Applied Genetic Surges on $1 Billion+ Eye Deal With Biogen
August 20, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Gainesville, Fla.-based Applied Genetic Technologies Corporation announced yesterday that its collaboration with Biogen, Inc. has now closed. Originally announced on July 2, 2015, the deal has met all the conditions under the Hart-Scott-Rodino Antritrust Improvements Act of 1976 and is good to go.
The deal, announced in July, was a collaboration and licensing agreement to develop gene-based therapies for several ophthalmic diseases. The two companies will focus on developing AGTC’s portfolio of clinical and pre-clinical candidates for orphan diseases of the retina. It also included options for early-stage programs for two ophthalmic diseases and one non-ophthalmic disease.
Biogen made an upfront payment of $124 million to AGTC, as well as an equity investment at $20.63 per share totaling $30 million, as well as some prepaid research and development costs. As part of the deal, Biogen holds a license to AGTC’s XLRS and XLRP programs and an additional three licenses.
As part of the agreement, AGTC could receive more than $1 billion in upfront and milestone payments, as well as up to $473 million for the two lead programs. Royalties are in the high single digit to mid-teens on net sales.
“We are excited to combine our deep experience in gene therapy and ophthalmology with Biogen’s strong track record of developing and marketing therapies for complex and rare diseases,” said Sue Washer, chief executive officer of AGTC in a statement. “This collaboration will provide many synergies, enabling us to accelerate our lead programs for the treatment of X-Linked Retinoschisis (XLRS) and X-Linked Retinitis Pigmentosa (XLRP), two ocular conditions with significant unmet needs, and three discovery programs, including a non-ophthalmic condition. In addition, we now have expanded resources to accelerate the development of several internal programs, including our program for the treatment of achromatopsia.”
has been moderately volatile over the last year. Shares traded for $15.51 on Sept. 4, 2014, rose to $26.20 on Nov. 7, dropped back to $20.18 on Dec. 12, then jumped again to $24.98 on Jan. 30, 2015. Shares then drifted down to $15.82 on May 5, up again to $19.77 on June 15, back down to $14.52 on June 29 and up to $19.50 on July 13. Shares are currently trading for $15.51.
Investor Newswire reported yesterday that AGTC was an “earnings surprise,” defined as when the quarterly report was very different from consensus analyst estimates. The company at its most recent quarterly report showed “an earnings surprise of -15.15 percent when the firm last announced their results for the period ending on Mar. 31, 2015.” An analysts consensus for the next quarterly earnings on Sept. 25, is $-0.41 per share, based on five analysts reviewed by Zacks.
Last week, Chardan Capital gave the company a “buy” rating. Zacks analysts provided a short-term rating of “buy.” OTC Outlook indicates that AGTC stock dropped 11.81 percent from mid-July to mid-August, fell 4.2 percent in the last three months, and the “Year-to-Date … stock performance stands at -22.93 percent.”