Precision Biosciences Inc. CEO Matthew Kane said the company is in “active discussions around additional partnerships in vivo and in other areas across our organization,” after scoring a deal with Eli Lilly and Co. centered on the firm’s Arcus genome-editing platform. “There’s no conceivable way in the near term that we’re going to advance all of the possibilities of Arcus on our own,” he said.

Durham, N.C.-based Precision will work with Lilly, of Indianapolis, on potential in vivo therapies for genetic disorders with a first focus on Duchenne muscular dystrophy (DMD) and two other undisclosed gene targets. Over the course of the four-year pact, Lilly has the right to nominate up to three more targets; for an extension fee, the nomination period can add two more years. Precision banks $100 million cash up front, and Lilly is making an equity investment of $35 million. The arrangement could bring milestone payments of up to $420 million per product to Precision, as well as tiered royalties on sales of licensed products. Precision may elect to co-fund the clinical development of one licensed product, which could be selected from among the third or any subsequent licensed products to reach an IND filing. Shares of Precision (NASDAQ:DTIL) closed at $10.72, up $1.04, or 10.7%.

Features of Arcus include specificity, ability to make a variety of efficient edits (knock-in, knock-out, and repair), and small size, thereby enabling a range of therapeutic editing. The platform is derived from a natural genome-editing enzyme called I-CreI, a homing endonuclease that can be optimized to control for potency and specificity, Precision said.

Regarding delivery, chief scientific officer Derek Jantz told investors during a conference call that the adeno-associated virus (AAV) vector is “the obvious choice,” as other companies have such gene therapies in DMD. “That allows us to see how well AAV is working in that context. Generally speaking, those groups – particularly Sarepta – are seeing clinically meaningful gene delivery to muscle. To some extent, we can ride on those coattails a little bit and learn from what they’re doing,” though Precision will explore “other, newer, cutting-edge delivery strategies for muscle,” he said.

Cambridge, Mass.-based Sarepta Therapeutics Inc. disclosed positive two-year functional data of SRP-9001 micro-dystrophin gene therapy in DMD at the 25th International Annual Congress of the World Muscle Society, held virtually this fall. Two years after a one-time infusion of SRP-9001, trial participants exhibited a mean 7-point improvement on the North Star Ambulatory Assessment compared to baseline (at one year post treatment the mean increase was 5.5 points from baseline). The data were generated from four ambulatory participants, ages 4 to 7, in Sarepta’s open-label trial called study 101, and showed continued safety and tolerability of a one-time infusion of SRP-9001 at a dose of 2x1014 vg/kg. All adverse events (AEs) were considered mild or moderate, and occurred within 90 days of treatment. There were no serious AEs or signs of complement activation, Sarepta said.

‘Modest’ correction enough?

Still, Jantz conceded that Precision is “to a large extent trailblazing here. We don’t have clear guidance from the FDA.” His firm’s “mantra has been that we will hold ourselves to a higher standard and Eli Lilly will hold us to a higher standard than the FDA is going to hold us to.” The company will monitor diligently for any off-target effects. “As long as we’re doing that, I don’t think we’re going to have any difficulty with regulators,” he said. “We do have a very good relationship with the FDA by virtue of our interactions with the CAR T platform,” from which data are due soon.

On the matter of targets in DMD, Jantz said taking aim at exons 45-55 “makes a lot of sense. As we look beyond that mutation hot spot, the pie tends to get sliced up really small pretty quickly. The remaining 40% or so of mutations in the DMD population are scattered throughout the dystrophin gene. Practically speaking, I don’t know how much sense it would make to zero in on additional mutations” beyond the 45-55 zone, he said.

CEO Kane said Precision was “not going to get into timelines” for the launch of trials, and Jantz said the firm is busy optimizing the nucleases involved in the DMD push. “Producing an Arcus nuclease that’s therapeutic grade is a fairly involved process,” he said. “It takes a lot of time, it takes a lot of iterations. In parallel, we are working on vector optimization,” and the two efforts should “come together in the relatively near future.” Precision is responsible for early stage manufacturing and process development in the Lilly tie-up. “That will be getting underway shortly,” he said.

Others mentioned by Jantz in the gene therapy DMD space included New York-based Pfizer Inc. and Solid Biosciences Inc., of Cambridge, Mass. In October, the FDA placed Solid’s Ignite phase I/II trial with AAV9 gene therapy SGT-001 on clinical hold because of a serious AE. After consulting with the agency, the company expects to resume dosing in the first quarter of next year. Last month, Solid sealed a collaboration in DMD with Novato, Calif.-based Ultragenyx Pharmaceutical Inc., with the latter investing $40 million in Solid and promising up to $255 million in would-be milestone payments, plus tiered royalties on worldwide net sales at low double-digit to mid-teens percentages.

BTIG analyst Thomas Shrader probed the details of Precision’s Lilly deal in a report, calling it “dependent on making two genome cuts with compatible 3 nucleotide overhangs. These ‘sticky ends’ drive something called perfect re-ligation, and would be a challenge for CRISPR-based approaches. This new direction should be immediately impactful in liver-focused programs, while others – including the currently named DMD program – await targeting technologies for delivery away from [the] liver,” he wrote. On the upside, “modest correction may be enough in DMD (animal work is ongoing), and it sounds like both nucleases required for the DMD program are already built,” which he called “a non-trivial achievement.”

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