Lilly and Precision Revise Gene Editing Collaboration Agreement, Reducing Milestone Payments and Expanding Preclinical Involvement

In November 2020, Eli Lilly and CompanyPrecision BioSciencesAn upfront payment of $100 million and an investment of $35 million were made to develop in vivo gene therapies targeting three specific targets. The development and commercialization milestones for each advanced product can reach up to $420 million. According to the agreement, Precision BioSciences leads preclinical research and IND-supporting studies, while Eli Lilly and Company is responsible for clinical development and commercialization. This will later be handled by a subsidiary of Eli Lilly and Company.Prevail TherapeuticsTake over and participate.

Recently,PrevailAnnounced the revision of the previous agreement. According to the new terms, the two companies will continue to collaborate on development.PrecisionThe ARCUS nuclease, for genetic diseases, including DMD and two gene targets, is under development for in vivo gene therapy. However, Precision may be eligible for milestone payments of up to $390 million to $395 million per licensed product, which is less than the $420 million specified in the original agreement. The terms regarding potential nomination fees and royalties for other targets remain unchanged.

PrevailStill able to nominate up to three additional genetic disease gene targets, overseeing and funding preclinical research and activities aimed at advancing to human clinical trials. Additionally, Prevail will assume responsibility for manufacturing the initial clinical trial materials for the first potential product, a task originally handled byPrecisionResponsible, Prevail funding. Eli Lilly will remain responsible for the clinical development and commercialization activities of the licensed products in the partnership.

According to SEC filings,Precisionstated that this shift allows it to focus on its core competencies in nuclease generation, development, and characterization.

ARCUS is developed byPrecisionA proprietary genomic editing technology discovered by scientists, which is based on the naturally occurring genomic editing enzyme I-CreI, enabling highly specific cleavage and DNA insertion in cellular DNA.

▲ Figure | Precision BioSciences' In Vivo Gene Editing Pipeline (Source: Precision BioSciences' Official Website)

In May this year,PrecisionPreclinical Data for ARCUS Treatment of DMD Presented at the 26th Annual Meeting of the American Society of Gene & Cell Therapy.

PrecisionThe PBGENE-DMD program strategy is to use a pair of ARCUS nucleases delivered by AAV to excise the expression of a functional form of dystrophin, removing a "hotspot" region of mutations that spans approximately 500,000 base pairs. The dystrophin gene produces a functional variant of dystrophin, and up to 50% of DMD patients have pathogenic mutations in this region.

Scientists observed edited dystrophin variants in multiple tissue types often involved in DMD progression, including skeletal muscle, cardiac muscle, and the diaphragm. Moreover, the maximum force output of the gastrocnemius muscle in animals treated with ARCUS significantly increased compared to untreated mice, reaching 86% of the maximum force output level observed in healthy control animals.

As of June 30, 2023,Precision ManagementLayer indicates that existing cash and cash equivalents, anticipated operating revenue, and available credit will be sufficient to meet its operational expenses and capital expenditure needs until the first quarter of 2025. However, it is worth noting that the share price of Precision BioSciences has been hovering below $1 since March.