Orchestra BioMed (Nasdaq:OBIO) announced today that it entered into a termination and right of first refusal agreement with Terumo.
The agreement relates to the New Hope, Pennsylvania-based company’s Virtue Sirolimus AngioInfusion Balloon (SAB). It supersedes and terminates a prior distribution agreement between the companies and grants Terumo a right of first refusal (ROFR) to acquire the rights or enter a distribution agreement with respect to Virtue SAB for the treatment of coronary artery disease (CAD).
Terumo agreed to pay Orchestra $10 million upfront for the ROFR. The two companies additionally entered into a securities purchase agreement. In this deal, Terumo agreed to invest an additional $20 million in Orchestra BioMed through non-voting preferred stock. Terumo previously made a $30 million non-refundable payment and $5 million common stock investment in Orchestra under the prior agreement.
The companies expect the transactions to close no later than Nov. 7, 2025.
Under the ROFR, Orchestra can seek development and commercialization partnerships for Virtue in any therapeutic indication. It grants Terumo the right to review and respond to any potential third-party offers. The ROFR period expires 90 days after Orchestra discloses primary endpoint data from the Virtue trial to Terumo or the public.
More about Virtue SAB
Orchestra just yesterday announced the first enrollments in the Virtue Study. The FDA investigational device exemption (IDE) trial compares the Virtue SAB to the Boston Scientific Agent paclitaxel-coated balloon. Agent is currently the only FDA-approved drug-coated balloon (DCB) for coronary indication, picking up approval in March 2024.
Virtue SAB delivers a large liquid dose of a proprietary extended-release sirolimus formulation, called SirolimusEFR. It’s delivered through a non-coated, microporous AngioInfusion balloon that protects the drug in transit. Orchestra says this helps overcome certain limitations of existing DCBs.
SirolimusEFR aims to enable enhanced tissue uptake and extended sirolimus release through the critical healing period. This exceeds previously published target tissue concentrations of proven drug-eluting stents. A pilot study previously demonstrated promising clinical results for treating single-layer coronary in-stent restenosis (ISR).
Commentary from Orchestra and Terumo officials and analysts
David Hochman, chair and CEO of Orchestra Biomed said:
“Our new agreements with Terumo reflect the differentiated value of Virtue SAB for the treatment of atherosclerotic disease in the coronary arteries and provide strategic optionality for both companies. This new arrangement highlights the strong clinical and commercial potential of Virtue SAB to become a best-in-class therapy in the global coronary market. The $30 million in proceeds from Terumo provides meaningful additional capital resources to advance both of our pivotal stage programs to key clinical and regulatory milestones. We are glad to be aligned with our colleagues at Terumo and are thrilled to have initiated the Virtue Trial evaluating our fundamentally different approach to treating coronary in-stent restenosis.”
Ghada Farah, president of Terumo Interventional Systems said:
“We are very pleased to enter into a new strategic agreement with Orchestra BioMed that reflects the significant potential for Virtue SAB in the treatment of coronary artery disease. We believe it aligns the objectives of both companies, and we wish Orchestra BioMed great success as they enroll patients in the Virtue Trial.”
BTIG analysts Marie Thibault, Sam Eiber and Alexandra Pang said:
“While the formal termination of the prior agreement now makes it clear [Orchestra] needs to seek potential new partners, we are pleased to see a resolution on this matter and to see the company secure more cash. We look forward to learning more about management efforts to seek a new partner for Virtue SAB.”
