Weeks after raising an oversubscribed $60 million series A, Affinia Therapeutics Inc., of Waltham, Mass., is collaborating with Vertex Pharmaceuticals Inc. in a far larger deal, one potentially worth more than $1.6 billion.

For Vertex, it’s the company’s second major deal in the past year involving adeno-associated viruses (AAVs) as it expanded its collaboration with Crispr Therapeutics AG and began the acquisition of privately held Exonics Therapeutics Inc. last summer.

Vertex and Affinia plan to engineer AAV capsids to deliver genetic therapies for treating Duchenne muscular dystrophy (DMD), myotonic dystrophy type 1 (DM1) and cystic fibrosis (CF). Affinia is responsible for the discovery of capsids, is eligible for more than $1.6 billion in up-front and development, regulatory and commercial milestones, including $80 million in up-front payments, and research milestones to be paid during the research term. It is also eligible to earn tiered royalties on future net global sales on any products resulting from the collaboration.

Vertex will be responsible for and will fund the design and manufacturing of genetic therapies incorporating the selected capsids, preclinical and clinical development efforts, and commercialization of any approved products in the licensed diseases. The agreement also gives Vertex an exclusive license under Affinia’s technology and intellectual property in DMD and DM1, with an exclusive option to license rights for CF and an additional undisclosed disease. The agreement’s scope covers all these diseases’ genetic therapy modalities.

Affinia’s platform is designed to identify AAVs matching the required target profile for each indication in terms of tissue tropism, pre-existing immunity and manufacturing yield. The capsids are designed for improved tissue tropism, manufacturability and pre-existing immunity.

On March 31, Affinia closed its oversubscribed $60 million series A financing. Seed venture investors F-Prime Capital and New Enterprise Associates co-led the round alongside new investor Atlas Venture, with participation from seed investors Alexandria Venture Investments, Lonza and Partners Innovation Fund. The financing’s goal was to help the newly created company research and develop drugs to benefit people affected by muscle and CNS conditions.

Affinia plans an IND sometime in the next two years. Its CEO is Rick Modi, previously of Avexis Inc., and the firm has about 20 employees currently on its roster.

In June 2019, Vertex took two large steps that helped pave the way to the AAV-centric Affinia deal: It expanded its collaboration with Crispr Therapeutics and it began the acquisition of Exonics.

The Crispr Therapeutics deal also ventured into the rarified billion-dollar category. It is eligible to receive payments of up to $1 billion inclusive of the up-front and potential future payments based upon the successful achievement of specified research, development, regulatory and commercial milestones for the DMD and DM1 programs. Crispr Therapeutics was to receive an up-front payment of $175 million, giving Vertex exclusive worldwide rights to its existing and future intellectual property, including foundational CRISPR/Cas9 technology, novel endonucleases, single and double cut guide RNAs, and AAV vectors for DMD and DM1 gene editing products. Crispr Therapeutics also has the potential for additional milestone and royalty payments.

The Exonics deal was for an up-front $245 million with the potential for additional milestone payments. Vertex acquired all outstanding shares of Exonics, which became a separate wholly owned subsidiary of Vertex. Exonics equity holders were eligible to receive payments of approximately $1 billion, including $245 million up front and potential future payments based primarily upon the successful achievement of specified development and regulatory milestones for the DMD and DM1 programs. Exonics develops gene-editing therapies for diseases that include DMD and other severe genetic neuromuscular diseases.

Vertex is prepping to reports its first-quarter 2020 earnings Wednesday, after the market closes. Piper Sandler analysts forecast on Monday that the company’s CF franchise sales will be $1.25 billion.

Vertex stock (NASDAQ:VRTX) barely budged on Monday, dropped a scant half percentage point to close at $268.51 per share.

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