Shares of CRISPR got a lift from the news.
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The biotech firm Vertex Pharmaceuticals is paying $900 million to CRISPR Therapeutics for rights to 60% of the profits from sales of a gene-editing therapy called CTX001. It will pay another $200 million if the treatment is approved by regulators.
CTX001 was developed jointly by Vertex (ticker: VRTX) and CRISPR (CRSP) under a collaboration that began in 2015. The therapy is being tested in Phase 1/2 trials to treat patients with sickle cell disease and beta thalassemia.
Under the terms of the new deal, Vertex will pay 60% of program costs and earn 60% of profits on the CTX001 program. Vertex said that the new arrangement represented a 10% increase compared with the economics of the previous deal.
Shares of Vertex were flat in premarket trading, while shares of CRISPR were up 7.6%. Shares of both companies are down so far this year, with CRISPR down 24.9% and Vertex off 7.2%.
“We see a significant commercial opportunity for CTX001, and we believe we will be able to further enhance that opportunity by fully leveraging the breadth of Vertex’s capabilities – including our established and proven R&D and commercialization expertise in serious diseases – to bring CTX001 to more patients around the world, more quickly,” said Vertex’s executive chairman and former CEO, Jeffrey Leiden, in a statement.
Vertex shares have struggled since mid-October, when the company canceled development of a once-promising drug. In a feature in early March, Barron’s called the stock an opportunity for investors, saying that the pullback had been overdone.
A Barron’s article in January on gene editing highlighted the collaboration between Vertex and CRISPR.
The deal may ease some speculation about Vertex’s business development plans. The company’s CEO, Dr. Reshma Kewalramani, worried some investors in early February when she said that the company was thinking about acquiring mid- and late-stage assets.
“Investors’ fear is that Vertex will get an interesting asset, but they’ll have to pay a lot of money and that will be dilutive,” Cowen analyst Phil Nadeau told Barron’s at the time.
Kwalramani told Barron’s that there was a “misunderstanding” around the plan’s thinking on acquisitions, and said that the Vertex “pipeline has never been stronger.” The CRISPR deal, a doubling down on an asset already in the pipeline, reaffirms her view.
CTX001 is being tested as a one-shot cure for transfusion-dependent beta thalassemia and severe sickle cell disease. In late December, the companies presented positive data on the therapy.
“We have now dosed more than 30 patients with CTX001, with longest follow-up beyond two years, and we are on track to complete enrollment in both clinical trials this year,” CRISPR CEO Samarth Kulkarni said in a statement on Tuesday. “Given the transformative results and momentum that we have generated with this program, we are adopting a new operating model to enable a globally coordinated launch of CTX001, leveraging Vertex’s best-in-class global capabilities and leadership in development, manufacturing, and commercialization to enable this medicine to reach all patients that can benefit from it as quickly as possible.”
Write to Josh Nathan-Kazis at [email protected]
