NITE Nightstar Therapeutics Plc ADS

By Denise Roland 

Biogen Inc. has agreed to buy British gene-therapy company Nightstar Therapeutics PLC, the latest deal by a big drugmaker in this cutting-edge area of medicine.

The all-cash deal, which values Nightstar at around $877 million, hands Biogen a gene therapy for choroideremia, a rare, inherited eye disease that leads to blindness. The treatment is undergoing late-stage clinical trials. Nightstar, which was founded in 2013 based on research at the University of Oxford, also has several earlier-stage gene therapies in its pipeline, all aimed at rare inherited eye disorders.

Biogen Chief Executive Michel Vounatsos said the deal would accelerate the company's entry into the "emerging growth area" of eye diseases. It also marks a quick return into gene therapy after Biogen ended an earlier collaboration in the area following a failed clinical trial. That partnership, with Applied Genetic Technologies Corporation, also centered on the development of gene therapies for inherited eye disorders. It ended after AGTC said its therapy wasn't effective.

Gene therapies are eye-catching for their apparent ability to cure otherwise devastating illnesses with a single treatment. They typically target diseases caused by a single faulty gene and work by introducing the working version of that gene into the body using an inactive virus.

This area of medicine is now gaining momentum after a cautious start. The first gene therapies were tested in humans as early as 1990 but suffered a setback when, around 10 years later, several of those patients died. Dozens of gene therapies are now undergoing clinical trials, and large drugmakers are starting to make big bets on such treatments.

Last week, Roche Holding AG agreed to pay $4.8 billion to acquire Spark Therapeutics Inc., whose first product, targeting another rare eye disorder, has been on sale in the U.S. for about a year.

Novartis AG last year snapped up AveXis Inc. for $8.7 billion. AveXis's leading product, for a fatal infant muscle-wasting disease called spinal muscular atrophy, is expected to get the nod from U.S. regulators later this year.

Still, questions remain about gene-therapies' commercial potential. They tend to target conditions with small numbers of patients. The first gene therapy to launch in Europe, which targeted a rare eye disorder, was pulled from the market after low demand. And while many appear to cure previously intractable diseases, their novelty means there isn't yet conclusive evidence that those effects don't wane over time.

Another complication: gene therapies typically come with big price tags. Insurers aren't set up to pay high upfront costs for medical therapies, even if that expenditure is lower than the total sum they would pay for a less effective long-term treatment. Spark's therapy, called Luxturna, costs $850,000 to treat both eyes

With more gene therapies poised to enter the market in the next few years, drug companies and insurers are starting to explore new payment models, such as paying in installments.

Write to Denise Roland at Denise.Roland@wsj.com

(END) Dow Jones Newswires

March 04, 2019 06:57 ET (11:57 GMT)

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