Kyowa Kirin to buy Orchard Therapeutics for $387M, expanding gene therapy portfolio

Kyowa Kirin to buy Orchard Therapeutics for $387M, expanding gene therapy portfolio

Kyowa Kirin has responded to the need to strengthen its late-phase pipeline by finalizing a deal to acquire Orchard Therapeutics for an upfront payment of $387.4 million. This acquisition will provide Kyowa with control over a gene therapy that is expected to secure approval in the US in March.

Orchard Therapeutics, like many gene therapy companies, has faced challenges in the public markets, with its stock price plummeting by over 95% since its 2018 IPO. However, recent positive developments, including the FDA’s acceptance of an approval application for its gene therapy for early-onset metachromatic leukodystrophy, have led to a resurgence in investor interest. This acquisition values Orchard Therapeutics at a level it last achieved in 2021.

The key asset gained through this acquisition is OTL-200, a gene therapy for early-onset metachromatic leukodystrophy known as Libmeldy in Europe. Libmeldy generated $6.6 million in revenue in the second quarter and is expected to be a significant addition to Kyowa’s portfolio.

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“We are excited to announce that we have signed the Transaction Agreement to acquire Orchard Therapeutics, one of the leading providers of HSC gene therapy. With this transaction, we anticipate being able to use a new modality that can have a profound impact on patients’ lives. Orchard Therapeutics is a company with a steady track record in this field and has already launched its HSC gene therapy in Europe and filed for review in the US. Our hope is to combine the strengths of Kyowa Kirin and Orchard Therapeutics with mutual respect to realize the successful creation and delivery of life-changing value for patients living with rare and life-threatening inherited diseases.”

– Takeyoshi Yamashita, Ph.D., Director of the Board, chief medical officer, senior managing executive officer of Kyowa Kirin

Kyowa aims to leverage the value of Libmeldy while expediting the development of its gene therapy pipeline, which includes treatments for rare diseases like mucopolysaccharidosis type I and type IIIA, as well as more common conditions such as frontotemporal dementia and a form of Crohn’s disease. This strategic move will help Kyowa strengthen its pipeline, which had previously faced setbacks with the discontinuation of certain assets.

The acquisition reflects Kyowa’s proactive approach to enhance its late-stage portfolio and address gaps in its pipeline following the discontinuation of specific candidates. Kyowa has agreed to an initial payment of $16 per share for Orchard Therapeutics, with an additional $1 per share contingent on FDA approval of OTL-200. If FDA approval is granted, the deal’s total value could reach $477.6 million.

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“This is an exciting opportunity designed to accelerate the realization of our shared vision of ending the devastation caused by severe genetic diseases and deliver life-changing value in medical care. We remain as true to our mission as ever, and joining Kyowa Kirin’s global network ensures we are well-resourced to progress anticipated commercialization of OTL-200 in the US, if approved, continue investing in initiatives aimed at accelerating Libmeldy growth in Europe, capitalize on opportunities for global expansion, as well as advance our next-in-line neurometabolic programs in MPS disorders and earlier-stage research programs. We look forward to collaborating with our new colleagues at Kyowa Kirin to fully unlock the curative potential of HSC gene therapy for the benefit of patients and society.”

– Bobby Gaspar, co-founder and chief executive officer of Orchard Therapeutics

Even at the initial price of $16 per share, the acquisition represents a significant premium compared to Orchard Therapeutics’ trading price, which had been around $5 for most of the year but surged to $8 before reaching $16 upon news of the Kyowa buyout.

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