LogicBio’s lead gene-editing therapy is emerging from clinical holdings, the cash reserves to support the program are dwindling, and the company is losing its stock listing. AstraZeneca has eased pressure on the biotech with a $68 million acquisition that the pharma giant sees as a way to add a new genetic medicine dimension to its pipeline of rare disease drugs.
AstraZeneca announced Monday that its Alexion rare disease unit has agreed to acquire all outstanding LogicBio shares at a price of $2.07 per share. That’s a premium of more than 666% to LogicBio’s closing price on Friday, but still well below the $10 a share the Lexington, Massachusetts-based biotech made when it went public four years ago. LogicBio shares closed at $2.01 a share on Monday.
LogicBio is part of a new company developing alternatives to gene editing. Most gene-editing techniques use cleavage enzymes to cut DNA at the target location. These methods introduce the risk of dangerous or unwanted editing. LogicBio uses natural DNA repair mechanisms as a method for precise insertion of genes. The company calls its technology GeneRide.
Lead LogicBio project LB-001 is currently in Phase 1/2 testing for methylmalonic acidemia (MMA), a rare genetic disorder that causes developmental delay and other complications requiring hospitalization. The one-time treatment is designed to knock in corrective genes to drive the correct expression of key proteins.
The FDA suspended the trial in February after the company reported a second patient in the study developed thrombotic microangiopathy, a vascular complication associated with other gene therapies delivered by adeno-associated virus. These cases in the LB-001 study were resolved. In May, the FDA lifted the clinical hold after the company changed its clinical trial protocol to increase patient monitoring, which in turn will extend the time it takes to complete studies. Eight patients were specifically recruited for the study.
In addition to the regulatory setback, LogicBio also has funding problems. The company’s financial reports for the past year have raised questions about the company’s ability to continue as a going concern. According to its second-quarter 2022 financial results report, LogicBio had a cash position of $38.8 million as of June 30, enough to last another year. Adding to the problem is the looming loss of its Nasdaq listing. Last month, the exchange issued a formal delisting notice to the company for failing to maintain a minimum $1 price despite a 180-day grace period to re-comply with the requirement.
Despite financial distress, LogicBio’s lead projects have recovered and are showing encouraging signs. In August, the company reported preliminary results from four patients in a Phase 1/2 study, showing detection of a biomarker in the blood that indicates integration of genes carried by the therapy. The results also show the expression of key proteins. In a research note, William Blair analyst Raju Prasad wrote that while the exact levels of the biomarkers remain undisclosed, LogicBio suggests they are not currently at levels that would have an impact on disease regression. However, the company expects these levels to increase over time.
The results so far clearly give AstraZeneca enough confidence to acquire LogicBio. In addition to a platform for delivering and inserting genes, the company also has a platform for improving viral vector manufacturing. The pharma giant said the technologies will be part of its strategy to develop new drugs for rare genetic diseases.
“The proposed acquisition of LogicBio is a significant advance in our growing research in genomic medicine,” AstraZeneca Rare Disease Alexion CEO Marc Dunoyer said in a statement. “LogicBio’s people, experience and platform deliver new scientific capabilities by adding best-in-class technology and expertise to our genomic medicine strategy.”
AstraZeneca’s rare disease unit is the product of an acquisition. In 2021, the pharma giant paid $39 billion for Alexion Pharmaceuticals, a company with a blockbuster drug for rare blood diseases. The boards of AstraZeneca and LogicBio have approved the acquisition of LogicBio, which is expected to close in the next four to six weeks. Alexion is headquartered in Boston. The AstraZeneca subsidiary plans to keep LogicBio employees at their current location near Lexington.
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