University of Pennsylvania biotech pioneer and visionary James Wilson in a way gets to live the best of both worlds– on the one hand as Director of University of Philadelphia’s Gene Therapy Program (GTP) he heads one of the world’s preeminent gene therapy-based research programs in a publicly-financed, higher education-based institution while on the other hand he is a founder, Scientific Advisor and equity holder for hot new Philadelphia, PA startup Passage Bio (Passage). Wilson has paid a lot of dues as a pioneer paving the way to the forthcoming gene-therapy revolution. Wilson and team launched Passage Bio in 2017 to be a first-in-class, fully integrated genetic medicines venture developing life transforming AAV-delivered in vivo therapeutics for the treatment of rare central nervous system (CNS) diseases. This “insiders” access to Penn’s GTP  has led to major financing ($110m in Series B alone and $225 m in total) as the upstart embarked on the aggressive undertaking–the development of an advance portfolio of 6 rare disease indications via IND-enabling studies. With such a big vision, capital is key and Passage Bio will go to the public market with an initial public offering (IPO) to raise as much as $125 million, selling shares of Passage Bio stock to the public.

TrialSite News breaks down this update and offers summary information.  Passage seeks to capitalize on the coming gene therapy boom led initially by institutions such as breakthroughs at Nationwide Children’s Hospital and Children’s Hospital of Philadelphia. With at least 20 drug products with some element of gene therapy approved and over two thousand gene therapy products in clinical trials, the personalized medicine-driven future had at times scary fits and starts—that directly impacted founder James Wilson—for example, back in 2000, when the FDA halted research at Penn’s Institute for Human Gene Therapy back in 2000 with the death of gene therapy clinical trial patient Jesse Gelsinger. Both Penn and Nationwide Children’s compensated the government $500,000 and a private settlement to the patient’s family. Gene-based therapy was not popular after this incident however slowly, and steadily groups in institutions such as Nationwide Children’s Hospital continued research. And with the approvals of breakthrough gene-therapies such as Spark Therapeutics’ Luxturna and then Novartis’ Zolgensma, the birth of the gene-therapy boom was now upon us. Enter Passage Bio and their collaboration with University of Pennsylvania (Penn).

Brief Passage Bio Overview

Based in Philadelphia, Passage Bio employs 20 and is developing advanced gene-based therapies for rare, single-gene disorders of the central nervous system including Krabbe disease, GM1 gangliosidosis, and frontotemporal dementia.  The startup has leveraged Penn relationships leading to an “exclusive” rights deal that includes a total of 12 treatments under development at Penn. Passage has big aspirations seeking to develop state-of-the-art genetic manufacturing facilities for example, placing it on par with Roche’s Spark Therapeutics.

How much money has Passage Bio raised? 

$225 million

Who are its investors & Shareholders?

OrbiMed Advisors, Versant Ventures, Frazier Live Sciences, LAV Prescience Limited, New Leaf Ventures, Vivo Capital, Access Industries, Boxer Capital, Highline Capital, Logos Capital and Sphera Global Healthcare.

Lead Equity Holders

The equity holders include founder Dr. Wilson who has secured about 7% of the concern. The top shareholders include:

ShareholdersShares (m=million)
Carl L. Gordon, PhD27.7m
Tom Woiwode, PhD20.9m
Versant Ventures20.9m
Patrick Heron19.7 m
Frazier Life Sciences19.7m

What is its current financial situation?

Good. According to a recent Philadelphia Inquirer story, they have spent down $46 million in 2019 and $13 million in their first year of 2018. However, they still had $159 million on hand by Dec. 3, 2019. However, their vision and mission presuppose considerable financial wherewithal and hence the need to raise capital on the public markets.

Overview of Passage Bio’s Collaboration with Penn’s Gene Therapy Program

The crux of Passage’s differentiated approach lies in their approach to developing treatments for rare, monogenic CNS disorders that they declare in their investor disclosure documentation enables them to select and advance product candidates with a higher probability of technical and regulatory success. The foundation for this capability rests on a “strategic research collaboration” between Passage and Penn’s Gene Therapy Program, headed by Dr. James Wilson (who also has an equity stake in Passage—more on this later).

