Lilly, seeking better CNS gene therapies, pays $55M to join AbbVie on AAV specialist’s list of partners

Lilly, seeking better CNS gene therapies, pays $55M to join AbbVie on AAV specialist’s list of partners

Eli Lilly has once again moved to bolster its gene therapy capabilities, committing $55 million upfront and $685 million in milestones to access Capsida Biotherapeutics’ adeno-associated virus (AAV) engineering platform.

Lilly has struck a pair of gene therapy buyouts in recent years, snapping up Prevail Therapeutics in 2020 in a $1 billion deal and paying $487 million upfront for Akouos last year. The latest agreement adds to the capabilities of Prevail, a biotech focused on AAV9 gene therapies for the treatment of genetically defined neurodegenerative diseases.

AAV9 is the current vector of choice for gene therapies that need to cross the blood-brain barrier, but there is scope to improve on the delivery vehicle. Ideally, a vector will zero in on specific tissues, thereby maximizing the therapeutic impact while minimizing off-target effects, but such a vehicle has remained elusive.

Enter Capsida, a startup that broke cover in 2021 armed with $50 million in series A funds and $90 million upfront from a pact with AbbVie. Capsida landed the support on the strength of evidence that its engineered capsids can improve on the performance of first-generation AAV9-based therapies. Lilly, working through Prevail, is the latest gene therapy player to buy into Capsida’s pitch.

Prevail will use Capsida’s AAV engineering platform to identify and advance capsids, which it will then pair with its cargo to make intravenous gene therapies against diseases of the central nervous system. In return, Capsida will receive $55 million—an undisclosed mix of an upfront payment and commitment to participate in the next financing round—and up to $685 million in R&D and commercial milestones.

Capsida will lead capsid discovery before handing over to Prevail for preclinical and IND-enabling studies. For one of the programs, Capsida has an option to participate in development and commercialization in the U.S. in exchange for a gross margin share. The deal provides further validation of Capsida’s platform and, almost two years from its series A, suggests the biotech is preparing for another funding round.

To date, Capsida has used its money to generate multiple generations of capsids, including versions that are designed to achieve high tropism in the brain and specifically de-target the liver, thereby bettering the 10% brain cell penetration typically seen using AAV9. Increasing brain penetration while minimizing the impact on other organs could expand the list of diseases that are addressable by gene therapies.

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