Big Biotech Biogen is venturing into the city, paying $16 million in cash to partner up with an RNAi company to build next-gen central nervous system drugs.
The research pact—inked with recently emerged City Therapeutics—includes a $30 million investment from Biogen in exchange for a convertible note for the private biotech, representing a minority equity interest in City once converted, according to a May 27 release.
The Cambridge, Massachusetts-based biotech can also net up to around $1 billion in potential milestone payments tied to an initial program, plus royalties. Under the terms of the deal, Biogen could also tack on another target with an additional payment to City.
Together, the partners will work on a target that mediates CNS diseases using City’s RNAi engineering tech to develop a “trigger molecule” designed to enable systemic administration, according to the release.
Big Biotech Biogen will lead investigational-new-drug-enabling studies, clinical trials and any regulatory and commercialization activities.
"This collaboration underscores Biogen’s new strategic research approach of balancing our differentiated internal capabilities with external investments in cutting-edge science,” Biogen’s research head Jane Grogan, Ph.D., said in the release. “With this effort, we are further expanding the modalities in our R&D toolbox to potentially reach our targets of interest more precisely by adding an RNAi-based approach.”
The deal follows Biogen’s reorganization at the beginning of the year that included layoffs and a shift to focus on external opportunities. Shortly after announcing the restructure, Biogen paid Stoke Therapeutics $165 million upfront for ex-U.S. rights to a phase 3-ready molecule that could become the first disease-modifying treatment for Dravet syndrome.
As for City, the biotech unveiled last fall with $135 million in series A cash, with industry heavyweight John Maraganore, Ph.D., serving as the biotech’s co-founder and executive chair. Maraganore is best known for his role founding and leading RNAi specialist Alnylam Pharmaceuticals.
“Partnering with Biogen represents a meaningful milestone in our mission to expand the therapeutic reach of RNAi, as we pioneer the next generation of RNAi technology for breakthrough medicines,” City CEO Andy Orth said in the release. Orth joined the company in January from gene-therapy-focused Krystal Biotech, where he served as chief commercial officer. Orth is also an Alnylam alum.
Now, he leads City’s mission to build a pipeline of new RNAi therapeutics across multiple indications, with its first program expected to enter the clinic near the end of this year.
The biotech is backed by Arch Venture Partners and has already garnered a partnership with Bausch + Lomb designed to develop a new treatment for retinal diseases.