RARE Daily

Neurogene Merges with Neoleukin to Advance Portfolio of Genetic Medicines

July 18, 2023

Rare Daily Staff

Neurogene, a company focused on developing therapies for rare neurological diseases, has entered into a definitive merger agreement with Neoleukin Therapeutics to combine the companies in an all-stock transaction.

The combined company will focus on advancing Neurogene’s pipeline of differentiated genetic medicines, including NGN-401, a clinical-stage product for Rett syndrome, which uses novel gene regulation technology for a potential best-in-class profile. Upon completion of the merger, which is subject to approval by Neurogene and Neoleukin stockholders, the combined company is expected to operate under the name Neurogene Inc. and trade on the Nasdaq Capital Market under the ticker symbol NGNE.

In connection with the merger, Neurogene announced an oversubscribed $95 million private financing led by new and existing investors, including participation from Great Point Partners, EcoR1 Capital, Redmile Group, Samsara BioCapital, Janus Henderson Investors, funds and accounts managed by Blackrock, Casdin Capital, Avidity Partners, Arrowmark Partners, Cormorant Asset Management, Alexandria Venture Investments, and a healthcare investment fund.

Under the terms of the merger agreement, Neoleukin will issue to pre-merger Neurogene stockholders shares of Neoleukin common stock as merger consideration in exchange for the cancellation of shares of capital stock of Neurogene, and Neurogene will become a wholly owned subsidiary of Neoleukin. Pre-merger Neoleukin stockholders are expected to own approximately 16 percent of the combined company and pre-merger Neurogene stockholders (including those purchasing Neurogene shares in the concurrent private financing discussed above) are expected to own approximately 84 percent of the combined company. In connection with the closing of the proposed transactions, Neoleukin stockholders will also be issued contingent value rights representing the right to receive certain payments from proceeds received by the combined company, if any, related to Neoleukin’s pre-transaction legacy assets or from savings realized by the combined company, if any, related to the reduction of Neoleukin’s legacy lease obligations.

Upon closing of the proposed transaction, Neoleukin Therapeutics will be renamed Neurogene. The combined company will be led by Rachel McMinn, founder and CEO of Neurogene, and other members of the Neurogene management team. The combined company’s board will be comprised of five board members selected by Neurogene and two members selected by Neoleukin. The transaction has been unanimously approved by the boards of each company and is expected to close in the fourth quarter of 2023, subject to customary closing conditions, including the approval of the transaction by the stockholders of each company.

With the cash from both companies at closing and the proceeds of the concurrent private financing, the combined company is expected to have approximately $200 million of cash or cash equivalents immediately following the closing. The cash resources will be used to advance Neurogene’s pipeline through multiple clinical milestones and are expected to fund operations into the second half of 2026. The merger and concurrent private financing are expected to close in the fourth quarter of 2023, subject to stockholder approval of both companies and the satisfaction of customary closing conditions.

“This transaction is expected to bolster our ability to progress our differentiated pipeline, including our clinical-stage program in Rett syndrome which contains our novel, proprietary EXACT technology,” said Rachel McMinn, founder and CEO of Neurogene. “We believe EXACT represents a meaningful technological advance for the gene therapy field, allowing us to develop therapeutic product candidates for complex diseases with attractive market opportunities not addressable with conventional gene therapy.”

McMinn said the capital will also support the company’s internal manufacturing capabilities, which she  expects will continue to provide significant financial and strategic flexibility. With cash on hand at the close of this transaction expected to fund operations into the second half of 2026. She said that will allow the company to successfully execute beyond multiple anticipated clinical inflection points for both Rett syndrome and Batten disease, and advance its discovery stage pipeline.

Neurogene’s internally manufactured portfolio aims to address several key limitations of conventional gene therapies, including variable gene expression, safety limitations, and inefficient gene delivery.

The company’s proprietary Expression Attenuation via Construct Tuning (EXACT) gene regulation platform technology is a self-contained transgene regulation platform that can be tuned to deliver a desired level of transgene expression within a narrow range, potentially avoiding transgene related toxicities associated with conventional gene therapy. EXACT is compatible with viral and non-viral delivery platforms.

Neurogene’s NGN-401 is an investigational AAV9 gene therapy being developed as a one-time treatment for Rett syndrome. NGN-401 is the first candidate to deliver the full-length human MECP2 gene under the control of Neurogene’s EXACT technology. Embedding EXACT technology into NGN-401 is an important advancement in gene therapy for Rett syndrome, specifically because the disorder requires a treatment approach that enables targeted levels of MECP2 transgene expression without causing toxic effects associated with conventional gene therapy. Rett syndrome is a debilitating, X-linked, neurodevelopmental disorder with significant unmet medical need, and one of the most common genetic causes of developmental and intellectual impairment in females.

The preclinical data package for NGN-401 provides evidence of a potential efficacy and safety profile in Rett syndrome. The company’s Investigational New Drug application was cleared by the U.S. Food and Drug Administration in January 2023. In the United States, NGN-401 has received Orphan Drug, Rare Pediatric Disease, and Fast Track designations.

Neurogene plans to commence dosing in a phase 1/2 trial designed to assess the safety, tolerability, and efficacy of a single dose of NGN-401 in female pediatric patients with Rett syndrome in the second half of 2023, with preliminary data expected in the fourth quarter of 2024 from the first cohort of patients, and additional expected data in the second half of 2025 from an expanded set of patients.

The company’s second rare disease candidate, NGN-101, is being developed as a one-time treatment for both ocular and neurological manifestations of CLN5 Batten disease using AAV9 to deliver the gene encoding CLN5, which is deficient in children with the disease.

Batten disease is a family of rare neurodegenerative diseases caused by pathogenic changes in one of a series of genes that results in the accumulation of toxic deposits across multiple organ systems. CLN5 Batten disease is a rare, pediatric-onset and rapidly progressive condition caused by a pathogenic mutation in the CLN5 gene, leading to loss of function. It is characterized by loss of vision, seizures, and progressive decline in intellectual and motor capabilities beginning in childhood leading to substantial impairments and early mortality.

In preclinical studies, NGN-101 has demonstrated the potential to slow or halt the key features of disease progression, including associated vision and motor declines. NGN-101 has received Orphan Drug Designation by U.S. and European regulatory agencies and is currently being evaluated in a phase 1/2 clinical trial in children with CLN5 Batten disease. Preliminary data is expected in the second half of 2024.

In addition to these two clinical-stage programs, Neurogene is also advancing a discovery-stage candidate that will expand its pipeline into an additional area of high unmet need. Neurogene expects to initiate a clinical study of this candidate in 2025.

Photo: Rachel McMinn, founder and CEO of Neurogene

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