Ultragenyx’s adeno-associated virus, or AAV, platform came via the 2017 acquisition of Dimension Therapeutics.
It’s a platform that attracted interest from other drugmakers well before the new deal with Daiichi. In 2014, Bayer paid $20 million upfront and put another $232 million on the table to collaborate with Dimension on developing a novel gene therapy for hemophilia A. Regenxbio, a Maryland-based biotech, also made a run at acquiring Dimension, but was outbid by Ultragenyx.
Ultragenyx says it’s built up a gene therapy business around Dimension’s base technology. By last year, the biotech had listed eight gene therapy programs in its pipeline. Three of them have advanced into human testing, including the hemophilia program partnered with Bayer.
Daiichi, meanwhile, hadn’t listed any clinical-stage gene therapy programs in its pipeline as of January. The deal with Ultragenyx, however, provides manufacturing capacity that’s needed if Daiichi advances its therapies into the clinic or, one day, the market.
“We are currently doing discovery research for gene therapy drugs using AAV vectors,” Masayuki Yabuta, head of Daiichi’s biologics division, said in a March 31 statement. “In order to provide these drugs to patients in the future, manufacturing technology must be established early.”
Deal terms hold that Daiichi Sankyo is responsible for development, manufacturing and commercialization of products made with Ultragenyx’s technology. The West Coast biotech Ultragenyx will also provide Daiichi with consultation regarding the development of AAV-based gene therapies as well as other drugs for rare diseases.
Daiichi agreed to pay Ultragenyx $125 million in cash and purchase $75 million of the company’s common stock at a price of approximately $60 per share. Ultragenyx shares were trading close to $44.50 at Tuesday’s market close, though they had climbed almost 7% to $47.42 in late morning trading Wednesday.
Ultragenyx will also receive $25 million after it transfers the technology to Daiichi. Additionally, the biotech may see single-digit royalties on net sales from products Daiichi manufactures with its systems.