Syncona to acquire Applied Genetic Technologies Corporation
Founded in 1999, Florida-based AGTC is a clinical-stage biotech focusing on the development and commercialization of adeno-associated virus (AAV)-based gene therapies for rare diseases.
Its initial focus is on inherited retinal diseases (IRDs), with its lead candidate AGTC-501 currently gearing up for a Phase 2/3 trial for patients with X-Linked Retinitis Pigmentosa (XLRP). However, the company was facing financial challenges in progressing with the trial and funding its wider pipeline.
Syncona – a healthcare company focused on ‘founding, building and funding global leaders in life science’ – will acquire AGTC for around $23.5m in cash with the potential of future aggregate payments of up to $50m pursuant to contingent value rights.
'This transaction allows continued progress in advancing an important therapy for XLRP patients'
The board of directors of AGTC have unanimously recommended that the shareholders of AGTC tender their shares in the tender offer once it is commenced.
“This transaction represents an attractive upfront cash offer to shareholders at a premium of approximately 42% to the current share price, with the potential to receive future upside based on the clinical success of XLRP and other pipeline assets through CVRs,” said Dr. Scott Koenig, Chairman of AGTC’s board of directors.
“Our board and leadership team evaluated all alternative options to progress AGTC-501. Given the state of equity and other funding markets, we see significant challenges in funding ongoing operations beyond 2022. We believe that this transaction clearly will deliver the best value to our shareholders.
"AGTC’s board of directors has unanimously approved the offer and strongly encourages shareholders to tender their shares.”
Sue Washer, President and Chief Executive Officer of AGTC, added: “This transaction allows continued progress in advancing an important therapy for XLRP patients while also maximizing immediate and potential long-term value to our shareholders.
"On closing, AGTC will be Syncona’s third company focused on retinal gene therapy, and we look forward to transitioning AGTC-501 to Syncona’s experienced stewardship with the goal of advancing this differentiated product candidate to patients with XLRP.”
Syncona builds gene therapy portfolio
Syncona’s £526m ($600m) life science portfolio includes gene therapy companies Freeline Therapeutics (clinical stage), SwanBioTherapeutics and Purespring Therapeutics. Earlier this year, it completed the sale of eye disease gene therapy company Gyroscope Therapeutics to Novartis for up to $1.5bn; while in 2019 it sold retinal disease gene therapy company Nightstar to Biogen for $877m.
“We share AGTC’s passion in developing life changing treatments for patients with diseases with no currently approved therapies,” said Chris Hollowood, Chief Investment Officer of Syncona Investment Management Limited. “Syncona has significant expertise in AAV gene therapy, and in particular, a strong track record of building retinal gene therapy businesses. We believe AGTC’s XLRP program has the potential to be a best-in-class product that could transform the lives of patients suffering with this devastating blinding condition.”
The upfront cash consideration in the transaction will consist of $0.34 per share of AGTC common stock (including common stock underlying restricted stock units and in-the-money stock options). AGTC equity holders will also receive in the transaction, for each share of AGTC common stock, one non-tradeable CVR. The $0.34 per share represents a premium of approximately 42% and the potential for up to $1.07 per share (inclusive of the potential CVR value) represents a premium of up to approximately 344% over AGTC’s closing stock price on October 21, 2022.
The transaction is expected to close in the fourth quarter of 2022.