakthrough Growth Initiative, a program announced in June. The company intends to invest as much as $500 million in biotechnology companies with promising experimental treatments and offer its scientific expertise to help shepherd the products along.
The focus for Pfizer is on treatments that have the chance to be the first or “best in class,” said Doug Giordano, Pfizer’s senior vice president of business development, in a June interview with BioPharma Dive. Initial investments may evolve into a partnership or bigger deals, he said.
The Homology investment also gives Pfizer the chance to add to its gene therapy pipeline. Over the past several years, the company has acquired gene therapy candidates for Duchenne muscular dystrophy, hemophilia and Wilson’s disease through dealmaking, and has invested heavily in manufacturing capabilities.