Benitec Biopharma secures multimillion-dollar licensing deal with Axovant Sciences

Biopharmaceutical company Benitec Biopharma (ASX: BLT) has decided to licence exclusive global rights to its proprietary oculopharyngeal muscular dystrophy drug AXO-AAV-OPMD to Axovant Sciences.

The licensing deal also paves the way for Benitec and Axovant to enter into a fully-funded research collaboration to develop five additional gene therapy products in treating neurological disorders.

Oculopharyngeal muscular dystrophy (OPMD) is a rare progressive, and often fatal, muscle-wasting disease caused by a specific gene mutation – often characterized by eyelid drooping, swallowing difficulties, and proximal limb weakness.

AXO-AAV-OPMD is a single vector, gene therapy construct system that uses a unique “silence-and-replace” methodology that employs DNA directed RNA interference (ddRNAi) to silence expression of the mutant gene associated with OPMD, while simultaneously expressing a copy of the normal healthy version of the same gene to restore the function of that gene.

With the ink on the licencing deal barely dry, Axovant has already revealed plans to initiate a placebo-controlled clinical study sometime next year.

“The ‘silence-and-replace’ platform is a targeted approach which directly addresses the underlying genetic cause of diseases arising from expression of dysfunctional proteins, including those caused by nucleotide repeat expansion. I am excited about the potential of this platform for patients suffering from OPMD, many of whom have limited treatment options today,” said Pavan Cheruvu, CEO of Axovant.

Four to eight milestones to multimillion-dollar success

Upon completion of “four specific near-term manufacturing, regulatory and clinical milestones”, Benitec will receive an upfront cash payment of US$10 million (A$13.4 million) with additional cash payments totalling US$17.5 million (A$23.5 million). In total, the deal is worth around US$27.5 million for Benitec (A$37 million).

According to Benitec, the commercial potential could reach as high as US$187.5 million (A$250 million) if the two companies achieve a total of 8 milestones over the coming years.

Another helpful aspect for Benitec is that Axovant has been granted worldwide rights to AXOAAV-OPMD and will assume all future development costs. Importantly, upon commercialisation, Benitec will retain 30% of the net profits on worldwide sales of AXO-AAV-OPMD.

“Today marks a milestone for Benitec as we believe this transaction to be transformative for our company,” said Jerel Banks, executive chairman of Benitec Biopharma.

Mr Banks added that “in addition to bolstering opportunities to drive broad-based, clinically meaningful patient benefit across several areas of clinical medicine with true unmet need, this partnership significantly enhances the financial, intellectual, and clinical development resources available to facilitate our efforts to build Benitec into a diversified biopharmaceutical company.”

“The non-dilutive capital expected over the near term will allow Benitec to continue to invest in proprietary R&D programs across a range of indications,” added Dr Banks.

In addition to AXO-AAV-OPMD, Axovant and Benitec have agreed to collaborate on a total of five additional investigational gene therapy products for neurological disorders, with Axovant agreeing to fully fund each of the research programs.

“We are extremely excited about Axovant’s collaborative and financial commitments to these five additional research programs as it plants the seeds for a long and robust partnership between our organizations,” said Dr Banks.

News of Benitec’s licensing deal helped lift its shares by 62% in this morning’s trading session, currently trading at $0.235 per share.