Pharmaceutical firm Novartis has agreed to purchase Gyroscope Therapeutics, a UK-based ocular gene therapy developer backed by conglomerate Fosun, for up to $1.5bn, indicating an alternative to flotations for life sciences exits.
Founded by University of Cambridge and life science investment firm Syncona, Gyroscope is working on gene therapy treatments for geographic atrophy, which is an advanced form of dry age-related macular degeneration, a condition with no currently approved treatments that can lead to irreversible vision loss.
Novartis is set to pay $800m upfront and potentially up to $700m in milestone payments once the transaction closes. The announcement of the deal comes seen months after Gyroscope withdrew from an initial public offering which would have valued it at $614m at the middle of its price range.
Although announcements of IPO cancellations typically cite unfavourable market conditions, Gyroscope chief executive Khurem Farooq said in May it had decided to cancel the offering due to positive feedback from investors who were bullish over its drug pipeline, leading him to believe he could get a better return if the company waited.
Looking at offerings for other gene therapy developers this year, Omega Therapeutics’ share price rose post-IPO but has halved since its late October peak. Sana Biotechnology, which floated in February in the largest offering so far for a preclinical life sciences company, has seen its own share price fall from a $39.87 peak that month to close at $15.72 yesterday.
The flurry of biotech IPOs over the past two years has led to a surfeit of publicly listed companies in the sector, many of which are still to bring a product to market. Larger pharmaceutical players will likely look to pick up bargains in that area, but it also means an IPO may not be the best way to a profitable exit.
Marie-France Tschudin, president of Novartis subsidiary Novartis Pharmaceuticals, said: “With our own pioneering research in ocular gene therapies and our experience gained from bringing (gene therapy) Luxturna to inherited retinal dystrophy patients outside of the US, Novartis has a well-established expertise in ocular gene therapies that will position us well to continue developing this promising one-time treatment.
“This acquisition is one more step forward in our commitment to delivering innovation in ophthalmology to treat and prevent blindness worldwide.”
Gyroscope had raised over $209m as of a $148m series C round in March this year led by Forbion and backed by Fosun subsidiary Fosun Pharma, Syncona, Cambridge Innovation Capital, Sofinnova Investments and Tetragon Financial Group.
Photo courtesy of Gyroscope Therapeutics Limited.
