Latest Editas research pact could be worth up to $1B
Editas Medicine could earn upwards of $1 billion in milestone payments through a research and development alliance that it recently struck with Allergan, according to a spokeswoman for the Cambridge gene editing firm.
Editas (Nasdaq: EDIT) announced on March 14 that it would receive $90 million up front in exchange for giving Allergan (NYSE: AGN) the option to license up to five preclinical programs targeting eye disease — a relatively modest sum. At the time, the companies did not disclose the amount of potential future payments that Editas will be eligible to receive if the drugs meet certain development and commercial milestones.
On Wednesday, a spokeswoman for Editas said that the company would be eligible to receive more than $200 million on each program that Allergan exercises its option to license. That means the company could get a hypothetical maximum of $1 billion.
“Key for Editas is that we established this alliance in line with our strategy to build a company for the long-term,” the spokeswoman said. “This relationship helps build the company for the long-term with the $90 million upfront payment and the potential to receive significant research, development and commercial milestones, as well as royalties on product sales for each program Allergan licenses.”
Milestone payments are a common part of biotech transactions. Many in the industry dismissively refer to them as “biobucks” because the figures are often large and rarely pan out.
Still, biobucks can be an indication of how highly a company values certain technology, or how confident it is that certain drugs will succeed. Editas has yet to test any of its experimental treatments in a clinical trial, but it has emerged as a leader in the much-hyped field of gene editing, a method of cutting out and replacing parts of genes that has the potential to revolutionize the treatment of serious genetic disorders.
Editas has another research collaboration deal with Seattle-based cancer drug developer Juno Therapeutics (Nasdaq: JUNO) that could generate up to $700 million in milestone payments for the Cambridge biotech. Recently, Editas was on the winning side of a high-profile patent dispute over the rights to the so-called CRISPR/Cas9 technology, which the company licenses from the Broad Institute of MIT and Harvard.
The pact with Allergan includes Editas’ lead program targeting eye disease, an effort to treat a rare condition called LCA10 that causes blindness. The Irish drugmaker has the option to license up to five programs, and would be responsible for developing and commercializing at least some of them.