Biogen to Acquire Nightstar Therapeutics

Biogen has entered into an agreement to acquire Nightstar Therapeutics, a clinical-stage gene therapy company based in London, United Kingdom, which is focused on adeno-associated virus (AAV) treatments for inherited retinal disorders. Under the terms of the proposed acquisition, Biogen will pay $25.50 in cash for each NST share. This offer represents a total transaction value of approximately $800 million on a fully diluted basis, after taking into account expected transaction expenses and anticipated cash at closing.

"Ophthalmology is an emerging growth area for Biogen, and we are excited about the opportunity to work with the talented employees at Nightstar to advance potentially transformative gene therapy programs for rare retinal diseases," said Michel Vounatsos, Biogen’s Chief Executive Officer. "With this proposed acquisition, we are continuing to bolster our pipeline and further execute on our strategy to develop and expand a multi-franchise neuroscience pipeline across complementary modalities. Nightstar would accelerate our entry into ophthalmology by contributing two mid- to late-stage gene therapy assets, with the potential to create long-term shareholder value."

NST’s lead asset is NSR-REP1 for the treatment of choroideremia (CHM), a rare, degenerative, X-linked inherited retinal disorder, which leads to blindness and has no approved treatments. CHM primarily affects males and is caused by loss of function in the CHM gene which encodes the Rab escort protein-1 (REP-1). The REP-1 protein plays a role in intracellular protein trafficking, and loss of function in the CHM gene leads to abnormal intracellular protein trafficking and impaired elimination of waste products from the retinal pigment epithelium and photoreceptors. Initially, patients with CHM experience poor night vision, and over time progressive visual loss ultimately leads to complete blindness.

NSR-REP1 is comprised of an AAV vector administered by subretinal injection which provides a functioning CHM gene and expression of the REP-1 protein to restore membrane trafficking and thereby slow, stop, or potentially reverse the decline in vision. Data from the Phase 1/2 trial of NSR-REP1 demonstrated potentially meaningful slowing of decline in visual acuity as compared to natural history as well as signs of improved visual acuity in some patients. NSR-REP1 is currently being evaluated in the ongoing Phase 3 STAR trial with data expected in the second half of 2020.

NST’s second clinical program is NSR-RPGR for the treatment of X-linked retinitis pigmentosa (XLRP), which is also a rare inherited retinal disease primarily affecting males with no approved treatments. XLRP is characterized by mutations in the retinitis pigmentosa GTPase regulator (RPGR) gene leading to a lack of active protein transport in photoreceptors. This abnormality leads to loss of the photoreceptor cells, resulting in retinal dysfunction by adolescence and early adulthood, progressing to legal blindness when patients reach their 40s.

NSR-RPGR is comprised of an AAV vector administered by subretinal injection which provides a functioning RPGR gene and thus expression of the RPGR protein, which is critical for protein transport in photoreceptors. The restoration of photoreceptor function is intended to slow, stop, or potentially reverse the decline in vision. Phase 1/2 data from the dose escalation portion of the XIRIUS trial for NSR-RPGR demonstrated an increase in central retinal sensitivity. The Phase 2/3 dose expansion portion of the XIRIUS trial is currently ongoing.

NST’s preclinical pipeline includes NSR-ABCA4 for Stargardt disease and potential programs targeting Best vitelliform macular dystrophy (Best disease) and other genetic forms of retinitis pigmentosa.

The acquisition of NST is planned to be funded through available cash and accounted for as an acquisition of a business. Biogen expects to complete the acquisition by mid-year 2019.

It is intended that the proposed acquisition will be implemented by means of a U.K. Court-sanctioned scheme of arrangement under Part 26 of the U.K. Companies Act 2006. The closing of the proposed acquisition is subject to customary closing conditions, including the approval by NST shareholders, the issuance of an order by the U.K. Court and receipt of regulatory approvals. The proposed acquisition does not require the approval of Biogen’s stockholders.

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