Precision BioSciences Receives Initial $7.5 Million Cash Payment and Equity Investment from TG Therapeutics for Azel-Cel in Treatment of Autoimmune Diseases

Rhea-AI Summary

Precision BioSciences (DTIL) receives upfront cash payment and equity investment from TG Therapeutics (TGTX) for an exclusive license to develop Azercabtagene Zapreleucel for autoimmune diseases, with potential payments totaling $17.5 million. Precision also expects to receive up to $288 million in milestone payments and royalties on net sales, extending its cash runway into the first half of 2026.

Insights

Financial Analyst

The recent financial transaction between Precision BioSciences and TG Therapeutics represents a strategic collaboration in the biotech industry, with significant implications for both companies' financial health and strategic positioning. The upfront payment and equity investment are crucial for Precision's financial stability, effectively extending its cash runway into the first half of 2026. This extension is vital as it provides the company with the necessary resources to reach phase 1 clinical readouts without immediate pressure to secure additional funding.

From an investment perspective, the premium price paid by TG Therapeutics for Precision's shares—double the 30-day VWAP—reflects a strong confidence in the potential of Azercabtagene Zapreleucel (azer-cel) and may signal to the market an optimistic outlook on the therapy's prospects. The structure of the deal, which includes milestone payments that could total up to $288 million plus royalties, aligns the interests of both companies, incentivizing Precision to meet clinical development targets and ensuring TG Therapeutics shares in the commercial success.

However, investors should be aware that milestone payments are contingent on clinical success, which carries inherent risk. The high stakes involved in drug development, particularly in the gene editing space, mean that any setbacks could impact expected revenues and the stock performance of both companies.

Biotechnology Legal Expert

The licensing agreement between Precision BioSciences and TG Therapeutics encompasses the global rights to azer-cel for autoimmune diseases and other indications outside of cancer. This delineation of rights is a common practice in biotech collaborations, allowing companies to specialize and leverage their expertise in specific therapeutic areas. For Precision, this agreement may represent a strategic decision to focus on oncological applications of its ARCUS® platform while benefiting from TG Therapeutics' development in other areas.

It is important to note the legal implications of such agreements. Licensing deals are subject to regulatory approval and any failure to comply with legal standards can lead to delays or termination of the agreement. Furthermore, the specificity of the license to certain indications outside of cancer underscores the importance of intellectual property management in the biotech sector, where the scope of rights granted can significantly impact the potential market and revenue streams.

Market Research Analyst

The strategic partnership between Precision BioSciences and TG Therapeutics may indicate a growing trend in the biotech industry where companies increasingly rely on collaborations to share the risk and rewards of drug development. Such collaborations can be particularly beneficial for smaller biotech firms like Precision that require capital to fund their research and development activities. The investment from TG Therapeutics not only offers financial support but also validates Precision's technology and pipeline, potentially attracting further investments or partnerships.

The deal's announcement is likely to influence investor sentiment as it provides a positive outlook on Precision's operational sustainability. However, market analysts must consider the broader competitive landscape for gene editing therapies. The success of Precision's programs and the subsequent financial benefits hinge on the company's ability to navigate an increasingly crowded field and differentiate its offerings. Market penetration and adoption rates of new therapies will ultimately determine the long-term financial impact of this agreement.

DURHAM, N.C.--(BUSINESS WIRE)-- Precision BioSciences, Inc. (Nasdaq: DTIL), an advanced gene editing company utilizing its novel proprietary ARCUS® platform to develop in vivo gene editing therapies for sophisticated gene edits, including gene elimination, insertion, and excision, today received an upfront cash payment and equity investment from TG Therapeutics, Inc. (Nasdaq: TGTX) for an exclusive license to develop Azercabtagene Zapreleucel (azer-cel) for autoimmune diseases, and other indications outside of cancer. This is the first in a series of payments, with Precision to receive a total of $17.5 million in upfront and potential near-term payments as part of the consideration for this license.

In exchange for global rights to azer-cel for autoimmune diseases and indications outside of cancer, Precision has received an upfront payment totaling $7.5 million, consisting of cash and the purchase of 2,920,816 shares of Precision common stock by TG Therapeutics at a price of $0.77 per share, a 100% premium to the 30-day volume-weighted average price (VWAP) prior to purchase.

Precision will also receive an additional $2.5 million within 11 months, as an equity investment in Precision’s common stock at 100% premium to the then 30-day VWAP prior to purchase. Upon the achievement of certain near-term clinical milestones, Precision will also receive an additional $7.5 million payment. Precision is eligible to receive up to $288 million in milestone payments in addition to high-single-digit to low-double-digit royalties on net sales.

Precision expects that these recent payments from its azer-cel transactions, along with existing cash and cash equivalents, expected operational receipts, continued fiscal and operating discipline, and availability of Precision’s at-the-market (ATM) facility will extend Precision’s cash runway into the first half of 2026, through phase 1 clinical readouts for its wholly owned programs.

About Precision BioSciences, Inc.

