Regeneron ups genetic medicine investment with Decibel buyout
09 Aug 2023
AcquisitionPhase 1Gene Therapy
Dive Brief:
Regeneron is buying gene therapy developer Decibel Therapeutics, announcing Wednesday a $109 million deal that will deepen its investment in potential once-time treatments for hearing loss. Regeneron could pay Decibel shareholders up to $104 million more if certain milestones are hit.
Founded in 2015 by Third Rock Ventures and SR One, Decibel went public with a $127 million stock offering in February 2021. Since then, its value has fallen by about four-fifths, and company executives reported in May that Decibel had only enough cash to continue operations through the first half of 2024 as it runs a Phase 1 gene therapy trial.
Gene therapy developers are facing difficulties as biotech funding has slowed, a trend that’s affected other companies studying hearing loss, too. A startup called Otonomy shut its doors last December after multiple setbacks, while Frequency Therapeutics put itself up for sale after its own clinical failure.
Dive Insight:
Decibel has two experimental drugs it’s testing in humans: a special formulation of an old drug called sodium thiosulfate that aims to lessen the effects of chemotherapy on the ears, and a gene therapy called DB-OTO that’s meant to reverse an inherited form of hearing loss.
The Regeneron deal is largely focused on DB-OTO. The larger company is offering additional payouts to investors when the therapy is administered to a fifth clinical trial participant, and when the therapy either enters a Phase 3 clinical trial or regulatory review. Wall Street analysts, meanwhile, previously expected the sodium thiosulfate candidate to be licensed to another drugmaker.
The deal expands on Regeneron’s interest in gene therapies for inherited disorders of sensory organs, which can be less technically challenging to address than systemic diseases because the therapy can be administered directly to the eyes or ears.
Regeneron and Decibel partnered in 2017 on hearing loss disorders and in 2021 extended their alliance through this year. Regeneron has also forged ties with a German biotech called ViGeneron to develop eye disease treatments.
DB-OTO is designed to treat a type of hearing loss related to a deficiency of a protein called otoferlin by replacing a defective gene using a viral vector. The therapy is injected into the inner ear. DecibelDecibel initiated a Phase 1 clinical trial earlier this year.
Inherited otoferlin deficiency is an active area of research for gene therapy developers. Eli Lilly spent $600 million to acquire a biotech called Akouos that has a lead candidate in this disorder, while French company Sensorion has asked European regulators for permission to begin a clinical trial.
The acquisition is the second in Regeneron’s history. Its first, a buyout of cancer drug developer Checkmate Pharmaceuticals, was announced last year.
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