Applied Genetic Technologies Corporation (AGTC), a developer of adeno-associated virus (AAV)-based gene therapies, is being acquired by Syncona Limited. AGTCs initial focus has been on inherited retinal diseases (IRDs). Syncona will pay $23.5 million ($0.34 per share) in cash at the closing of the transaction plus potential future aggregate cash payments of up to $50.0 million (up to $0.73 per share). On closing, this will be the third company Syncona owns that is focused on gene therapy.
AGTC only has enough cash to last until the end of 2022, and has already tried cutting costs and a $10M fundraising. Its lead product. Is GTC-501which is in Phase II for X-linked retinitis pigmentosa (XLRP)—an incurable genetic condition that leads to blindness. They also have a treatment in development for another rare eye disease called achromatopsia and an experimental process for addressing retinal degeneration called optogenetics.
“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 Scott Koenig, Chairman of AGTC’s board of directors.
He added that, “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.”
“Our team has completed groundbreaking work for patients living with devastating retinal diseases,” said Sue Washer, President and Chief Executive Officer of AGTC. “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.”
“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.”
Syncona oversaw the sale of retinal companies Nightstar to Biogen for $877 million in 2019 and Gyroscope to Novartis last year for $800 million upfront. Syncona currently major shareholder in three gene therapy companies: liver-focused Freeline, kidney-focused Purespring, and neurological-focused Swan Bio.
The $0.34 per share price 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 was unanimously approved by AGTC’s board of directors and is expected to close in the fourth quarter of 2022.
AGTC is advancing multiple pipeline candidates in optogenetics, otology and CNS disorders. It has entered into strategic collaborations with companies including Bionic Sight, an innovator in the emerging field of optogenetics and retinal coding, and Otonomy, biopharmaceutical company dedicated to the development of innovative therapeutics for neurotology.
