MeiraGTx Shares Surge on Gene Therapy Pact with Eli Lilly
The strategic collaboration includes a $75 million upfront payment and over $400 million in potential milestones to develop treatments for inherited blindness.
Shares of MeiraGTx (NASDAQ: MGTX) surged as much as 18% in pre-market trading Monday after the gene therapy company announced a strategic collaboration with pharmaceutical giant Eli Lilly and Company (NYSE: LLY) to develop and commercialize treatments for inherited eye diseases.
The deal provides MeiraGTx with a significant capital infusion, including a $75 million upfront payment. The company is also eligible to receive more than $400 million in potential future development, regulatory, and commercial milestone payments, in addition to tiered royalties on any sales of licensed products resulting from the partnership.
The collaboration centers on MeiraGTx's portfolio of genetic medicines for ophthalmology. According to the company's announcement, Lilly will receive exclusive worldwide rights to MeiraGTx’s AAV-AIPL1 program, a promising gene therapy for Leber congenital amaurosis 4 (LCA4), a rare inherited retinal disease that causes severe vision loss or blindness in infants.
“We are particularly pleased that Lilly, a global leader in development and commercialization of innovative medicines, has chosen to partner with us in this area of high unmet need,” said Alexandria Forbes, Ph.D., president and chief executive officer of MeiraGTx. "This collaboration with Lilly is a testament to our leadership in this field and the power of our broad toolkit of proprietary gene therapy technologies for both rare and prevalent ocular disease."
Beyond the lead candidate, the agreement gives Lilly access to MeiraGTx's broader gene therapy technology, including novel intravitreal capsids and AI-generated promoters designed to improve the delivery and effectiveness of genetic medicines in the eye.
For Eli Lilly, the partnership marks a strategic expansion into a new therapeutic area. "Ophthalmology is an emerging area of interest for Lilly," commented Andrew Adams, group vice president of molecule discovery at Lilly. "We are excited to partner with MeiraGTx to bring transformative treatments to patients around the world suffering from eye diseases, starting with AAV-AIPL1, which has shown the unprecedented ability to restore vision in children who were born legally blind."
The market reaction underscores the significance of the deal for MeiraGTx, which has a market capitalization of approximately $681 million. The non-dilutive funding strengthens its balance sheet and provides external validation from a major pharmaceutical player, de-risking the development path for its innovative therapies. Following the pre-market spike, the stock was trading around $8.47 in Monday morning's session.
Analysts have also responded positively to the news. Raymond James initiated coverage on MeiraGTx with a "Strong Buy" rating and a $29 price target, suggesting substantial upside from its current trading level. The average analyst price target for the company stands at $27.57.
The collaboration positions MeiraGTx as a key player in the competitive landscape of ocular gene therapy. With Lilly's backing, the company is better equipped to advance its pipeline and potentially deliver on the promise of one-time treatments for debilitating genetic eye conditions.