Precision BioSciences, Inc. is an advanced gene editing company dedicated to improving life (DTIL) with its novel and proprietary ARCUS® genome editing platform that differs from other technologies in the way it cuts, its smaller size, and its simpler structure. Key capabilities and differentiating characteristics may enable ARCUS nucleases to drive more intended, defined therapeutic outcomes. Using ARCUS, the Company’s pipeline is comprised of in vivo gene editing candidates designed to deliver lasting cures for the broadest range of genetic and infectious diseases where no adequate treatments exist. For more information about Precision BioSciences, please visit www.precisionbiosciences.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding the clinical development and expected safety, efficacy and benefit of our product candidates (including azer-cel) and gene editing approaches including editing efficiency and differentiating aspects; the suitability of azer-cel for oncology indications and non-oncology indications including immunological diseases; expectations about our operational initiatives and business strategy; our expected cash runway; expectations about achievement of key milestones and receipt of any milestone, royalty, or other payments; expectations regarding our liquidity and capital resources; and anticipated timing of initial clinical data. In some cases, you can identify forward-looking statements by terms such as “aim,” “anticipate,” “approach,” “believe,” “contemplate,” “could,” “estimate,” “expect,” “goal,” “intend,” “look,” “may,” “mission,” “plan,” “possible,” “potential,” “predict,” “project,” “pursue,” “should,” “target,” “will,” “would,” or the negative thereof and similar words and expressions.

Forward-looking statements are based on management’s current expectations, beliefs and assumptions and on information currently available to us. These statements are neither promises nor guarantees, and involve a number of known and unknown risks, uncertainties and assumptions, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various important factors, including, but not limited to, our ability to become profitable; our ability to procure sufficient funding to advance our programs; risks associated with our capital requirements, anticipated cash runway, requirements under our current debt instruments and effects of restrictions thereunder, including our ability to raise additional capital due to market conditions and/or our market capitalization; our operating expenses and our ability to predict what those expenses will be; our limited operating history; the progression and success of our programs and product candidates in which we expend our resources; our limited ability or inability to assess the safety and efficacy of our product candidates; the risk that other genome-editing technologies may provide significant advantages over our ARCUS technology; our dependence on our ARCUS technology; the initiation, cost, timing, progress, achievement of milestones and results of research and development activities and preclinical and clinical studies, including clinical trial and investigational new drug applications; public perception about genome editing technology and its applications; competition in the genome editing, biopharmaceutical, and biotechnology fields; our or our collaborators’ or other licensees’ ability to identify, develop and commercialize product candidates; pending and potential product liability lawsuits and penalties against us or our collaborators or other licensees related to our technology and our product candidates; the U.S. and foreign regulatory landscape applicable to our and our collaborators’ or other licensees’ development of product candidates; our or our collaborators’ or other licensees’ ability to advance product candidates into, and successfully design, implement and complete, clinical or field trials; potential manufacturing problems associated with the development or commercialization of any of our product candidates; our ability to obtain an adequate supply of T cells from qualified donors; delays or difficulties in our and our collaborators’ and other licensees’ ability to enroll patients; changes in interim “top-line” and initial data that we announce or publish; if our product candidates do not work as intended or cause undesirable side effects; risks associated with applicable healthcare, data protection, privacy and security regulations and our compliance therewith; our or our licensees’ ability to obtain orphan drug designation or fast track designation for our product candidates or to realize the expected benefits of these designations; our or our collaborators’ or other licensees’ ability to obtain and maintain regulatory approval of our product candidates, and any related restrictions, limitations and/or warnings in the label of an approved product candidate; the rate and degree of market acceptance of any of our product candidates; our ability to effectively manage the growth of our operations; our ability to attract, retain, and motivate executives and personnel; effects of system failures and security breaches; insurance expenses and exposure to uninsured liabilities; effects of tax rules; effects of the COVID-19 pandemic and variants thereof, or any pandemic, epidemic, or outbreak of an infectious disease; the success of our existing collaboration agreements, and our ability to enter into new collaboration arrangements; our current and future relationships with and reliance on third parties including suppliers and manufacturers; our ability to obtain and maintain intellectual property protection for our technology and any of our product candidates; potential litigation relating to infringement or misappropriation of intellectual property rights; effects of natural and manmade disasters, public health emergencies and other natural catastrophic events; effects of sustained inflation, supply chain disruptions and major central bank policy actions; market and economic conditions; risks related to ownership of our common stock, including fluctuations in our stock price; our ability to meet the requirements of and maintain listing of our common stock on Nasdaq or other public stock exchanges; and other important factors discussed under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023, as any such factors may be updated from time to time in our other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov and the Investors page of our website under SEC Filings at investor.precisionbiosciences.com.

All forward-looking statements speak only as of the date of this press release and, except as required by applicable law, we have no obligation to update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240212039949/en/

Investor and Media Contact:

Naresh Tanna

Vice President of Investor Relations

Naresh.Tanna@Precisionbiosciences.com

Source: Precision BioSciences, Inc.

FAQ

What is the ticker symbol for Precision BioSciences?

The ticker symbol for Precision BioSciences is DTIL.

What type of therapy is Precision BioSciences developing with its ARCUS platform?

Precision BioSciences is developing in vivo gene editing therapies for sophisticated gene edits, including gene elimination, insertion, and excision.

How much upfront and potential near-term payments is Precision BioSciences receiving from TG Therapeutics for the exclusive license to develop Azercabtagene Zapreleucel?

Precision BioSciences is receiving a total of $17.5 million in upfront and potential near-term payments from TG Therapeutics for the exclusive license to develop Azercabtagene Zapreleucel.

What is the price per share at which TG Therapeutics purchased shares of Precision BioSciences?

TG Therapeutics purchased 2,920,816 shares of Precision common stock at a price of $0.77 per share, which was a 100% premium to the 30-day VWAP prior to purchase.

How long is Precision BioSciences' cash runway expected to extend with the recent payments from its azer-cel transactions?

Precision BioSciences' cash runway is expected to extend into the first half of 2026, through phase 1 clinical readouts for its wholly owned programs, with the recent payments from its azer-cel transactions.