Vertex Pharma Shells Out $420M to Move Into Muscular Dystrophy

Vertex Pharmaceuticals is committing $420 million in a pair of deals that expand the company’s research scope to experimental genetic treatments for two forms of muscular dystrophy.

Boston-based Vertex (NASDAQ: [[ticker:VRTX]]) announced late Thursday that it reached an agreement to pay $245 million up front to acquire Exonics, a company using gene editing techniques to develop a treatment for Duchenne muscular dystrophy and myotonic dystrophy type 1. Vertex also said it is paying CRISPR Therapeutics (NASDAQ: [[ticker:CRSP]]) $175 million up front to expand an existing research collaboration to include Duchenne and myotonic dystrophy type 1.

Watertown, MA-based Exonics Therapeutics is developing treatments intended to use CRISPR-Cas9 gene editing technology to repair the genetic mutations that cause Duchenne and other neuromuscular diseases. Vertex says Exonics’ preclinical research has demonstrated the ability to genetically repair and restore dystrophin, the key missing protein that leads to Duchenne.

Exonics licensed its technology from the University of Texas Southwestern Medical Center, where it was developed in the laboratory of molecular biologist Eric Olson. Vertex says Olson will continue in his role as Exonics’ chief science advisor. Under the acquisition terms, Exonics will operate as a Vertex subsidiary. Exonics shareholders could earn up to $755 million in additional payments, depending on the progress of its Duchenne and myotonic dystrophy type 1 programs.

Vertex has been working with Switzerland-based CRISPR Therapeutics since 2015. The collaboration initially focused on cystic fibrosis, a core therapeutic focus of Vertex. But the partners have since gone on to advance to the clinic a genetically engineered therapy for sickle cell disease and beta thalassemia, an inherited disorder affecting hemoglobin in the blood.

The expanded collaboration gives Vertex exclusive global rights to the CRISPR Therapeutics’ gene editing technology in Duchenne and myotonic dystrophy type 1. In Duchenne, Vertex will be responsible for all research and development, manufacturing, and if approved, commercialization. In myotonic dystrophy type 1, Vertex and CRISPR Therapeutics will share the research costs for RNA research that will be conducted by the Swiss company. Vertex will be responsible for additional R&D, as well as manufacturing, and commercialization expenses.

Depending on the progress of the Duchenne and myotonic dystrophy programs, CRISPR Therapeutics could earn up to $825 million in additional payments. If the experimental therapies reach the market, Vertex would pay CRISPR Therapeutics royalties from sales.

Vertex expects to close both deals in the third quarter of this year.

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