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Repligen, Pfizer Collaborate

Zacks Equity Research

Repligen Corporation (RGEN) recently joined forces with Pfizer, Inc. (PFE) for the advancement of its spinal muscular atrophy (SMA) program.

The Candidate

The SMA program was originally in-licensed from Families of SMA (:FSMA). The lead candidate in this program, RG3039, is in a phase I trial – the first two arms of this trial will be completed by Repligen following which Pfizer will take over the development of the candidate.

SMA is a genetic disease that presents early in life. According to The SMA Trust, one child out of every 6,000 births is affected by SMA.  

Repligen has Orphan Drug and Fast Track status for RG3039 in the US as well as Orphan Medicinal Product designation in the EU.

Terms of the Deal

Under this deal, Repligen could receive up to $70 million from Pfizer, including an upfront payment of $5 million. The balance $65 million would be received on the achievement of future milestones. Further, royalty payments will be made by Pfizer on sales of SMA compounds developed under the agreement.

Our Take

This deal is a major positive for Repligen. It not only provides it with a strong development partner like Pfizer, it also provides the company with funds in the form of upfront, milestone and other payments. Repligen’s strategy is to use its internal efforts for the growth of bioprocessing business and seek external partners for its therapeutic development programs.

Meanwhile, the deal is in line with Pfizer’s strategy of expanding its orphan drug segment.

We currently have a Neutral recommendation on Repligen. The stock carries a Zacks #1 Rank (Strong Buy). BioMimetic Therapeutics Inc. (BMTI) is another player which carries a Zacks #1 Rank.

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