Bobby Gaspar, MD, PhD
Orchard Therapeutics co-founder and CEO

Kyowa Kirin has agreed to acquire gene therapy developer Orchard Therapeutics for up to $477.6 million, the companies said today, in a deal designed to expand the buyer’s gene and cell therapy portfolio with a rare disease treatment under FDA review following approvals in Europe and the U.K.

That treatment, Libmeldy® (atidarsagene autotemcel), also known as OTL-200, is indicated for patients with early-onset metachromatic leukodystrophy (MLD) Libmeldy is approved by the European Commission (EC) and the U.K. Medicines and Healthcare products Regulatory Agency (MHRA) for the treatment of “late infantile” and “early juvenile” MLD patients.

Libmeldy is now under FDA Priority Review, with a target action date under the Prescription Drug User Fee Act (PDUFA) of March 18, 2024 after the agency accepted Orchard’s BLA last month. Libmeldy uses a patient’s own genetically modified hematopoietic stem cells (HSCs) to potentially correct the underlying cause of a genetic disease using a single administration.

Using the same HSC gene therapy technology platform, Orchard is advancing two clinical-stage programs for forms of MPS: OTL-203, a treatment for mucopolysaccharidosis type I Hurler’s syndrome (MPS-IH); and OTL-201 for mucopolysaccharidosis type IIIA (MPS-IIIA), also called Sanfilippo syndrome.

Orchard said its acquisition by Kyowa Kirin will enable the buyer to maximize the value of Libmeldy and accelerate the development of its next-in-line clinical programs for forms of mucopolysaccharidosis (MPS), plus other early research programs that include a severe, genetic form of Crohn’s disease and frontotemporal dementia (FTD).

Orchard also reasons that combining its HSC gene therapy platform technology with Kyowa Kirin’s capabilities, resources, and infrastructure will enable continued development of numerous additional pipeline candidates, including in therapeutic areas and indications where Kyowa Kirin is strongest, such as oncology and autoimmune diseases.

“This is an exciting opportunity designed to accelerate the realization of our shared vision of ending the devastation caused by severe genetic diseases and deliver life-changing value in medical care,” Bobby Gaspar, MD, PhD, Orchard’s co-founder and CEO, said in a statement.

Orchard investors roared their approval of the deal with a buying surge that nearly doubled the price of the company’s American depositary shares (ADS) traded on Nasdaq–up 97% from $8.08 to $15.99 as of 11:23 a.m. ET. Shares of Kyowa Kirin stayed flat, finishing trading earlier today at ¥2,544 ($17.12), down 0.24%.

Headquartered in London with a U.S. HQ in Boston, Orchard’s workforce consisted of 166 full-time employees as of December 31, according to the company’s Form 10-K annual report for 2022.

“True to our mission”

Gaspar added: “We remain as true to our mission as ever, and joining Kyowa Kirin’s global network ensures we are well-resourced to progress anticipated commercialization of OTL-200 in the U.S., if approved, continue investing in initiatives aimed at accelerating Libmeldy growth in Europe, capitalize on opportunities for global expansion, as well as advance our next-in-line neurometabolic programs in MPS disorders and earlier-stage research programs.”

Gaspar has been a pioneer in HSC gene therapy, leading some of the first studies in patients with severe combined immunodeficiency (SCID), before co-founding Orchard in 2015. He is an honorary professor of pediatrics and immunology at the UCL Great Ormond Street Institute of Child Health.

In 2020, he succeeded Mark Rothera as Orchard’s CEO, then quickly streamlined the pipeline and eliminated about 25% of its workforce or 60 jobs, generating $125 million in savings through 2021.

Kyowa Kirin agreed to pay at least $16 per ADS cash for Orchard—approximately $387.4 million—representing a premium of 144% to Orchard Therapeutics’ volume-weighted average price per ADS over the previous 30 days ended October 4, plus an additional contingent value right (CVR) of $1 per ADS tied if the FDA approves Libmeldy. Should that occur and the CVRs be exercised, the value of the deal at $17 per ADR would rise to approximately $477.6 million.

The boards of Kyowa Kirin and Orchard have board approved the deal, which is expected to close in the first quarter of 2024 subject to Orchard shareholder approval, receipt of applicable regulatory approvals, and other customary closing conditions.

Once the deal closes, Orchard Therapeutics will become a wholly-owned subsidiary of Kyowa Kirin.

“Our hope is to combine the strengths of Kyowa Kirin and Orchard Therapeutics with mutual respect to realize the successful creation and delivery of life-changing value for patients living with rare and life-threatening inherited diseases,” stated Takeyoshi Yamashita, PhD, Kyowa Kirin’s director of the board, chief medical officer, and senior managing executive officer.

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