Why Syncona Is Buying Applied Genetic Technologies (AGTC) For Up To $73.5 Million

By Amit Chowdhry ● Oct 24, 2022
  • Syncona announced it is buying Applied Genetic Technologies for up to $73.5 million. These are the details.

Applied Genetic Technologies Corporation (AGTC), a clinical-stage biotechnology company focused on the development and commercialization of adeno-associated virus (AAV)-based gene therapies for the treatment of rare and debilitating diseases with an initial focus on inherited retinal diseases (IRDs), announced that it has entered into a definitive agreement pursuant to which a newly established portfolio company of Syncona will acquire AGTC, through a tender offer, for approximately $23.5 million ($0.34 per share) in cash at the closing of the transaction plus potential future aggregate cash payments of up to $50 million (up to $0.73 per share) pursuant to contingent value rights (CVRs).

Agreement: Under the terms of the definitive agreement, an indirect subsidiary of Syncona Limited will initiate a tender offer to acquire all outstanding shares of AGTC common stock. The upfront cash consideration in the transaction will consist of $0.34 per share of AGTC common stock (including common stock underlying restricted stock units and in-the-money stock options). AGTC equity holders will also receive in the transaction, for each share of AGTC common stock, one non-tradeable CVR. And the holders of the CVRs will be entitled to receive payments of up to an additional $50 million in the aggregate upon the achievement of certain milestones related to transactions involving AGTC’s assets and regulatory and commercial milestones related to AGTC’s products. The $0.34 per share represents a premium of approximately 42% and the potential for up to $1.07 per share (inclusive of the potential CVR value) represents a premium of up to approximately 344% over AGTC’s closing stock price on October 21, 2022.

KEY QUOTES:

“This transaction represents an attractive upfront cash offer to shareholders at a premium of approximately 42% to the current share price, with the potential to receive future upside based on the clinical success of XLRP and other pipeline assets through CVRs. Our board and leadership team evaluated all alternative options to progress AGTC-501. Given the state of equity and other funding markets, we see significant challenges in funding ongoing operations beyond 2022. We believe that this transaction clearly will deliver the best value to our shareholders. AGTC’s board of directors has unanimously approved the offer and strongly encourages shareholders to tender their shares.”

— Dr. Scott Koenig, Chairman of AGTC’s board of directors

“Our team has completed groundbreaking work for patients living with devastating retinal diseases. This transaction allows continued progress in advancing an important therapy for XLRP patients while also maximizing immediate and potential long-term value to our shareholders. On closing, AGTC will be Syncona’s third company focused on retinal gene therapy, and we look forward to transitioning AGTC-501 to Syncona’s experienced stewardship with the goal of advancing this differentiated product candidate to patients with XLRP.”

— Sue Washer, President and Chief Executive Officer of AGTC

“We share AGTC’s passion in developing life changing treatments for patients with diseases with no currently approved therapies. Syncona has significant expertise in AAV gene therapy, and in particular, a strong track record of building retinal gene therapy businesses. We believe AGTC’s XLRP program has the potential to be a best-in-class product that could transform the lives of patients suffering with this devastating blinding condition.”

— Chris Hollowood, Chief Investment Officer of Syncona Investment Management Limited