Edgewise Therapeutics will now focus on a handful of cardiovascular programs including EDG-7500 for hypertrophic cardiomyopathy thanks to the non-dilutive capital from France’s Servier.
Servier is buying Edgewise Therapeutics’ muscular dystrophy business for up to $2.65 billion, the second multi-billion-dollar rare disease deal from the French pharma this year after snapping up Day One Biopharmaceuticals in March.
Servier will pay $1.55 billion upfront with $1.1 billion down the line in potential milestone payments to gain access to Edgewise’s fast skeletal myosin inhibitor sevasemten and related capabilities, according to Servier’s Monday morning release.
The drug is being tested in the Phase 3 GRAND CANYON trial for Becker muscular dystrophy (BMD) and in Phase 2 for Duchenne muscular dystrophy (DMD). Both diseases are X-linked genetic disorders that cause progressive loss of muscle function, with DMD characterized as more severe with a life expectancy of about 30 years, according to Servier.
In March, Edgewise presented data at the Muscular Dystrophy Association meeting showing the potential for improved functional performance on sevasemten. If ultimately approved, the therapy would be the first available for BMD. DMD, on the other hand, has some limited options including products from Sarepta Therapeutics, but plenty of unmet need remains in the space.
“This transaction is designed to place the program in the hands of an organization with the experience and infrastructure to support its continued development for people living with Becker and Duchenne muscular dystrophies,” Edgewise CEO Kevin Koch said in a statement.
This is the second time this year Servier has struck an acquisition in the neuro space after buying all of Day One a few months ago. That transaction, worth $2.5 billion, centered on the FDA-approved pediatric brain cancer asset Ojemda.
Servier is focused on oncology, neurology and cardiometabolic diseases.
With the muscular dystrophy business gone, Edgewise will center its efforts around its cardiovascular programs, with proceeds from the Servier transaction fully funding hypertrophic cardiomyopathy asset EDG-7500 through potential approval, according to a separate release from Edgewise.
Stifel declared the deal “surprising—and very favorable.” Truist Securities called it “a good deal,” providing Edgewise with non-dilutive capital and sharpening the pipeline.
The biotech’s shares rose more than 15% to $39.53 as the markets opened Monday.
Edgewise’s cardiovascular work had been investors’ focus anyway, with “sevasemten either under the radar or met with skepticism,” Truist noted. The firm believes the BMD indication could achieve worldwide unadjusted peak sales of $1 billion but provided no estimate for DMD.
“Given the focus on EDG-7500, sevasemten has gotten little attention and we think generally many (including us) were relatively skeptical on BMD,” Stifel wrote. “As such, $1.55B upfront (with none of the clinical risk) is a big win and ascribes more value than what we think was in the stock.”
Last year, the FDA declined to review an early application for sevasemten based on data from the Phase 2 CANYON study.
Twelve-week data from the Phase 2 CIRRUS-HCM trial of EDG-7500 are due in the second quarter of the year, Edgewise reported on Monday. These data are expected to inform the company’s Phase 3 plans, with a trial set to initiate in the fourth quarter.
The company is also working to initiate a Phase 2 trial of EDG-15400 in heart failure with preserved ejection fraction.
With the riskier sevasemten program out of the way, Stifel now believes Edgewise has been tidied up for a potential acquirer interested in the cardiovascular programs.
