With just eight weeks of cash and a lead product that six months ago failed to win European approval, the Euronext-listed gene therapy company Amsterdam Molecular Therapeutics BV (AMT) has announced plans to be taken private by long-term venture capital investor Forbion Capital Partners, which currently holds just under 20% of AMT stock.

AMT's assets and liabilities will transfer into a newly formed private company, uniQure BV, with Forbion contributing €6 million in new financing. AMT will raise an additional €1 million in new money.

The move highlights the continuing tough public financing environment for biopharma firms in Europe, where confidence among already risk-averse investors has been further hit by the euro crisis and national-level austerity measures Also see "Euro Crisis Hits Investor Risk Appetite, But Opportunities Remain" - Pink Sheet, 12 December, 2011.. Despite some flickers of life in the region’s IPO market, listed biotechs continue to suffer from lack of visibility and liquidity Also see "France's Adocia Completes 2012's First Euro Biotech IPO" - Pink Sheet, 15 February, 2012.. These problems are compounded when companies are working in risky or controversial areas such as gene therapy.

Over the past five years, AMT's shares have slowly fallen in value, from its IPO at €10 per share in 2007 to €0.51 today. The company's market cap is now €5 million. The proposed move, although hardly inspiring confidence, at least gives shareholders the possibility of participating in any long-term value generated by AMT, according to CEO Jörn Aldag.

And it gives AMT a lifeline: In the middle of December 2011, AMT only had around €2 million in cash, and despite raising €2.5 million from Forbion in a private placement at the end of December 2011, its cash is expected to run out in April.

Forbion, which as invested in the Series A round for AMT back in 2006, will end up with around 64% of uniQure, with the Dutch VC also taking over AMT's €5 million convertible loan note liability.

The deal is subject to approval by AMT’s shareholders which include five private equity organizations holding 56% of the shares, and retail investors holding 44%. Shareholders with more than 5% of AMT will receive unlisted uniQure depositary receipts, which will be exchanged for unlisted uniQure shares. Those with smaller holdings will have their depositary receipts placed in an independent foundation managed as one shareholding, in order for uniQure to have only a small number of shareholders.

Uncertainty Over Gene Therapy Approval Process

AMT’s pain was drawn out by a longer-than-usual rejection process for its ultra-orphan Glybera (alipogene tiparvovec) for lipoprotein lipase deficiency. In July 2011, two European regulatory panels, the Committee on Human Medicinal Products (CHMP) and the Committee on Advanced Therapies (CAT), set up to help advise CHMP, both issued negative opinions on Glybera, citing concerns over poor evidence of clinical benefit.

But after AMT appealed against these rejections, CAT changed its mind, saying that its concerns could be addressed by post-marketing studies. The CHMP stuck to its guns, however – albeit after a very close vote – again rejecting Glybera in October 2011. So it wasn’t until October, three months after the initial rejection, that AMT halted work on Glybera and cut back on staffing Also see "Amsterdam Molecular Therapeutics Ends Glybera Development, Halves Workforce" - Pink Sheet, 26 October, 2011..

Meanwhile, Glybera may still not be dead, even though the money’s run out. On Jan. 27, the European Commission’s Standing Committee asked CHMP for more details about Glybera, a request that on Feb. 21 led to CHMP asking AMT for further information. A final decision on Glybera is expected in May 2012, CHMP has indicated.

Glybera is an adeno-associated adenovirus containing the gene for lipoprotein lipase, which is injected into the muscle tissue of patients, where it directs synthesis of the new enzyme. Patients with the genetic disorder lipoprotein lipase deficiency have high blood levels of chylomicrons which lead to recurrent pancreatitis.

Finding A Survival Strategy

Being taken private was probably the best that AMT could hope for in the circumstances. A capital increase was not really feasible with a market capitalization of only €5 million, commented Aldag. Even Europe’s entrepreneurial family investors, increasingly a lifeline to European biopharma as traditional investors flee, were concerned about the uncertain regulatory context for gene therapy drugs, he said.

And it’s unclear, even if the transaction is completed, whether AMT will be much more likely to find a development partner for its second research program, a gene therapy for use in the treatment of hemophilia B, given the regulatory uncertainty. Discussions to partner this program are ongoing, however.

AMT’s other gene therapy programs are being supported by academic groups and are preclinical, so they require minimal investment at present. They include a gene therapy for acute intermittent porphyria, in collaboration with the University of Navarra, Spain and the Spanish biotech, Digna Biotech SL; glial cell derived neurotrophic factor (GDNF) in Parkinson's disease and other neurodegenerative disorders; and a potential gene therapy for the genetic disease, Sanfilippo B, in collaboration with Institut Pasteur in France.

And there is a precedent for companies working in controversial areas to not only survive a de-listing, but also regain access to the public markets: U.K.-based stem cell therapy group ReNeuron Group PLC was taken private in 2003, only to return to the public markets in 2005.

Gene Therapy Firm AMT Forced To Go Private, Backed By Forbion

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