In an apparent R&D about-face, Eli Lilly partners with Precision BioSciences on genome editing in a deal worth up to nearly $2.7B – Endpoints News

As a large multinational corporation, Eli Lilly has their hands in boundless projects, from cancer and immuno-oncology to diabetes, psoriasis and Crohns disease.But Friday they signaled a shift in their R&D focus toward genome editing, leaping into a cutting-edge field CEO Dave Ricks had shied away from as recently as January 2019.

The big pharma is ponying up $100 million upfront to partner with Precision BioSciences, focusing initially on Duchenne muscular dystrophy and two other undisclosed in vivo targets. Lilly is also acquiring $35 million worth of the biotechs stock, and has the option to develop three additional in vivo therapies.

By offering up to $420 million in R&D and commercialization milestones per product, Lilly could end up paying Precision as much as $2.655 billion when all is said and done. On top of that, the biotech is eligible for single-digit to low-teen royalties on successful therapies.

Precision $DTIL investors greeted the news warmly, sending shares up more than 12% in early trading Friday.

We feel like this is a strong statement from Lilly, Precision CEO Matthew Kane told Endpoints News. This is clearly a validating event for the company, but importantly it unlocks the potential for us to more aggressively go after some of these diseases.

At the heart of the deal is Precisions ARCUS genome editing platform, coming from a group of North Carolina scientists including CSO Derek Jantz who claim they have a better way to accomplish DNA hacking than the gene editing promoted by biotechs working on CRISPR/Cas9 technologies like CRISPR Therapeutics, Intellia and Editas.

ARCUS deals with whats known as the ARC nuclease, with the company saying it provides a simpler, more effective way of completing the gene editing process and allows for lower production costs when production eventually has to scale up. The enzyme itself is synthetic and comes from a homing endonuclease found in algae called I-CreI, with scientists re-engineering its editing abilities to knock in, knock out or repair cells as they see fit.

Weve spent the last 15 years getting good at modifying this natural enzyme from algae and bending it to our will, and making it have the ability to edit DNA sequences that were interested in, Jantz said.

He added that while Precision is looking at multiple delivery options, the biotech is fond of AAV technology because of its long track record in the clinic.

Precisions current lead program is an off-the-shelf CAR-T therapy acute lymphoblastic leukemia and non-Hodgkin lymphoma, aiming to target CD19, with Phase I data expected no earlier than the end of 2020. Such treatments and other ex vivo programs are not included in Fridays partnership, however, and Duchenne had not been one of the biotechs previous pipeline targets.

Kane said its too early to know when the DMD program could hit the clinic, but described the program as moving aggressively.

For Lilly, Ricks has stated his wariness of gene therapies in the past, despite several other big companies investing heavily in the area. Though the collaboration doesnt deal with the CAR-Ts Precision is developing internally, Friday marks an apparent course correction. Lilly will be jumping into a highly competitive DMD field where there are already multiple programs in the clinic, including those from Pfizer, Solid Biosciences, Vertex and Sarepta.

Almost everything I am aware of is single gene edit defects, which ultimately leads you to pretty ultra-rare conditions, which are not our area of interest, Ricks told Reuters in a Jan. 2019 interview, adding later, We dont need new areas to grow.

Kane said that while he cant speak for Lilly, he noted that genome editing is distinct from traditional gene therapies.

When we think of traditional gene therapy if you will, even though its still such a new and emerging field, there were typically inserting in or adding a gene thats missing from the body, but were not actually impacting the patients genome, Kane said. With gene editing, we actually do that. We have an opportunity to make a permanent change to the patients genome.

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In an apparent R&D about-face, Eli Lilly partners with Precision BioSciences on genome editing in a deal worth up to nearly $2.7B - Endpoints News