UPDATE 3-Regenxbio to receive $370 mln upfront in gene therapy deal with AbbVie

(Updates share movement, adds CEO comment)

Sept 13 (Reuters) - AbbVie will pay $370 million upfront to Regenxbio Inc in a deal to develop and sell an experimental gene therapy for the treatment of chronic retinal diseases, the companies said on Monday.

Shares of the Regenxbio, which could potentially receive up to $1.38 billion in milestone payments, jumped 26% to $41.75.

Regenxbio is currently testing RGX-314, administered under the retina, in a large trial as a one-time treatment for wet age-related macular degeneration (AMD). Wet AMD is a disorder that causes blurred vision.

The company plans to start a second trial by the end of the year, which would support its U.S. marketing application in 2024. AbbVie acquired a range of U.S.-approved eye drugs through a $63 billion Allergan deal that closed last year. These include, Acular and Acuvail, which are used to treat inflammation following cataract surgery, and the Durysta implant to reduce eye pressure in patients with glaucoma.

“We chose to partner with AbbVie, certainly due to their strength and their global commercialization reach and the fact that they have one of the largest eyecare franchises in the world,” said Kenneth Mills, chief executive officer of Regenxbio, on a call with analysts.

RGX-314 is also being studied in patients with wet AMD and diabetic retinopathy in separate mid-stage trials using a different type of delivery.

Regenxbio will be responsible for the completion of the ongoing studies of RGX-314 and will share the costs of additional trials of RGX-314 with AbbVie through the end of 2022, after which AbbVie will be responsible for a majority of the development costs.

The companies said they would equally split the profit from U.S. sales of RGX-314, with Regenxbio receiving tiered royalties on sales outside the country.

Reporting by Amruta Khandekar; Editing by Amy Caren Daniel