June 18 (Reuters) - Swiss drugmaker Roche will team up with privately held biotech Ascidian Therapeutics to develop gene therapies targeting difficult to treat neurological diseases, the Boston-based startup said on Tuesday.

WHY IT'S IMPORTANT

Roche is pursuing several therapeutic fields to offset falling oncology sales, setting a high deal pace to restore its development pipeline that was hit by major trial setbacks in Alzheimer's and cancer immunotherapy in 2022.

Under the agreement, Roche gets exclusive rights to Ascidian's RNA exon editing technology to develop therapies for undisclosed neurological diseases.

BY THE NUMBERS

Ascidian will receive an initial payment of $42 million and up to $1.8 billion in research, clinical, and commercial milestone payments. It is also eligible to receive royalties on commercial sales worldwide for any therapies developed under the partnership.

CONTEXT

Ascidian, backed by venture capital firm Apple Tree Partners, is separately testing a genetic eye disease therapy in an early-stage trial. It raised $40 million in its latest funding round in November 2023.

The therapy candidate, ACDN-01, is also based on its RNA exon editing technology that involves replacing mutated sections of genes with healthy ones.

This approach aims to provide long-lasting effect similar to traditional gene therapy but with reduced risks compared to direct DNA editing and gene replacement.

KEY QUOTES

"Our partnership with Ascidian is an opportunity to harness advanced RNA exon editing technology, which has the potential to deliver transformative one-time therapeutics by editing multiple whole exons at the RNA level with a single treatment," James Sabry, global head of pharma partnering at Roche, said.

(Reporting by Pratik Jain in Bengaluru; Editing by Sriraj Kalluvila)