Why Gene Therapy Company Orchard Therapeutics Stock Is Skyrocketing Today?

Gene therapy company Orchard Therapeutics Plc ORTX shares are trading higher after it agreed to be acquired by Kyowa Kirin Co., a Japan-based global specialty pharmaceutical company, for $16.00 per American Depositary Share (ADS) in cash (approximately $387.4 million, or ¥57.3 billion).

The deal represents a premium of 144% to Orchard Therapeutics' volume-weighted average price per ADS over the previous 30 days ended October 4.

An additional $1.00 contingent value right (CVR) will be paid for $17.00 per ADS, or ~$477.6 million if the conditions are met.

Kyowa Kirin To Boost Portfolio With Orchard's Libmeldy 

Orchard Therapeutics' portfolio comprises Libmeldy (atidarsagene autotemcel), also known as OTL-200, intended for eligible patients with early-onset metachromatic leukodystrophy (MLD).

MLD is a rare and life-threatening inherited disease of the body's metabolic system.

Libmeldy is approved by the European Commission and the U.K. Medicines and Healthcare Products Regulatory Agency (MHRA) for the treatment of "late infantile" and "early juvenile" MLD patients. 

In the U.S., Libmeldy is currently an investigational drug under Priority Review by the Food and Drug Administration (FDA) with a Prescription Drug User Fee Act (PDUFA) goal date of March 18, 2024.

While reporting its Q2 results on August 3, ORTX said it had generated nearly $26 million in total revenue for Libmeldy in Europe since its launch. 

This acquisition will allow Kyowa Kirin to maximize the value of Libmeldy and efficiently accelerate the development of Orchard Therapeutics' next-in-line MPS programs, as well as its other early research programs, including a severe genetic form of Crohn's disease and frontotemporal dementia (FTD).

Global Leadership With Orchard Acquisition

Upon closing, the acquisition would provide Kyowa Kirin with a solid position in the field of genetic medicine, including a portfolio spanning commercial, clinical, and pre-clinical HSC gene therapies.

"We remain as true to our mission as ever, and joining Kyowa Kirin's global network ensures we are well-resourced to progress anticipated commercialization of OTL-200 in the U.S., if approved, continue investing in initiatives aimed at accelerating Libmeldy growth in Europe, capitalize on opportunities for global expansion, as well as advance our next-in-line neurometabolic programs in MPS disorders and earlier-stage research programs," said Bobby Gaspar, co-founder and chief executive officer of Orchard Therapeutics.

The transaction is expected to close in the first quarter of 2024, upon which Orchard Therapeutics will become a wholly-owned subsidiary of Kyowa Kirin.

Price Action: ORTX shares are trading higher by 97.40% to $15.95 premarket on the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.