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Orchard Therapeutics, a global leader in gene therapy, has successfully completed the second closing of its securities purchase agreement, resulting in an additional $34 million of capital. This funding will extend the company's cash runway to mid-2025, allowing them to advance their hematopoietic stem cell (HSC) gene therapy portfolio through various milestones.
Funding for Value-Creating Milestones
The innovative financing arrangement, led by RA Capital Management and other prominent healthcare investors, allows Orchard Therapeutics to raise up to $188 million in total. The first closing of this financing arrangement took place in March 2023, raising $34 million. With the completion of the second closing, the company has now secured a total of $68 million in new capital.
The conditions for the second closing included shareholder approval and the company's intention to initiate a biologics license application (BLA) submission for their product OTL-200, a treatment for metachromatic leukodystrophy (MLD). These conditions have been met, and Orchard Therapeutics is on track to complete the BLA submission by mid-2023. With potential U.S. regulatory approval in the first half of 2024, the funding from the second closing will play a crucial role in supporting the company's preparations for the anticipated launch of OTL-200 in the United States.
Expansion of Capital and Share Issuance
To secure the additional funding, Orchard Therapeutics sold units at a purchase price of $8.00 per unit. This sale resulted in aggregate proceeds of $34 million, including the issuance of 4.25 million American Depository Shares (ADSs) as well as warrants. Guggenheim Securities, LLC acted as the sole placement agent for this private placement.
The net proceeds from this offering will be used to support Orchard Therapeutics' growing commercial capabilities for Libmeldy, their approved gene therapy product. Additionally, the funding will contribute to the preparation for potential U.S. approval of OTL-200 and the advancement of the company's HSC gene therapy portfolio. Orchard Therapeutics expects that the existing cash, cash equivalents, and investments, combined with the proceeds from the second closing, will sustain the company's operating, debt service, and capital expenditure requirements until mid-2025.
Orchard Therapeutics' Approach to Gene Therapy
Orchard Therapeutics focuses on hematopoietic stem cell (HSC) gene therapy as a curative approach to severe genetic diseases. This innovative treatment involves genetically modifying a patient's own blood stem cells outside of the body and reintroducing them, aiming to correct the underlying cause of the disease in a single treatment. The company's pipeline includes pre-clinical, clinical, and commercial stage HSC gene therapies, addressing serious diseases with limited or no existing treatment options.
In 2018, Orchard Therapeutics acquired GSK's rare disease gene therapy portfolio, which originated from a collaboration with the San Raffaele Telethon Institute for Gene Therapy in Milan, Italy. This acquisition has further strengthened Orchard's position as a leader in the field of gene therapy.
Impact on Orchard Therapeutics' Future
The successful completion of the second closing of the securities purchase agreement significantly de-risks Orchard Therapeutics' OTL-200 program for MLD. It marks a significant milestone on the path towards potential U.S. approval. The additional funding provides crucial support for the company's preparations for their first U.S. launch and the advancement of their next-in-line neurometabolic programs derived from their HSC gene therapy platform.
Frank Thomas, the president and chief operating officer of Orchard Therapeutics, expressed gratitude to the participating investors for their support and partnership in developing a standout company in the field of gene therapy. The unique financing structure highlights the confidence in Orchard Therapeutics' potential and the promise of their gene therapy portfolio.
Conclusion
Orchard Therapeutics' completion of the second closing of their securities purchase agreement brings an additional $34 million of capital, extending their cash runway to mid-2025. This funding will support the advancement of their HSC gene therapy portfolio and preparations for potential U.S. approval of their lead product, OTL-200 for MLD. With a focus on curative gene therapies, Orchard Therapeutics is poised to make a significant impact in the treatment of severe genetic diseases and address unmet medical needs.
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