Dimension Therapeutics said today it has terminated earlier plans to be acquired by Regenxbio for $85 million after accepting a sweeter, approximately $151 million acquisition offer from Ultragenyx Pharmaceutical—ending the prospect of a bidding war for the gene therapy developer.
Ultragenyx’s offer amounts to $6 per share cash, 50 cents (approximately 9%) above its initial roughly $138 million offer for Dimension disclosed on September 18.
Dimension said its board agreed to halt its planned merger with Regenxbio late yesterday—and withdraw its earlier recommendation that shareholders approve the deal—after concluding that Ultragenyx’ offer was a “superior proposal.”
“We look forward to completing this transaction as quickly as possible for the benefit of both Dimension's and Ultragenyx's stockholders,” Ultragenyx said in a statement.
Two weeks ago on September 19, Dimension signaled it was leaning toward that course of action when its board announced that Ultragenyx’s offer “could reasonably be expected to lead to a ‘Superior Proposal.’ “
Regenxbio refused to increase its offer and waived its option to match or exceed the Ultragenyx offer by negotiating an amendment of its earlier merger proposal. Instead, Regenxbio said, it will receive the $2.85 million termination fee called for under their acquisition agreement, announced on August 25. Ultragenyx has agreed to pay the termination fee to Regenxbio, Dimension said, adding that it is required to repay that money to Ultragenyx under certain unspecified circumstances.
“While the strategic rationale for a combination with Dimension is compelling, we believe our offer represented fair value and prudently enabled both companies’ shareholders to participate in the upside of the combined company,” stated Kenneth T. Mills, Regenxbio’s president and CEO. “We take a disciplined approach to business development and will continue prioritizing the advancement of our proprietary NAV® Technology Platform and our exciting, potentially life-changing gene therapy lead product candidates for retinal, metabolic, and neurodegenerative diseases.”
Assumption of NAV License
Once the deal is completed, Ultragenyx will assume Dimension’s license from Regenxbio for novel adeno-associated virus (AAV), or NAV, technology in seven inherited metabolic disease fields, including ornithine transcarbamylase (OTC) deficiency, glycogen storage disease type a1a (GSDa1a), and hemophilia A.
According to Regenxbio, Dimension has one remaining limited option to an exclusive commercial license for a disease indication that is available for licensing—which would exclude products under development by Regenxbio or its NAV Technology licensees.
Ultragenyx’s acquisition of Dimension will expand the buyer’s pipeline to include Dimension’s DTX301 and DTX401 candidates. DTX301 is a gene therapy candidate for OTC deficiency that uses Regenxbio’s novel AAV (NAV) AAV8 vector to deliver a copy of the OTC gene to liver cells. DTX301 is being studied in a Phase I/II clinical trial following FDA approval of its Investigational New Drug (IND) application last year.
DTX401 is a gene therapy candidate for GSDIa, in which an NAV AAV8 vector is used for delivering a copy of the glucose-6-phosphatase (G6Pase) gene to liver cells. An IND application is expected to be filed for DTX401 in early 2018, Regenxbio and Dimension have said.
Both DTX401 and DTX301 have been designated as orphan drugs in the U.S. and Europe—and both have been developed under exclusive licenses previously granted to Dimension by Regenxbio.
“We believe that Ultragenyx's scientific, clinical, regulatory, and commercial skills will help Dimension's talented team accelerate the process of bringing important new therapies to market for patients with rare genetic diseases,” Ultragenyx added.
NAV includes novel AAV vectors such as rAAV7, rAAV8, rAAV9, and rAAVrh10. According to Dimension, NAV provides further advantages over traditional AAV vectors, including greater efficiency for delivering genes in vivo, faster onset of gene expression, high tissue selectivity, and high-titer manufacture.
The technology was discovered in the lab of Regenxbio’s scientific founder James M. Wilson, M.D., Ph.D., director of the gene therapy program at the University of Pennsylvania. Dr. Wilson also chairs Dimension’s Scientific and Technical Advisory Board, and serves as clinical development editor of Human Gene Therapy, a journal published by GEN publisher Mary Ann Liebert Inc.
“We wish Ultragenyx and Dimension well, and we hope that Ultragenyx will use its considerable experience and resources to advance all of the programs licensed from Regenxbio for the benefit of patients in need,” Mills added. “We look forward to working with Ultragenyx to rapidly progress all of Dimension’s programs as provided for under the terms of our license agreements.”