In biotech and biopharma’s third-largest ever up-front development and commercialization deal, Crispr Therapeutics AG will receive an initial $900 million in an amended deal with Vertex Pharmaceuticals Inc. to lead the development, manufacturing and commercialization of gene editing therapy CTX-001 for sickle cell disease (SCD) and transfusion-dependent beta-thalassemia (TDT).

A possible $200 million would come to Crispr on the early stage candidate’s first regulatory approval, popping the deal over the $1 billion mark.

Crispr will pay 40% of the costs of the autologous, CRISPR/Cas9-based therapy and in return receive 40% of the profits. Vertex picks up the remaining 60% of the costs and will pull in 60% of CTX-001’s profits from future global sales.

That’s where the original 2015 agreement between the two companies gets left behind, as it represents a 10% increase in the program’s economics compared to the previous deal.

Jeffrey Leiden, Vertex’s executive chairman, praised CTX-001’s “compelling clinical profile” that could lead to “a durable cure.”

J.P. Morgan analyst Cory Kasimov wrote that while Vertex management must have high commercial hopes for the deal, the company needs more than just this deal to find solid footing. Kasimov wrote that it needs a pipeline win for another program, VX-864, for treating alpha-1 antitrypsin (AAT) deficiency near term in the second quarter of 2021 or another “meaningful” business deal. There is also, he added, plenty of competition.

Crispr and Vertex reported CTX-001 data for both indications in December at the American Society of Hematology’s annual meeting.

Data from the phase I/II Climb-121 trial in SCD showed all three patients evaluable for efficacy had a similar pattern of response, with rapid and sustained increases in total hemoglobin and fetal hemoglobin, as well as elimination of vaso-occlusive crises (VOC) through last analysis. All three remained VOC-free with follow-up ranging from three to 15 months after infusion and had hemoglobin levels in the normal to near normal range at last visit, including total hemoglobin from 11.5 g/dL to 13.2 g/dL and fetal hemoglobin levels from 31.3% to 48%.

Data from the phase I/II Climb-111 study in TDT showed all seven patients were transfusion independent, with a follow-up ranging from three to 18 months after infusion. Bone marrow allelic editing data collected from four patients with months of follow-up and from one patient with 12 months of follow-up demonstrated a durable effect, the data showed.

CTX-001 was granted the EMA’s Priority Medicines designation for treating SCD in September.

While Vertex shares (NASDAQ:VRTX) rose nearly five-tenths of a percent on April 20 to close at $220.16 each, Crispr shares (NASDAQ:CRSP) closed at $121.67, up 5.76% on the day.

The original massive deal between Vertex and Crispr was struck in October 2015, when the two drew up an agreement worth more than $2.6 billion to use CRISPR/Cas9 for correcting mutations in the cystic fibrosis transmembrane conductance regulator gene – known to result in the defective protein that causes the disease – and to edit other genes that contribute to it. CTX-001 is the collaboration’s first potential treatment.

In that agreement, Crispr was to receive $105 million up front, including $75 million in cash and a $30 million equity investment. In return, Boston-based Vertex had the option to an exclusive license for up to six gene-based treatments that emerge from the collaboration. For each of the treatments in-licensed for development, Vertex would pay future development, regulatory and sales milestones of up to $420 million – potentially broadening the deal to $2.625 billion, plus royalties on product sales.

Compared to all similar licensing-type deals listed in Cortellis, including development and commercialization deals between biotech companies or those between biotech and pharma companies, only two have higher up-front payments.

In 2019, Gilead Sciences Inc. and Galapagos NV entered a 10-year R&D alliance. Galapagos received $3.95 billion up front plus another $1.1 billion in equity. In return, Gilead received an option to ex-European rights on everything emanating from Galapagos’ clinical and preclinical pipeline.

In 2018, Nektar Therapeutics Inc. signed an immuno-oncology deal with Bristol Myers Squibb Co. worth a potential $3.63 billion. The alliance provided Nektar with $1.85 billion up front – $1 billion in cash and the remainder through an $850 million purchase of about 8.28 million Nektar shares. The companies agreed to evaluate the potential of NKTR-214 with Opdivo (nivolumab) or Opdivo plus Yervoy (ipilimumab) in registration-enabling trials in more than 20 indications across nine tumor types. BMS obtained exclusive rights in the indications included in the joint development plan for a specified time period. Targeted indications include melanoma and renal cell carcinoma, non-small-cell lung cancer, bladder and triple-negative breast cancer.