By Dave Sebastian

 

Biogen Inc. is buying $465 million of Denali Therapeutics Inc.'s stock, amounting to 11.2% of Denali's outstanding shares, as part of an agreement to develop and sell Denali's Parkinson's disease treatment, the companies said.

Biogen is purchasing the newly issued shares at $34.94 apiece, the companies said Thursday. Biogen will pay up to $1.125 billion more if Denali's LRRK2 program, which stands for small molecule inhibitors of leucine-rich repeat kinase 2, hits certain milestones, they said.

The two companies will develop and sell the treatment in the U.S. and China, while Biogen will sell the product in other markets, they said. The drug is set to start late-stage clinical studies in 2021.

Biogen will also make an upfront payment of $560 million to Denali, they said. The companies said Biogen will shoulder 60% of the development's costs. Biogen will take half of the profits and losses of the drug's commercialization in the U.S. and 60% in China, while it will be responsible for the commercialization outside the U.S. and China, paying Denali tiered royalties, the companies said.

On top of the LRRK2 program, Biogen will also have exclusive rights to license two preclinical programs from Denali's transport-vehicle technology that aims to deliver large therapeutic molecules such as antibodies and enzymes across the blood-brain barrier, as well as a second program using the technology, they said.

The collaboration entails Biogen's right of first negotiation for two additional programs, the companies said.

 

Write to Dave Sebastian at dave.sebastian@wsj.com

 

(END) Dow Jones Newswires

August 06, 2020 09:02 ET (13:02 GMT)

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