Biogen to Pay Applied Genetic $124 Million to Develop Eye-Disease Treatments

Biogen Inc. will pay Applied Genetic Technologies Corp. $124 million for license and commercialization rights to several of its gene-based therapies.

Shares of AGTC increased by 17% in recent trading. Shares of Biogen were relatively flat.

The $124 million includes a $30 million equity investment at a price of $20.63 a share. Biogen also has the option to license discovery programs for three additional indications.

AGTC is eligible to receive milestone payments totaling more than $1 billion. This includes up to $472.5 million for the two lead programs and most of the rest coming from payments for the potential discovery programs.

The two lead programs covered in the agreement are a clinical candidate for a disease called X-linked Retinoschisis and a preclinical treatment for X-Linked Retinitis Pigmentosa. These are diseases of the retina that can cause blindness in men.

AGTC Chief Executive Sue Washer said the collaboration would "support the development of new therapies that may allow for transformative treatments for these rare inherited eye diseases."

Alachua, Fla-based AGTC specializes in developing gene-therapy treatments for eye disease. Gene therapy is still a new field. The most common form of the treatment takes healthy DNA, packages it within a vector—a biological delivery mechanism—and then delivers the vector into the body to replace diseased genes with the healthy DNA.

Massachusetts-based Biogen has been in search of new products to drive sales growth following the successful 2013 launch of its multiple-sclerosis therapy Tecfidera. In its latest quarter, slowing growth of Tecfidera led to lower-than-expected profit and revenue growth.

Shares of Biogen have increased about 19% this year through Wednesday's close.

The deal is expected to close in the third quarter.

Write to Angela Chen at [e-mail]

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