Industry execs forecast the year ahead for gene therapy at Biotech Showcase

Hospitals – especially in Europe – anticipate growing interest from international patients. But a wave of industry consolidation is debatable.

    Alliance for Regenerative Medicine CEO Janet Lambert speaks at the 2019 Biotech Showcase

The first Food and Drug Administration approvals for cell and gene therapies are already more than a year out, but 2019 is likely to be a significant year for the field, particularly in areas like international interest, industry consolidation and pricing. That was the theme of a panel discussion Monday morning at Biotech Showcase in San Francisco, which coincides with the 2019 J.P. Morgan Healthcare Conference.

Moderated by Audentes Therapeutics CEO Matthew Patterson, the panel, “The outlook for gene therapy in 2019,” was sponsored by the Alliance for Regenerative Medicine. The panelists were bluebird bio CFO Jeffrey Walsh; Homology Medicines CEO Arthur Tzianobos; Spark Therapeutics Chief Business Officer Dan Faga; and Precision BioSciences CEO Matthew Kane.

2018 saw significant milestones in the field of gene editing and gene therapy – both for good and ill. Faga noted, for example, that Spark has delivered 75 doses of Luxturna (voretigene neparvovec-rzyl), which received FDA approval in December 2017 for biallelic RPE65 mutation-associated retinal dystrophy, a rare genetic disease that causes blindness. On the less benevolent side, 2018 also saw a global controversy erupt when a Chinese scientist, He Jiankui, announced in November he had used CRISPR/Cas9 to genetically engineer two babies to be resistant to HIV. He is now reportedly under house arrest in Shenzhen, just north of Hong Kong.

On the one hand, Kane remarked, CRISPR has been a tremendously positive development for basic research by making gene editing easier. “The flipside of that is that anyone can use it, and we knew something like this would happen at some point,” he said, referring to the CRISPR babies controversy. However, he added he was impressed with the level-headed response to it, particularly from investors, who did not run away from the technology.

And 2019 is likely to see more stakeholders running toward, not away from, gene therapy.

One trend that may become more prominent is internationalization, Walsh said. He pointed to the growth of centers of excellence focused on gene therapy, likely in the US but particularly in Europe. “We’re seeing institutions, hospitals within Europe building out units within the hospital geared toward not only populations in countries with disease, but also to become the preeminent gene and cell therapy institution for international care,” he said. Driving that trend is the anticipation that there will be more patients coming in from abroad, such as beta-thalassemia patients from places like Southeast Asia. One of bluebird’s leading product candidates is LentiGlobin, a lentiviral-based gene therapy for the disease. The European Medicines Agency accepted bluebird’s regulatory approval application for LentiGlobin in October, and an accelerated assessment granted in July means a decision this quarter. Beta-thalassemia is more prevalent in Europe – particularly the Mediterranean – as well as the Middle East and North Africa than in the US. LentiGlobin is also in Phase I/II development for sickle cell disease.

Yet, one area of disagreement centered around the topic of mergers and acquisitions in the gene therapy sector.

Tzianabos pointed to what he called the “laundry list” of companies coming into the space and clinical development listed in a presentation to kick off the session by ARM CEO Janet Lambert. The presentation pointed to 362 ongoing gene therapy clinical trials, including 32 that are Phase III. Eight gene therapy programs are expected to have data readouts this year, including one Phase III study, namely GenSight Biologics’ trial of GS010, an adeno-associated viral vector gene therapy, in Leber hereditary optic neuropathy.

Given the level of activity, Tzianabos said consolidation this year is likely, as large biotechnology and pharmaceutical companies will look and find they cannot survive if they are not in the gene therapy space. “I think what we’ll start to see is big guys coming in and swooping in and taking over,” he said.

But Faga countered that buyouts by larger companies will likely depend on where gene therapy companies are focused, and it’s uncertain that gene therapy developers pose a threat in the therapeutic spaces where large drug companies currently operate. Until that’s the case, he said acquisitions by large pharmaceutical companies will likely be on hold. What he has seen instead is a few companies step into the space, pointing to Spark’s partnership with Swiss drugmaker Novartis. However, Novartis jumped into gene therapy last year when it bought AveXis for $8.7 billion. The acquisition included Zolgensma (onasemnogene abeparvovec-xxxx) for spinal muscular atrophy, a Biologics License Application for which the FDA accepted in December.

Given Novartis’s stated intent to price Zolgensma at $4-5 million per patient, it should come as no surprise that one especially contentious topic in the area of cell and gene therapy next year will be pricing. Indeed, experts have long pointed out that the high prices of gene therapies will require innovative new pricing models; in a recent MedCity News guest post, CRA vice president for life sciences Pascale Diesel listed models such as value-based prices, annuity payments and expanded risk pools. In the panel discussion, Faga pointed out that thanks to performance-based reimbursement arrangements around Luxturna, no patients eligible for coverage have had to pay out of pocket for the therapy, which hit the market with an $425,000 per eye price tag. But, Patterson said, there will need to be some kind of deal with the Centers for Medicare and Medicaid Services to allow it to better implement payment-over-time structures. Last year, CMS quietly pulled out of a performance-based pricing agreement with Novartis around the CAR-T cell therapy Kymriah (tisagenlecleucel) after scrutiny by the Department of Health and Human Services and congressional investigators.

Photo: Alaric DeArment, MedCity News