Moderna will apply Generation Bio’s proprietary stealth cell-targeted lipid nanoparticle (ctLNP) delivery system to discover and develop non-viral genetic medicines for immune system and liver disorders, through a collaboration that could generate up to $1.876 billion for Generation Bio.

Moderna has acquired an option to license both ctLNP and Generation Bio’s closed-end DNA (ceDNA) novel construct technology. The messenger RNA (mRNA)-based vaccine and drug developer plans to use the technologies to produce two novel nucleic acid therapeutics capable of reaching immune cells, as well as two programs designed to treat liver diseases that include rare indications such as Phenylketonuria (PKU) and Wilson disease, as well as more prevalent indications. Moderna also acquired an option for a third program that could target either immune cells or liver disease.

The collaboration aims to combine Moderna’s development and commercialization expertise with Generation Bio’s non-viral genetic medicine platform, which combines ctLNP and ceDNA with a capsid-free manufacturing process that uses proprietary cell-free rapid enzymatic synthesis, or RES, to produce ceDNA at a manufacturing scale of hundreds of millions of doses.

“Through this collaboration, which builds on Generation Bio’s non-viral genetic medicines platform, we have the potential to target immune cells with diverse nucleic acid cargos and the liver for gene replacement,” Rose Loughlin, PhD, Moderna’s senior vice president for research and early development, said in a statement. “We are excited to have Generation Bio as our partner as we continue to broaden our therapeutic pipeline and extend the potential benefit of nucleic acid therapeutics to more patients.”

Generation Bio says its platform is designed to enable multi-year durability from a single dose, to deliver large genetic payloads, including multiple genes, to specific tissues and cell types, and to allow titration and redosing to adjust or extend expression levels in each patient.

“Non-viral DNA therapeutics may offer durable, redosable, titratable genetic medicines to patients suffering from rare and prevalent diseases on a global scale,” said Phillip Samayoa, PhD, Generation Bio’s chief strategy officer.

Generation Bio’s current pipeline includes liver disease programs at the lead optimization stage in PKU and Wilson’s disease, as well as in Gaucher disease, while the company’s lead program in Hemophilia A is in preclinical development.

Also in lead optimization phases are programs for two eye disorders, Stargardt disease and Leber congenital amaurosis type 10 (LCA10), while a wet age-related macular degeneration (AMD) program is in research phase.

$40M Upfront, $36M investment

Moderna has agreed to pay Generation Bio $40 million cash upfront as well as invest $36 million in Generation Bio, with the shares to be sold at a premium over recent share prices. According to a regulatory filing, Moderna agreed to purchase 5,859,375 shares of Generation Bio stock, which at a total $36 million would come to $6.14 a share—58% above yesterday’s closing share price of $3.88.

The number of shares represents nearly 10% (9.8%) of the 59,665,758 shares of Generate Bio common stock that were outstanding as of February 17, according to the company’s Form 10-K annual report for 2022.

Moderna also has the right to purchase up to 3.06% of Generation Bio’s outstanding shares of common stock in connection with a future equity financing of at least $25 million.

Investors responded to news of the collaboration with a buying surge that sent Generation Bio shares up 29% today, from $3.88 to an even $5 a share. Moderna shares rose less than 1%, to $149.42.

“The mRNA partnership enables [Generation Bio] to accelerate & de-risk its platform expansion into additional areas without increased OpEx [operating expenses] as well as capital infusion,” Eun K. Yang, PhD, an equity analyst with Jefferies, wrote Thursday in a research note. Yang maintained the firm’s 12-month price target of $25 a share and “Buy” rating on Generation Bio shares.

“For additional partnership potential, GBIO sees the capacity to accommodate another deal within the next ~1-2 years,” Yang added.

Moderna is Generation Bio’s first collaboration partner, while the resulting partnership is Moderna’s third biotech collaboration announced this year. All three are aimed at broadening the company’s pipeline and toolbox of technologies beyond the mRNA platform it successfully applied in developing its COVID-19 vaccine, which won full FDA approval last year after the agency granted an Emergency Use Approval (EUA) in 2020.

Last month, Moderna agreed to partner with privately-held Life Edit Therapeutics, an ElevateBio company, to discover and develop in vivo mRNA gene editing therapies through a collaboration of undisclosed value. And in January Moderna inked an up-to-$1.2 billion ($35 million of that upfront) partnership with cancer drug developer CytomX to create mRNA-based conditionally activated therapies for oncology and non-oncology conditions by combining Moderna’s mRNA technologies with CytomX’s Probody® therapeutic platform.

“This collaboration represents a foundational investment in our platform science, both deepening our pipeline of rare and prevalent liver disease programs beyond hemophilia A and accelerating our work to reach outside of the liver with nucleic acid therapies,” Samayoa added. “We are thrilled to collaborate with Moderna to extend genetic medicines to new tissues and cell types through the joint development of novel targeting for our stealth ctLNPs to reach immune cells.”

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