Sarepta & Lysogene Announce Exclusive License Agreement

Sarepta Therapeutics, Inc. recently announced it has signed a license agreement with Lysogene (FR0013233475 – LYS), a pioneering biopharmaceutical company specializing in gene therapy targeting central nervous system (CNS) diseases, for the development of a gene therapy, LYS-SAF302, to treat Mucopolysaccharidosis type IIIA (MPS IIIA). Under the terms of today’s agreement, Sarepta will also have certain option rights to an additional CNS-targeted gene therapy candidate.

Under the terms of the license, Lysogene shall be responsible for completion of the pivotal trial, which is set to commence in the fourth quarter of 2018. Sarepta shall have exclusive commercial rights to LYS-SAF302 in the United States and all territories outside of Europe, and Lysogene will retain exclusive commercial rights to LYS-SAF302 in Europe. Sarepta will be responsible for global manufacturing of LYS-SAF302 and will supply Lysogene for its territory.

In 2018, Sarepta will make committed cash payments to Lysogene totaling $26 million (€22 million) plus the purchase of Lysogene equity for $2.5 million (€2.2 million). In 2019, Sarepta will pay Lysogene up to an additional $19 million (€16 million).

Payments from Sarepta to Lysogene for all items, if all milestones are met, would total approximately $125 million (€108 million) plus royalties. The financial terms of the agreement significantly extend Lysogene’s cash runway, enabling the company to continue the development of its other assets.

“We stand together today with the MPS community and Lysogene in service of a common goal of developing what could be a transformative therapy for this cruel disease,” said Doug Ingram, Sarepta’s President and Chief Executive Officer. “As with our other therapies targeted to serious, life-altering genetic diseases, we share with Lysogene a sense of urgency and a deep commitment to see this program through to fruition. Toward that goal, Sarepta will leverage its expertise in rare disease therapies and gene therapy to bring LYS-SAF302 to the MPS community.”

“This partnership with Sarepta, an innovative global leader in genetic diseases, is a major step forward for Lysogene in our commitment to bring a therapy to market to treat MPS IIIA patients,” said Karen Aiach, Lysogene’s Chief Executive Officer and founder. “We believe that Sarepta is the ideal partner for LYS-SAF302 in the US and other countries outside of Europe. We are proud of this important validation of our efforts to date and look forward to working together closely with Sarepta.”

As part of this partnership, Sarepta is subscribing to an equity investment of $2.5 million (€2.2 million) at a 30% premium to the 5-day volume-weighted average share price, through the issuance of 950,606 ordinary shares, with the same rights as existing shares, under a capital increase with cancellation of pre-emptive rights under article L.225-138 of the French Commercial Code and the 22d resolution of Lysogene’s Extraordinary General Meeting in June 2018. The issuance of these shares will result in dilution of 7.1% for existing Lysogene shareholders. The issuance of these shares does not require the publication of a prospectus submitted to the visa of the Autorité des Marchés Financiers in accordance with article 211-3 of the AMF General Regulations. Lysogene intends to apply the funds raised for general corporate purposes including the further development of LYS-GM101 for GM1 gangliosidosis. Torreya acted as exclusive financial advisor to Lysogene.

MPS IIIA is a rare inherited neurodegenerative lysosomal storage disorder characterized by intractable behavioral problems and developmental regression resulting in early death. It is caused by mutations in the SGSH gene, which encodes an enzyme called Heparan-N-sulfamidase necessary for heparan sulfate (HS) recycling in cells. The disrupted lysosomal degradation and resulting storage of HS and glycolipids such as gangliosides leads to severe neurodegeneration. MPS IIIA affects about 1 in 100,000 newborns and is inherited in an autosomal recessive pattern. There are currently no treatment options for patients. The pivotal gene therapy trial is scheduled to start by year-end 2018; trial to assess the efficacy of LYS-SAF302 in improving or stabilizing the neurodevelopmental status of MPS IIIA patients.

LYS-SAF302 is an AAV-mediated gene therapy, the goal of which is to replace the faulty SGSH gene with a healthy copy of the gene. LYS-SAF302 employs the AAVrh10 virus, chosen for its ability to target the CNS.

Proof-of-concept was established in MPS IIIA pre-clinical models demonstrating strong expression, broad distribution, and the ability of the compound to correct lysosomal storage defects by producing the missing enzyme. Safety data from an IND-enabling toxicity and a biodistribution GLP study showed that, at any dose level evaluated, LYS-SAF302 was not associated with unexpected mortality, change in clinical signs, body weight, behavior or macroscopic findings in the brain.

 Sarepta is at the forefront of precision genetic medicine, having built an impressive and competitive position in Duchenne muscular dystrophy (DMD) and more recently in Limb-girdle muscular dystrophy (LGMD), Charcot-Marie-Tooth (CMT) and CNS-related disorders, reaching a total of over 20 therapies in various stages of development. The Company’s programs span across several therapeutic modalities, including RNA, gene therapy and gene editing. Sarepta is poised to be the most meaningful precision genetic medicine company in the world and make a profound difference in the lives of patients suffering from rare neuromuscular diseases and other rare diseases. For more information, visit www.sarepta.com.

Lysogene is a gene therapy company focused on the treatment of orphan diseases of the central nervous system (CNS). The company has built a unique capability to enable a safe and effective delivery of gene therapies to the CNS to treat lysosomal diseases and other genetic disorders of the CNS. A pivotal clinical trial in MPS IIIA is expected to start by year end on 2018 and a phase 1-2 clinical trial in GM1 Gangliosidosis is in preparation, while we are currently collaborating with a major partner to define the strategy of development for the treatment of Fragile X syndrome, a genetic disease related to autism. For more information, visit www.lysogene.com.