Close

Gene Therapy Transactions Give Wall Street Cautious Optimism

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from any location or device.

Media Packs

Expand Your Reach With Our Customized Solutions Empowering Your Campaigns To Maximize Your Reach & Drive Real Results!

– Access the Media Pack Now

– Book a Conference Call

– Leave Message for Us to Get Back

Related stories

Pharmacy’s Impact on Reducing Medication Errors in Hospital Settings

Medication errors are a big problem in healthcare because...

How to Dispose of Pharmaceutical Waste

Proper pharmaceutical waste disposal is crucial for protecting our...

Semaglutide 101: What You Need to Know About This Game-Changing Medication

In the realm of modern medicine, breakthroughs are not...

Health Benefits of Pre-work Supplements

Whether you are a workout expert or just starting...

Gene therapy remains a topic of fascination to biopharmaceutical dealmakers despite safety worries and opposition from drug regulators, as seen by a recent flurry of deals.

Eli Lilly agreed to purchase Akouos, a Boston-based company that develops gene therapies for hearing loss, in a deal that might be worth more than $600 million in the middle of October. On October 23, less than a week later, Applied Genetic Technologies Corp. announced that Syncona, a life sciences investment firm, would buy it and take it private.

The pharmaceutical company Astellas Pharma, with headquarters in Japan, then disclosed that it had invested $50 million in Taysha Gene Therapies, a company that is developing therapies for uncommon neurological illnesses.

These purchases are seen as a sign of hope by some on Wall Street for a medicinal research field that generated a lot of excitement a few years ago but has since experienced disappointments. The Food and Drug Administration scrutinised safety concerns like those found in clinical trials conducted by Pfizer, UniQure, Bluebird Bio, and others, and last year organised a special meeting to explore the dangers of gene therapy.

However, safety hasn’t been the only problem. Recent important trials evaluating the efficacy of investigational drugs by Biogen, Sarepta Therapeutics, and Amicus Therapeutics failed. Additionally, Editas Medicine experienced a decline in the value of its firm shares after receiving encouraging, albeit preliminary, findings from research on its CRISPR-based gene editing medicine.

The recent spate of agreements, according to Dae Gon Ha, an analyst at the financial services company Stifel, might be considered a boon for gene therapies aimed at treating uncommon disorders. In a letter to clients dated October 25, he stated, they agree that a blitz of mergers and acquisitions in such a short timeframe can provide a much-needed sentiment change to a sector that’s been in investors’ bad books for much of 2022.

Ha added that these agreements do not always mean that the field of gene therapy is out of the woods yet. He cited the fact that the value of these transactions is considerably smaller in comparison to other, more recent agreements aimed at various drugmaking technologies as well as the gene therapy acquisitions made public a few years ago, such as those of AveXis and Spark Therapeutics.

These reduced deal prices may have been influenced by a number of things. Over the past few years, gene therapy research has received a record amount of funding, which has prompted the establishment of more businesses, many of which are still quite tiny. For instance, Akouos, which was established in 2016, had just over 100 employees as of the end of February.

However, with increased competition and a record decline in the biotechnology stock market, finding money has become more difficult, pushing a number of businesses to reduce expenses and staff. As a result, certain gene therapy developers might be more open to taking into account lower-cost proposals. Cantor Fitzgerald, an investment company, looked at five gene therapy purchases, including Lilly’s intended acquisition of Akouos, and discovered that the more recent ones took longer to reach a final cost agreement. The majority of this, according to Cantor analyst Kristen Kluska’s team, is likely caused by recently weaker market circumstances.

Given the obstacles the gene therapy industry has encountered, the newest acquisitions may also indicate that investors are more keen on programmes that have been somewhat de-risked. According to regulatory records, Lilly revived takeover discussions after the FDA granted Akouos permission to start testing its most cutting-edge medicine on humans in September. Like other gene therapy acquisitions, Akouos had a specific focus. While Audentes Therapeutics and Prevail Therapeutics, which were acquired by Astellas and Lilly respectively, focused their research on neurological problems, Nightstar Therapeutics, which Biogen acquired for about $800 million, was investigating medicines exclusively for eye diseases.

Despite the warnings, Ha believes that the three purchases from the previous month may at least indicate that investors and purchasers are becoming more confident in the risk/reward balance of gene therapy, firms’ compelling valuation, or both.

As a whole, Ha stated, recent transactions and announcements are obviously optimistic for the industry, but they believe more enthusiasm is muted by the acquirer’s asset selection, capital engagement, and what the acquirer eventually brings to the board.

Latest stories