Vertex expands CRISPR collaboration and acquires Exonics
Gene editing -- the insertion, deletion or replacement of DNA at a specific site in the genome of an organism or cell – is becoming even bigger business for Vertex Pharmaceuticals, a Boston-based biopharmaceutical company that uses rational drug design.
Vertex has marketed treatments for cystic fibrosis (CF), including Kalydeco (ivacaftor), Orkambi (ivacaftor and lumacaftor), and Symdeko (tezacaftor/ivacaftor and ivacaftor), that generated a combined $3.038 billion in product revenues in 2018. Now it is engaging in two deals that will help to create treatments for Duchenne Muscular Dystrophy (DMD) and Myotonic Dystrophy Type 1 (DM1). Both transactions are likely to close in the third quarter of 2019.
Vertex plans to acquire Exonics Therapeutics for about $1 billion. The Watertown, Massachusetts-based company uses SingleCut CRISPR gene editing technology to create treatments that repair mutations causing DMD and other genetic neuromuscular diseases with unmet needs. The technology, which is licensed from the University of Texas Southwestern Medical Center (UTSW), has been used to genetically repair and restore dystrophin in preclinical trials. In addition to paying $245 million upfront to Exonics for acquiring all its outstanding shares and forming a wholly-owned subsidiary, Vertex will enable shareholders of Exonics to receive about $1 billion, including upfront and potential milestone payments related to the DMD and DM1 programs. The Exonics acquisition is subject to certain conditions, one of which is the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.
Vertex also intends to spend as much as $1.175 billion to expand a 3½-year-old collaboration with CRISPR Therapeutics that has produced the first clinical trial of a potential gene-editing therapy sponsored by U.S. companies. According to the terms of the expanded collaboration, Vertex is going to pay CRISPR $1 billion, including $175 million in upfront payment and potential research, development, regulatory and commercial milestone payments for the DMD and DM1 programs. In return, Vertex will acquire exclusive worldwide rights to CRISPR Therapeutics’ existing and future intellectual property, including CRISPR/Cas9 technology. Vertex will be in charge of research, development, manufacturing and commercialization activities and all costs related to the programs. Both companies will share research costs for a specified guide RNA research related to the DM1 program.
According to Vertex chairman, president and CEO Jeffrey Leiden, MD, PhD, “These transactions are highly aligned with our strategy of investing in scientific innovation to create transformative medicines for people with serious diseases.”
As Debra Miller, CEO and founder of CureDuchenne, a co-founder of Exonics that provided startup funding for the company, “The Duchenne community needs novel approaches to treat and cure this devastating disease and Exonics’ technology has the potential to dramatically improve the lives of Duchenne patients.”
Vertex is still dependent on its cystic fibrosis products for future growth. By expanding its collaboration with CRISPR and acquiring Exonics, Vertex will diversify its risk by expanding its pipeline into new disease areas. Genomic editing using CRISPR technology to repair defective genetic material that causes diseases has been described as a promising healthcare innovation that will benefit the company.