July 2 (Reuters) - Biogen said on Thursday it had forged a deal with AGTC to develop gene-based therapies for a range of eye diseases, marking the company's entry into opthalmology.
Shares of AGTC, formally known as Applied Genetic Technologies Corp, surged 21 percent to $19.75 in morning trading on the Nasdaq after the announcement. Biogen shares were little changed at $406.08.
Biogen, a leader in treatments for multiple sclerosis, said under terms of the deal that it would pay $124 million upfront, including a $30 million investment in AGTC shares.
AGTC would also be entitled to milestone payments and royalties in the high single-digit to mid-teen percentages of annual net sales of any approved products that come out of the collaboration.
"AGTC is an exceptional partner to help us advance our gene therapy capabilities by targeting diseases of the eye," Olivier Danos, Biogen's head of cell and gene therapy, said in a statement.
The initial work targets rare diseases of the retina that can lead to blindness, including one drug already being tested in people, and one still in pre-clinical development.
Biogen will obtain commercial rights for the programs, the companies said. The therapy involves replacing the faulty gene that causes each condition.
The treatment already being used in human trials is for a disease called X-linked Retinoschisis. The condition primarily affects young males beginning during the teenage years and can lead to serious complications, such as vitreous hemorrhage or retinal detachment.
The pre-clinical treatment is for X-Linked Retinitis Pigmentosa, which typically causes night blindness by the age of ten and progresses to legal blindness.
The agreement also includes Biogen options for early stage discovery programs in two ophthalmic diseases and one non-ophthalmic condition.
(Reporting by Bill Berkrot; additional reporting by Ransdell Pierson)