Biogen has agreed to acquire Nightstar Therapeutics for approximately $877 million, the companies said today, in a deal that replenishes the buyer’s ophthalmology drug pipeline with gene therapies led by a Phase III choroideremia candidate—nearly three months after Biogen terminated a collaboration agreement with another eye-disease gene therapy developer.

London-based Nightstar focuses on developing novel one-time treatments for patients suffering from rare inherited retinal diseases that are designed to reverse the disorders’ progression to blindness. Nightstar’s pipeline consists of seven gene therapies, of which two are in clinical phases.

By acquiring Nightstar, Biogen would restock a pipeline that it gutted in December 2018 when it gave notice that as of March 8, it will it will terminate collaborations with AGTC to develop two ophthalmology gene therapy candidates, both in Phase I/II—rAAV2tYF-CB-hRS1 (formerly BIIB087) for X-linked retinoschisis (XLRS); and one for X-linked retinitis pigmentosa (XLRP), formerly BIIB088.

The termination followed what AGTC acknowledged was the failure of the XLRS candidate based on topline interim data from a Phase I/II trial that showed no signs of clinical activity at six months following treatment (NCT02416622).

“Nightstar would accelerate our entry into ophthalmology by contributing two mid- to late-stage gene therapy assets, with the potential to create long-term shareholder value,” Biogen CEO Michel Vounatsos said in a statement. “Ophthalmology is an emerging growth area for Biogen, and we are excited about the opportunity to work with the talented employees at Nightstar to advance potentially transformative gene therapy programs for rare retinal diseases.”

In discussing fourth-quarter 2018 results with analysts on Biogen’s quarterly conference call January 29, Vounatsos included gene therapy among “the breadth of modalities we are pursuing,” along with biologics, antisense oligonucleotide, oral protein degraders, and splicing modulators, according to a transcript published by Seeking Alpha.

Added Nightstar CEO David Fellows: “Our agreement with Biogen will give us the platform and resources to expand our mission to maintain and restore sight in patients with inherited retinal diseases.”

Enhancing REP1 expression

Nightstar’s lead candidate NSR-REP1 is designed as a one-time treatment for choroideremia, a rare, degenerative, genetic retinal disorder that leads to blindness. NSR-REP1 consists of an adeno-associated virus 2 (AAV2) vector that contains recombinant human complementary DNA, or cDNA, that is designed to produce the Rab escort protein 1 (REP1) inside the eye.

The company reasons that enhanced REP1 expression may slow or reverse the early stages of cell death in already damaged retinal cells, accounting for the substantial improvements in visual acuity that Nightstar says has been seen in some patients following treatment with NSR-REP1.

Nightstar has cited data published in 2014 in The Lancet from a 12-patient Phase I/II trial of NSR-REP1 (NCT01461213) showing a potentially meaningful slowing of decline in visual acuity compared to natural history, as well as signs of improved visual acuity in some patients. Follow-up data published in 2016 in The New England Journal of Medicine also showed positive results. “The early improvement that we observed in two of the six patients was sustained at 3.5 years after treatment, despite progressive degeneration in the other eyes (the control eyes).”

NSR-REP1 is now being evaluated in the ongoing Phase III STAR trial (NCT03496012), assessing the efficacy and safety of a single sub-retinal injection of AAV2-REP1, with data expected in the second half of 2020.

NSR-REP1 is also under study in the Phase II GEMINI safety study (NCT03507686), a multi-center, open-label, prospective, two-period, interventional safety study of bilateral use of AAV2-REP1 in adult men with genetically confirmed choroideremia—as well as a long-term safety and efficacy follow-up study of AAV2-REP1 that is enrolling patients by invitation, consisting of up to 9 visits over a maximum 48-month study period (NCT03584165).

NSR-REP1 is administered surgically by injection into the sub-retinal space, which is between the outer layers of the retina. The introduction of the functional CHM gene is designed to enhance expression of the REP1 protein, thereby reducing the accumulation of waste products in retinal cells and slowing or stopping the decline in vision.

Positive preliminary data in XLRP

Nightstar’s other gene therapy in the clinic is NSR-RPGR, an XLRP candidate in the ongoing Phase II/III dose expansion portion of the XIRIUS trial (NCT03116113). NSR-RPGR consists of an AAV vector administered by subretinal injection designed to provide a functioning RPGR gene and thus expression of the RPGR protein, which is critical for protein transport in photoreceptors. The restoration of photoreceptor function is intended to slow, stop, or potentially reverse the decline in vision.

In September 2018, Nightstar presented positive preliminary safety and efficacy data from the 18-patient Phase I/II dose escalation portion of the XIRIUS trial at the EURETINA 2018 Congress. The data showed an increase in central retinal sensitivity, and improvement in microperimetry for all three patients in cohort 3 (5×10^10 gp dosage), one of three patients in cohort 4 (1×10^11 gp), and one of three patients in cohort 5 (2.5×10^11 gp). One-year follow-up data on all 18 patients in the dose escalation study is expected to be available in the second half of 2019, Nightstar said at the time.

Rounding out Nightstar’s pipeline are five preclinical candidates: NSR-ABCA4 for Stargardt disease; NSR-BEST1 for Best disease; and three retinitis pigmentosa candidates, NSR-CNTF, NSR-OPN4, and NSR-RHO.

Biogen plans to pay $25.50 in cash for each Nightstar share, representing a premium of approximately 70% above the 30 trading day volume-weighted average price per Nightstar American Depositary Receipt of $15.02 from January 17 through March 1.

Biogen said it plans to fund its acquisition of Nightstar through available cash, and expects to complete the acquisition by mid-year 2019 subject to customary closing conditions, including the approval by Nightstar shareholders, the issuance of an order by the U.K. Court and receipt of regulatory approvals.

The proposed acquisition does not require the approval of Biogen’s stockholders.

“This transaction accelerates treatment to patients through Nightstar’s key retinal gene therapy programs that modify or halt progression of blindness. Together, with Biogen’s expertise in rare diseases, worldwide reach, and extensive resources, we will dramatically improve the lives of patients around the world who currently have no treatment options,” Fellows added.

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