Fibrocell Strikes Funding Deal For Gene Therapy Candidate

Fibrocell Science Inc FCSC is one of Monday's biggest gainers after the cell and gene therapy company focused on diseases of skin and connective tissue announced a collaboration agreement to develop its gene therapy candidate.

What Happened

The nanocap biotech said Monday it struck a collaboration agreement with Castle Creek Pharma to develop its lead gene therapy candidate FCX-007 for treating recessive dystrophic epidermolysis bullosa, or RDEB.

RDEB is a life-threatening genetic disorder diagnosed at infancy for which there is currently no FDA-approved treatment. It manifests as blistering on skin.

The agreement provides for Fibrocell granting an exclusive license to Castle Creek for commercializing FCX-007 in the U.S. Castle Creek will assume the responsibility for meeting development and manufacturing expenses up to $20 million, prior to the BLA filing. For expenses over $20 million, Castle Creek will meet 70 percent of the excess costs.

The onus of clinical development, regulatory interactions and manufacturing will rest with Fibrocell, while Castle Creek will be responsible for all commercialization activities.

Fibrocell is to receive an upfront payment of $7.5 million, $2.5 million for the first patient enrolled in the Phase 3 trial and $30 million upon BLA approval and commercial readiness.

The company is also eligible to receive $75 million in sales milestones as well as 30 percent of share of profit from the sales of FCX-007.

Why It's Important

FCX-007 is a genetically modified autologous fibroblast that encodes the gene for type VII collagen developed in collaboration with Intrexon Corp XON.

"With Castle Creek Pharmaceuticals providing funding for the development of FCX-007, Fibrocell can allocate additional resources to advance clinical development of FCX-013 for the treatment of moderate to severe localized scleroderma," the company said in a press release.

Fibrocell also said with the agreement it has concluded the strategic alternative review it initiated last year. Fibrocell plans to initiate the Phase 3 tria, dubbed DEFI-RDEB, in the second quarter of 2019.

Fibrocell's stock surged 53 percent to $2.74 per share.

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