Biogen and Ionis Pharmaceuticals announced that they have expanded their strategic collaboration through a new ten-year collaboration agreement to develop novel antisense drug candidates for a broad range of neurological diseases. This collaboration capitalizes on Biogen’s expertise in neuroscience research and drug development and Ionis’ leadership in RNA targeted therapies with the goal of developing a broad pipeline of investigational therapies. It builds upon a productive collaboration that produced Spinraza, the first and only approved treatment for patients with spinal muscular atrophy.

Under the terms of the collaboration, Biogen will pay Ionis $1 billion in cash, which will include $625 million to purchase 11,501,153 shares of Ionis common stock at a price of $54.34 per share, at an approximately 25% cash premium, and a $375 million upfront payment. Biogen will have the option to license therapies arising out of this collaboration and will be responsible for their development and commercialization. In addition, Biogen may pay milestone payments, license fees and royalties on net sales.

The companies plan to advance programs for a broad range of neurological diseases for which few treatment options exist today. Disease areas include dementia, neuromuscular diseases, movement disorders, ophthalmology, diseases of the inner ear, and neuropsychiatry. Biogen will have the first choice of neurology targets on which to exclusively collaborate with Ionis. In this collaboration, Ionis will be responsible for the identification of antisense drug candidates based on selected targets, while Biogen will be responsible for and pay for non-clinical studies, clinical development, manufacturing, and commercialization.

“Biogen and Ionis share a commitment and passion to bring new therapeutic options to those living with neurological diseases where the unmet medical need is high and growing,” said Michel Vounatsos, chief executive officer of Biogen. “We believe that this new collaboration will allow us to meaningfully expand our neuroscience pipeline in a way that differentiates Biogen. With the large number of diseases that could benefit from Ionis’ antisense platform, we believe that the time is now to build upon our highly productive collaboration with Ionis as we aim to transform the treatment of neurological diseases around the world.”

“There is no better partner for Ionis to develop new antisense drugs to treat neurological diseases than Biogen. Their demonstrated perseverance, dedication, and commitment to innovation in developing drugs for these challenging diseases is unmatched,” said Stanley T. Crooke, M.D., chief executive officer and chairman of Ionis. “These attributes and Biogen’s investment in neurological diseases have been important to the successes we’ve achieved already in the collaboration. Working with Biogen, we have achieved what neither company could have achieved alone. Together, we believe we can create a robust neurological disease franchise fueled by Ionis’ antisense technology and highlighted by the tremendous success of Spinraza. This new collaboration provides the potential opportunity to build an even stronger pipeline for Biogen and Ionis, with the expectation of bringing further benefit to patients in desperate need and value to Ionis’ shareholders. This new collaboration’s financial terms, upfront payment, milestone payments, and royalties are substantially higher compared to our previous collaborations with Biogen, which demonstrates the value we have created in applying Ionis’ antisense technology platform to neurological disease. We believe Biogen’s equity investment reflects its commitment to Ionis, to antisense technology, and to the success of this collaboration.”

“The transformational success of Spinraza has given us increased confidence that antisense therapeutics have the potential to address many diseases of the central nervous system that were previously untreatable,” said Michael Ehlers, M.D., Ph.D., executive vice president, research and development at Biogen. “Due to the ability of antisense oligonucleotides to directly intervene at the genetic origin of disease, we believe this approach could have a higher probability of success than traditional modalities, with a potentially more efficient development path to more rapidly help patients who suffer from diseases with limited or no treatment options. Our experience with antisense therapeutics makes us believe that they will be the preferred drug modality for numerous genetic diseases and targets of the nervous system.”

“Our collaboration with Biogen has provided significant value for both companies. We have and continue to learn more about neurological diseases and successful strategies for developing drugs for these diseases. Biogen has worked with us to validate biomarkers and develop new clinical trial endpoints. Ionis has helped Biogen understand our antisense platform and the large potential of this powerful drug modality in neurological diseases,” said Dr. C. Frank Bennett, senior vice president of research and Franchise Leader for the Neurological Programmes at Ionis. “Looking ahead, we are focused on continuing to advance Ionis’ antisense technology and on creating an exciting stream of drugs for neurological diseases – both for Biogen and for our wholly-owned neurological disease portfolio.”

The transaction is subject to customary closing conditions, including the expiration of the applicable waiting period under the Hart Scott Rodino Antitrust Improvements Act of 1976 in the United States.

Biogen and Ionis expect the deal to close in the second quarter of 2018. Stifel, Nicolaus & Company, Incorporated acted as exclusive financial advisor to Biogen in this transaction.