This collaboration has led to three lead product candidates including:

Product CandidateTargetIND Submission TargetPhase I Trial Target
PBGM01GM1 gangliosidosis  (GM1)1st half 202022nd half 2020
PBFT02Frontotemporal dementia (FTD)2nd half 20201st half of 2021
PBKR03Krabbe disease2nd half 20201st half of 2021

Core Benefits of this Collaboration with Penn GTP

First and foremost, their research relationship with Penn’s GTP affords Passage access to one of the top gene-therapy based research organizations in the world. The expertise, capability and asset in that institution supporting the discovery and preclinical development of genetic medicine product candidates are perhaps only rivaled by Nationwide Children’s Hospital and one or two other centers. Moreover, Passage has secured exclusive rights to a number of rare , monogenic CNS indications. Passage has secured exclusive rights to all discovery work and IND-enabling research for up to 12 rare, monogenic CNS indications of their choice.

Moreover, the deal package includes three ongoing discovery programs with an option to license six additional programs from Penn GTP. Importantly Passage also negotiated limited exclusive rights to advanced capsid technology arising from Penn GTP that could directly benefit Passage’s product candidates within their rare, monogenic CNS field of use.

What are the Deal Terms between Penn & Passage?

Back in September 2018, Penn and Passage entered into a “sponsored research, collaboration and licensing agreement” known as the “Penn Agreement” in investor disclosures for preclinical research and development collaborations and associated exclusive license rights to patents for relevant products and technologies. For these rights and access, Passage paid Penn $2.5 million and issued 3.72 million shares of common stock with an estimated fair value at the time of $900K—all expensed as “in-process research and development” by the firm. Passage reports that it will fund “certain preclinical development activities” as well.

As the duo start developing more intellectual property (IP) the Penn Agreement allows Passage to exercise options to secure intellectual property rights for current and future products in specified indications for non-refundable upfront fees ranging from $800K to $1 million per product indication as reported in the S-1 investor disclosure. Thus far, Passage has exercised the option to license six product candidates from Penn. Although the agreement expires in 2022, it can be extended by both parties. When the agreement expires Passage must pay Penn a $300K annual license maintenance fee.

Wilson Lab Funding

As part of the deal with Penn, Passage also agreed to fund various research Dr. Wilson’s laboratory relating to preclinical development of select product candidates.

Development Milestones

Like many biotech and university drug discovery and development deals, milestone payments represent a key fixture of the transaction. Here, Passage must pay Penn milestone payments up to $16.5 million per product candidate in aggregate upon the achievement of specific development milestone events by such licensed product—(examples could be successful Phase I completion) and reduced development milestone payments for the second and third indications and no milestone payments for indications thereafter.

Sales Milestones

Assuming Passage can successfully navigate research and development with these gene-based therapies and actually secure a successful New Drug Application (NDA) and subsequent U.S. Food and Drug Administration (FDA) approval, then Passage will be obligated to pay Penn—based on licensed product and country—tiered royalties in the “mid-single digits” (e.g. 5%) on annual worldwide net sales of the licensed product.  Penn also negotiated payment for a percentage of “sublicensing income” ranging from the mid-single digits to low double digits for sublicenses under the Penn Agreement. 

Note that assuming a product is approved and is successful in the market—success being defined in the Penn Agreement—for each licensed product that achieves an excess of sales based on defined thresholds, Passage would pay up to $55 million in sales milestone payments.

Paragon Manufacturing Deal

Passage seeks to compete with rivals such as Roche (acquired Spark Therapeutics) for state-of-the-art gene therapy manufacturing prowess. Hence, Passage inked a collaborative deal with Paragon Bioservices Inc. A unit of Catalent Biologics, Inc., Paragon maintains two sophisticated gene therapy process and manufacture facilities in nearby Baltimore, MD. The parties entered into a collaborative agreement to help secure long-term buy in for a lengthier negotiation for a long-term manufacturing and supply agreement—currently under negotiation. To secure a dedicated commitment Passage paid Paragon $10 million in upfront fee for the commissioning, qualification, validation and equipping of a clean room site. Once the clean room is validated, Passage must pay Paragon $4 million per year for five years for use of this clean room for its gene manufacturing activities.


Dr. James Wilson and his Passage Bio is on a formidable mission to become a world leader in gene therapy medicine commercialization: a first-in-class to commercialize fully integrated, genetic medicines for the treatment of rare CNS diseases. This Philadelphia-based group is backed by some of the top minds in this emerging field, as well as serious investors, not to mention a strategic and interlocking business arrangement with Penn—along with Nationwide Children’s Hospital a global leader in the field of gene-therapy based research. Passage Bio has secured intellectual property and three (3) products nearly ready, or ready for IND submission. Clinical trials should start next year. Although they are still at least a handful of years away from any commercialization, they may in fact be putting together the pieces required to build a gene therapy company empire.

Source: Inquirer

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