Privately held Dyno Therapeutics Inc., an early stage biotech company applying artificial intelligence to gene therapy, entered a collaboration and license agreement with Spark Therapeutics Inc. that could bring Dyno milestone payments exceeding $1.8 billion.

Dyno will design adeno-associated virus (AAV) vectors for developing therapies to treat CNS diseases and liver-directed therapies for Spark and Roche Holding AG. Spark is a member of the Roche Group.

Roche and Spark will conduct the preclinical, clinical and commercialization activities using capsids created by Dyno.

Dyno will receive an undisclosed up-front payment and could receive additional payments during the research phase plus clinical and sales milestone payments and royalties for products emerging from the collaboration. The aggregate value of Dyno’s future milestone payments could top $1.8 billion.

Cambridge, Mass.-based Dyno’s approach to capsid engineering emerged from the lab of co-founder George Church at the Wyss Institute in Harvard Medical School. Dyno uses large-scale DNA synthesis to generate synthetic capsid libraries containing more viable capsids than those generated by random mutagenesis. Each capsid carries its own DNA barcode to simultaneously evaluate performance of multiple capsids in pooled experiments.

“Our goal is to build a map of the capsid landscape, meaning every possibly capsid sequence,” Eric Kelsic, Dyno’s CEO and co-founder, told BioWorld. That space, he added, is extremely large and AAVs are very complex. The company continues to develop assays using DNA barcodes to keep track of individual variants for assessing the performance of the entire library across key phenotypic parameters. Using the barcode, the company can measure where every capsid went, to which organ and which cell type by using DNA sequencing technology.

At best, Kelsic added, the goal is to improve the efficiency of delivery to targets and the specificity of the target. The company uses machine learning to analyze the data, then uses artificial intelligence to design new experiments.

AAV vectors are used in many gene therapy applications because of their safety, ability to transfect quiescent and dividing cells and also because of their relatively low immunogenicity. The technology has been validated by the regulatory approvals of AAV2-based gene therapy Luxturna (voretigene neparvovec-rzyl) in certain forms of retinal dystrophy and of AAV9-based therapy Zolgensma (onasemnogene abeparvovec, Novartis AG) in spinal muscular atrophy.

Their shortcomings include limited payload size, suboptimal transduction efficiencies and limited tissue targeting capabilities.

On the computational side, Kelsic said, the process is getting better, faster and cheaper as it can now all be in the cloud.

“The whole ecosystem is improving,” he added.

The deal will also increase the names on Dyno’s staff roster, according to Kelsic, who said the company is growing rapidly, faster than he had expected even five months ago. The hiring, which has jumped from a staff of 20 to a staff of 40 and is expected to continue climbing, is being done virtually, something Kelsic said the company had to adapt to early on in the pandemic.

Dyno, whose core area of expertise is artificial intelligence and gene therapy, was built for partnering, Kelsic said. The company has been busy lately cutting deals with other companies, an activity it also had to learn to conduct virtually since the pandemic began. In May, Cambridge, Mass.-based Sarepta Inc. and Dyno said they would collaborate to develop next-generation AAV vectors for muscle diseases, using its Capsidmap platform. The technology will be used for the design and discovery of AAV capsids with improved functional properties for gene therapy, and Sarepta will be responsible for conducting preclinical, clinical and commercialization activities for gene therapy product candidates using those capsids.

Also in May, Dyno said it would collaborate with Novartis AG to develop AAV vectors for R&D and commercialization of gene therapies for ocular disease. Terms were not specified, but Dyno said it would receive up-front consideration, research funding and license fees. The company is also set to receive clinical, regulatory and sales milestone payments along with worldwide net sales royalties on any products the partnership develops.

Doing the negotiations via Zoom was a transition that took some mastering and has now become an effective method, Kelsic said. One of the upsides of meeting virtually instead of meeting in person, he added, is that everyone is available for conference calls because no one is traveling. Even with the Roche and Spark negotiations, where the principals were spread across many locations, he added, “it was easy to find a time to meet.”

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