Regeneron, listening to the call for more gene therapies, has added hearing loss specialist Decibel Therapeutics to its playlist in a deal valuing the biotech at $109 million at closing.
Regeneron and Decibel were already working together through a 2017 collaboration for three gene therapies for different forms of congenital, monogenic hearing loss. Decibel’s lead hearing loss candidate is DB-OTO, which is currently moving through a phase 1/2 trial called CHORD for individuals with hearing loss caused by mutations of the otoferlin gene.
Other assets include preclinical programs AAV.103 for GJB2-related hearing loss and AAV.104 for people with stereocilin-related hearing loss. The biotech also specializes in balance.
The deal has a total equity value of $213 million including contingent value rights (CVRs) if certain enrollment, dosing and regulatory milestones for DB-OTO are met. Decibel will come under Regeneron’s wing for $4 per share with the additional non-tradeable CVRs for $3.50 apiece. One of those milestones is the acceptance of a regulatory application in a number of countries by the end of 2028.
Regeneron, most well known for its antibody work, sees big opportunity in gene therapy and hearing loss specifically. The company noted that while otoferlin hearing loss itself is rare, most congenital hearing loss diagnosed in developed countries results from a single gene defect. That means these patients could be targeted with gene therapy.
George Yancopoulos, M.D., Ph.D., Regeneron’s chief scientific officer and president, said DB-OTO will soon be administered to patients in the early-stage trial and could provide the proof-of-concept needed to advance future gene therapies for more common types of hearing loss.
In addition to the gene therapy portfolio, Decibel also has DB-020 in its pipeline, a formulation of sodium thiosulfate being tested in a phase 1b for patients with hearing loss caused by the chemotherapy cisplatin. In June 2022, Decibel presented data showing that the therapy protected patients from hearing loss in the treated ear. The company is also developing two hair cell regeneration programs for the balance disorder bilateral vestibulopathy and for sensorineural hearing loss.
While Regeneron has been working with Decibel for some time, the deal underscores the accelerating interest in hearing loss biotechs. In October 2022, Eli Lilly picked up Decibel’s lead rival, Akouos, for $487 million upfront. That company is also using gene therapy to target otoferlin hearing loss. And just a month before that, Fennec Pharmaceuticals got a chemotherapy-induced hearing loss treatment approved by the FDA after decades in development.
Decibel launched its hearing loss mission in 2015 and is led by Laurence Reid, Ph.D., who joined the company in 2020.
“After full consideration, the Decibel board has determined that this transaction is the best way to maximize shareholder value and ultimately benefit patients,” Reid said in a statement. “We have collaborated with our colleagues at Regeneron for the past six years and have huge respect for their research and development capabilities. We have full confidence that with Regeneron’s expertise and resources the Decibel pipeline can be optimally developed, and our team is committed to enabling that long-term success.”
Decibel had cash and equivalents of $87.9 million as of March 31, which was expected to last into the first half of 2024. The biotech's shares were up 71% to $4.78 compared to a prior close of $2.79 in premarket trading Wednesday, suggesting investors like the tune of the Regeneron deal.