Ionis Pharmaceuticals and startup gene editing firm Metagenomi have just signed a multi-target research deal that has the potential to generate nearly $3 billion in biobucks.
Even though the two companies involved are not widely recognized as major pharmaceutical players, the staggering financial deal they have agreed to demonstrates the industry’s massive wager on gene editing. There are eight potential genetic targets in total – divided into two groups of four – with Ionis paying $80 million for the first four and collaborating with Metagenomi on two of them.
Simon Harnest, SVP of Strategy at Metagenomi, said in an interview that after the first target is submitted to regulators for clinical trials, Ionis will have the option to sign up to four more. The initial investment required to sign all four extra targets is $120 million.
For all eight targets combined, there is nearly $3 billion in biobucks available, which is more than what some of the largest pharmaceutical companies in the world have spent on deals in recent years.
For reference, in August, Bristol Myers Squibb inked a deal with GentiBio for a maximum of $1.9 billion for three targets. A month ago, Lilly announced a drug discovery deal with Schrodinger worth over $400 million in biobucks. During the same time period, Bayer’s Vividian offered Tavros a potential payout of almost $950 million for four of its oncology targets. Moreover, Sanofi recently made a deal with AI-focused Insilico to collaborate on the development of six targets that could yield milestone payments totaling up to $1.2 billion.
The timing of this merger is ideal, as both companies are currently investing in state-of-the-art production facilities: Ionis is expanding a site in Southern California, and Metagenomi has opened a brand-new facility in Emeryville.
Metagenomi CEO Brian Thomas said, “We really tried to focus our manufacturing capabilities around both being able to produce not only the protein but also the messenger RNA in the event that we want to do that and so the facility is really versatile, and we can basically use it for either of those. And so, we will be including that as part of the clinical development process in the collaboration with Ionis.”
Thomas sees a huge opportunity—even if a lot of it depends on future clinical progress—in being able to use Ionis’ RNA technologies to find optimal targets for gene editing outside of well-known places like the liver.
Although neither company was prepared to reveal specific goals, Thomas mentioned that the first set of four would focus on well-explored areas like the liver, while the second set would branch out into uncharted territory.
Metagenomi has signed at least three deals since it started up in 2018. The other two are with Moderna and Affini-T Therapeutics. An earlier research deal with Vor Biopharma never turned into an option for targets.
Metagenomi’s artificial intelligence cloud computing platform is the focus of much of the company’s early excitement because it screens through billions of base pairs to successfully unearth novel nucleases that could be used in future gene editing therapies. Metagenomi believes that by expanding its gene-editing capabilities, it can treat a wider variety of diseases.