Two months after raising concerns about its financial future, Dallas biotech Taysha Gene Therapies Inc. has landed a $50 million investment from a Japanese pharmaceutical company.
Taysha announced the investment late Monday from Tokyo-based Astellas Pharma Inc. to push forward its gene therapies for treating Rett syndrome and a disorder called giant axonal neuropathy.
In return, Astellas gets a 15% ownership stake and an exclusive option to license Taysha’s clinical stage programs to treat central nervous system genetic diseases. Astellas’ stock purchase accounts for $30 million of its investment.
The other $20 million is payment for licensing options and a provision that essentially gives Astellas first shot at buying the company, depending on the outcome of its Rett syndrome trials, according to a regulatory filing Tuesday.
“This partnership fits strategically with our long-term vision of expanding Astellas’ gene therapy capabilities, allowing the company to impact the lives of a broader range of patients with urgent unmet medical needs,” said Astellas chief strategy officer Naoki Okamura in a statement.
For Astellas, it builds on the company’s 2020 acquisition of Audentes Therapeutics — now Astellas Gene Therapies, California — and the construction of a manufacturing facility in Sanford, N.C., that opened in June. The Audentes deal was valued at $3 billion.
For Taysha, CEO RA Session II said the deal validates the market potential of its gene therapies.
“This is a transformative opportunity for Taysha,” Session said during a call Tuesday with analysts.
The company’s gene therapy replacement for Rett syndrome is in clinical development. Its treatment for giant axonal neuropathy is in first- and second-phase trials. Both have received orphan drug and rare pediatric disease designations from the U.S. Food and Drug Administration and orphan drug designation from the European Commission.
“In summary, our two lead programs continue to progress well,” Session told analysts.
Session said the company has an end-of-phase 2 meeting on its giant axonal neuropathy treatment scheduled with the FDA on Dec. 13. In August, he said the treatment could go to market as early as the end of 2023.
But at the same time, Taysha warned investors that it only had enough cash to continue operations through next year.
“These conditions and events raise substantial doubt about the company’s ability to continue as a going concern,” according to its regulatory filing.
It was a rapid descent following Taysha’s explosive start two years ago that saw it go public in a mere five months. It raised hundreds of millions of dollars from its initial public stock offering and private investors.
Taysha launched in 2020 as a partnership with researchers at the University of Texas Southwestern Medical Center, a university that plays a central role in Dallas’ burgeoning biotech sector. The company aimed to eradicate rare genetic diseases that disproportionately affect children.
It debuted with a robust pipeline of 18 gene therapy programs. But a year and a half later, Taysha pulled back and narrowed its operations to make its cash last longer. It zeroed in on therapies for GAN and Rett syndrome in March, limiting its other drug-development initiatives and laying off 35% of its workforce.
Taysha lost $174.5 million last year. Astellas’ revenue topped $10.6 billion last year.
