The acquisition will bring StrideBio’s adeno-associated virus capsid discovery and engineering platform under Ginkgo’s wing.
Ginkgo Bioworks doesn’t want the biotech industry’s therapies. But it does want the platforms that create them, which is why the cell programming company is buying up StrideBio for its gene therapy intellectual property.
The acquisition will bring StrideBio’s adeno-associated virus (AAV) capsid discovery and engineering platform called STRIVE under Ginkgo’s wing, including a library of well-tested and advanced capsids that could provide fodder for future partnerships. The deal is part of Ginkgo's broader M&A strategy to pick up new, complimentary biotech platforms.
“I'm sure you've seen this kind of movie play over and over again, but one of the things we observed that is really disappointing to us in the market is that whether or not a drug is successful, once there's a candidate, all of the resources go to that candidate and the R&D efforts—the platform technologies are often left to collect dust,” said Anna Marie Wagner, Ginkgo’s head of corporate development.
“If the drug fails, God forbid, then people often assume that the platform wasn't good,” she said.
Ginkgo wants to dust off those technologies and bring in the pieces that are still sound. Companies aren’t necessarily experts in everything it takes to build a gene therapy, which includes pieces such as manufacturing, promoter engineering, capsid engineering, broader enzyme engineering or payloads. That’s what Ginkgo has its eye on—fitting together the right technology for complex modalities like cell and gene therapies so that partner companies can shop for the pieces they need to make the best therapies.
“No one is doing everything well, and so you end up with a situation where everyone's touching one small piece of the elephant,” Wagner said. “They don't necessarily have a fully integrated toolkit that is solving the broader challenges, and that's really what Ginkgo is looking to build.”
That means Ginkgo is specifically after Stridebio’s IP—not its gene therapy manufacturing facility, and definitely not its lead preclinical asset STRX-330 for arrhythmogenic right ventricular cardiomyopathy. That program will be out-licensed or sold off to a partner of some kind.
“We're not moving into clinical development,” Wagner said.
Only one staff member will come over in the transaction, while founder Aravind Asokan, Ph.D., will be offered a consulting role. According to LinkedIn, StrideBio has a staff of about 33 people.
“We are really acquiring the assets that we want,” Wagner said. Ginkgo was clear on this intention from the beginning of the deal talks, she said.
Ginkgo was specifically interested in the STRIVE platform because of its potential to generate novel AAV capsids that address the limitations of gene therapy, such as targeted biodistribution, preexisting immunogenicity and manufacturability. These capsids could push gene therapy beyond the typical application in the liver to muscle and the central nervous system.
A license to gene therapy
The idea that eventually led to the StrideBio acquisition originated about a year and a half ago, when Ginkgo did an internal road map for its cell and gene therapy ambitions. Executives laid out which area of the business to get into and the companies that had what they were after. The first deal from this strategy was Circularis, for its circular RNA promoter screening platform.
StrideBio, meanwhile, went through a couple of strategic pivots to try to find its footing and focus area in a tough market for biotechs. Then Ginkgo came along, recognizing that the platform could be in better hands at the bigger company. When it came time to select the more drastic strategic alternative—a buyout—the relationship was already built, Wagner said. Ginkgo managed to snag StrideBio even amid a flurry of demand for the capsid library.
Wagner did not share the deal value, but said the terms are built around the “downstream economics,” or a revenue share based on whatever Ginkgo builds from the acquired assets. StrideBio raised $81.5 million in a March 2021 series B that was co-led by Northpond Ventures and Novo Holdings. Other investors include Takeda, Sarepta Therapeutics, UCB Ventures and CRISPR Therapeutics.
Ginkgo already has a partnership with Biogen for recombinant AAV vectors and Selecta for AAV capsids. Sarepta paid $48 million for exclusive licenses to four StrideBio gene therapies in Rett syndrome, Dravet syndrome, Angelman syndrome and Niemann-Pick in November 2019. All of StrideBio's pipeline assets are in the preclinical phase.
Adding StrideBio’s AAV capsids to Ginkgo's lineup could help “accelerate” these types of collaborations with Big Pharmas, Wagner said.
The capsid library that comes with StrideBio includes mature assets that are “ready to license,” according to Wagner. She promised there’s more partnerships to come from Ginkgo.
When it comes to M&A, Ginkgo is also still looking around on the market, but Wagner detailed a restrained approach even as the biotech industry continues to struggle. Layoffs, pipeline cuts and reprioritizations are rampant in the industry, with no end in sight.
“This was a particularly attractive transaction for us again, because we're able to really acquire the platform assets in a pretty clean way,” said Wagner, who added that Ginkgo will be keeping an eye out for another just like this.
With so many companies up for grabs, Wagner said Ginkgo is trying to make its business development intentions clear. The company is unlikely to go after a biotech laser-focused on clinical development, because winding down the clinical operations would be a lot of work.
“And, candidly, we would much rather see clinical assets go into the hands of somebody who could bring those forward to market,” Wagner said.
Ginkgo could also be a great partner to companies that are interested in hand-picking just the clinical candidates from a biotech. That could mean a Big Pharma makes the big deal and then the assets are split up with Ginkgo taking the platform tech, or a smaller company reaches out as they search for strategic alternatives to sell themselves.
“Most acquirers in this kind of a market, they're looking at biotech companies not for the platform, but for the clinical assets,” Wagner said. “And so we can actually just be a source of creating extra value in a transaction.”