Novartis is again turning to acquisitions to build up its gene therapy pipeline, this time committing up to $1.5 billion to buy Gyroscope Therapeutics, a clinical-stage company with a lead candidate addressing a vision disorder that leads to blindness.
According to financial terms announced Wednesday, Novartis is paying Gyroscope $800 million up front. Depending on the progress of Gyroscope’s therapies, that company’s shareholders could receive up to $700 million more in milestone payments.
London-based Gyroscope develops gene therapies for eye disorders. The company’s most advanced program is an experimental treatment for geographic atrophy. It’s an advanced form of dry age-related macular degeneration, in which a part of the retina called the macula deteriorates, leading to vision loss. That condition can progress to geographic atrophy, in which patients lose their central vision.
There are no FDA-approved therapies for geographic atrophy. Gyroscope aims to treat the disorder by addressing overactive immune system activity associated with the progressive vision loss. A subset of geographic atrophy patients have genetic variants that drive excessive activity of the complement system, a part of the immune system.
The Gyroscope therapy, GT005, is designed to get retinal cells to produce more of a protein key to restoring balance to the complement system overactivity that’s associated with the progression of age-related macular degeneration and geographic atrophy. By increasing production of the key protein and reducing inflammation, the goal is to preserve a patient’s eyesight. The gene therapy, intended to be a one-time treatment, is currently in Phase 2 testing.
Novartis’s gene therapy pipeline is largely the product of acquisitions. The division of the company now known as Novartis Gene Therapies came to the company via the $8.7 billion acquisition of AveXis in 2018. The spinal muscular atrophy gene therapy Zolgensma was AveXis’s lead program, though the company also brought to Novartis additional programs in earlier stages of development.
Other acquisitions have filled out Novartis’s gene therapy pipeline. Last year, the company paid $150 million up front to buy Vedere Bio, a preclinical biotech developing vision loss gene therapies. In September, Novartis paid an undisclosed sum to buy Arctos Medical, a startup with a preclinical gene therapy candidate as well as proprietary technology with potential for addressing many types of inherited retinal dystrophies. The Swiss pharma giant also has experience with eye gene therapies through a co-commercialization agreement for Luxturna, a Roche gene therapy for an inherited vision loss disorder.
“With our own pioneering research in ocular gene therapies and our experience gained from bringing Luxturna to inherited retinal dystrophy patients outside of the U.S., Novartis has a well-established expertise in ocular gene therapies that will position us well to continue developing this promising one-time treatment” said Marie-France Tschudin, president of Novartis Pharmaceuticals, said in a prepared statement.
Gyroscope was founded in 2016. In addition to GT005, the company also has other retinal disease gene therapies in earlier stages of development for retinal diseases. According to securities filings, venture capital-backed Gyroscope had raised more than $259.3 million in financing. The most recent financing was a $148 million Series C round in March, which came in advance of a filing for a U.S. IPO. Gyroscope dropped its IPO plans in May. Last month, Gyroscope struck up a deal with Sanofi, which committed to invest up to $60 million in the biotech. The agreement gave Sanofi the right of first refusal to negotiate future transactions involving GT005 in unspecified geographic markets.
Photo by Flickr user Ken Teegardin via a Creative Commons license
