Biogen Inks $1B Deal with City Therapeutics for RNAi-Based CNS Drug Development

Biogen, a major player in the biotechnology sector, has entered into a significant partnership with City Therapeutics, a rising star in the field of RNA interference (RNAi) therapeutics. The collaboration, announced on May 27, 2025, aims to develop next-generation central nervous system (CNS) drugs using City's innovative RNAi engineering technology.

Deal Structure and Financial Terms

The agreement includes an upfront cash payment of $16 million from Biogen to City Therapeutics, coupled with a $30 million investment in exchange for a convertible note. This investment will represent a minority equity stake in City once converted. The deal's total value could reach up to $1 billion, contingent on milestone achievements related to the initial program, with additional royalties on potential sales.

Biogen also retains the option to expand the collaboration to include an additional target, subject to further payment to City Therapeutics. This structure underscores Biogen's commitment to expanding its pipeline through external partnerships, aligning with the company's recent strategic shift.

Scientific Focus and Development Strategy

The partnership will leverage City Therapeutics' RNAi engineering technology to develop a "trigger molecule" designed for systemic administration, targeting a specific mediator of CNS diseases. This approach represents a novel direction in CNS drug development, potentially offering more precise targeting of disease-causing factors.

Biogen will take the lead in conducting investigational new drug (IND)-enabling studies, clinical trials, and subsequent regulatory and commercialization activities. This division of labor capitalizes on Biogen's extensive experience in bringing CNS therapies to market while harnessing City's cutting-edge RNAi technology.

Strategic Implications and Industry Context

This collaboration marks a significant step in Biogen's evolving research strategy, which now balances internal capabilities with external investments in emerging scientific approaches. Dr. Jane Grogan, Biogen's research head, emphasized that this deal expands the company's R&D toolbox by incorporating RNAi-based approaches to target CNS diseases more precisely.

The partnership comes in the wake of Biogen's recent reorganization, which included layoffs and a pivot towards external opportunities. It follows closely on the heels of Biogen's $165 million upfront payment to Stoke Therapeutics for ex-U.S. rights to a potential first-in-class treatment for Dravet syndrome.

For City Therapeutics, a relatively new entrant backed by $135 million in Series A funding, this deal represents a major milestone. The company, co-founded by RNAi pioneer John Maraganore, Ph.D., aims to expand the therapeutic reach of RNAi technology. CEO Andy Orth, who joined City in January 2025 from Krystal Biotech, views the Biogen partnership as a crucial step in this mission.