Novartis buys ocular gene therapy firm for US$1.5 billion

SWITZERLAND – Novartis has agreed to pay up to US$1.5 billion for Gyroscope Therapeutics, a U.K.-based ocular gene therapy company, as the pharmaceutical giant seeks to acquire smaller companies with promising drug pipelines.

According to a statement released by the company, the Swiss pharmaceutical company will pay an upfront payment of US$800 million as well as potential additional milestone payments of US$700 million.

Gyroscope has been working on a more specific experimental gene therapy for geographic atrophy, a type of age-related macular degeneration that is the leading cause of vision loss in people over the age of 60.

There are currently no FDA-approved treatments for geographic atrophy. Gyroscope is designed to treat the disorder by addressing the overactive immune system activity that is associated with progressive vision loss.

The goal is to preserve a patient’s vision by increasing production of the key protein and decreasing inflammation.

The acquisition, according to Novartis, will strengthen the company’s capabilities in retinal diseases and gene therapy.

There are currently no approved treatments for the 8 million people who suffer from geographic atrophy, according to the press release.

The majority of Novartis’s gene therapy pipeline is the result of acquisitions. The Novartis Gene Therapies division was acquired by the pharma giant in 2018 for US$8.7 billion as part of the AveXis acquisition.

AveXis’ lead program was the spinal muscular atrophy gene therapy Zolgensma, but the company also brought Novartis additional programs in earlier stages of development.

Novartis announced in December, that it planned to repurchase up to US$15 billion in shares with proceeds from the sale of its stake in Roche Holding AG.

Drug companies have rushed to invest in gene therapies because they could be one-time treatments for a wide range of difficult conditions.

The experimental treatments work by inserting genetic material into a person’s cells and instructing them to produce proteins that can treat or prevent disease.

Strengthening gene therapy portfolio

Novartis’ gene therapy pipeline has been bolstered by additional acquisitions. In 2020, it paid US$280 million for Massachusetts-based Vedere Bio, and in 2021, it paid an undisclosed sum for Swiss start-up Arctos Medical.

Both companies were working on gene therapies to restore vision by instructing eye cells to produce light-sensing proteins.

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.

The Gyroscope acquisition is Novartis’ first since it returned a stake in its Swiss rival Roche to the company in November for US$20.7 billion.

The two have almost immediately resumed their competition as Roche has paid US$50 million for Lineage Cell Therapeutics’ experimental cell-based therapy drug for a blinding eye condition.

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