Plenty of choice remains for buyers of gene therapy

Despite the recent flurry of gene therapy deals there is still a fairly extensive list of affordable companies out there.

Analysis

Roche finally got its $4.8bn acquisition of Spark Therapeutics over the finishing line this week, and without having to sell off any assets. The conclusion of the Federal Trade Commission’s 10-month investigation, without conditions, could tempt other potential buyers of gene therapy assets back into the market. 

Astellas Pharma's $3bn play for Audentes Theapeutics earlier this month showed there is definite interest from pharma groups wishing to add new technologies to their pipelines. So far this year acquirers have spent over $17bn on products holding out the promise of a “one and done” treatment. A seeming willingness by regulators to approve novel gene therapy products has also helped drive interest.

With the Spark deal now done and Audentes also taken off the board, investor speculation has inevitably turned to who might be might be next, with the likes of Rocket Therapeutics and Regenexbio seeing their shares rise in the wake of the Audentes deal. In this analysis we look at some of the public and private gene therapy companies which might be ripe for due diligence.

Luxury end

When it comes to M&A speculation in the gene therapy space a number of names regularly crop up, Amicus Therapeutics, Bluebird Bio and Uniqure among them. 

Uniqure, for example, has one of the most promising haemophilia B gene therapies in the form of AMT-061. Despite being tested in only a handful of patients the company has achieved a market cap of $3bn. Anyone wishing to make a move might want to do so ahead of the readout of the pivotal Hope-B trial at the end of next year.

But if Uniqure’s price tag looks a little rich even before any acquisition premium is added, there are plenty of other lower-profile, more affordable gene therapy companies out there, both public and private.

Selected gene therapy companies
Company Clinical gene therapy programs  Stage of most advanced asset Market cap ($m)
Uniqure 5 Phase III 3,053
Orchard Therapeutics 6 Marketed 1,453
Homology Medicines 1 Phase II 941
Meiragtx 6 Phase II 784
Oxford Biomedica 6 Phase II 553
Voyager Therapeutics 2 Phase II 512
Abeona Therapeutics 2 Phase II 151
Lysogene 1 Phase III 27
Aruvant Sciences 1 Phase II Private
Freeline Therapeutics 1 Phase III Private
Source: EvaluatePharma.

As the Astellas deal shows, companies with their own gene therapy manufacturing capabilities and expertise will be in demand. Abeona Therapeutics, Meiragtx, Homology Medicines, and Oxford Biomedica all boast technology platforms capable of pumping out projects.

One of the oldest among these is Oxford Biomedica. The UK firm is finally seeing its decades-long focus on gene therapy bear fruit with its own pipeline of six clinical products, and collaborations with Sanofi, Novartis and other groups to provide lentiviral vector manufacturing. The group’s UK listing could also explain its low-looking market cap of $553m, despite planned ramp-ups in its production capabilities.

Ironically, one of Oxford Biomedica’s clients and fellow UK gene therapy group, Orchard Therapeutics, has managed to outpace its supplier on the valuation front. The US-listed company boasts six clinical products and in-licensed asset Strimvelis. 

Better the gene therapy devil you know

While technology platforms are always welcome, deal activity is also likely to focus on popular therapy areas: ophthalmology, neurology and rare diseases.

Meiragtx can count itself among the bigger ophthalmology players. The New York-based biotech is currently capitalised at $784m, and boasts a substantial AAV vector platform of six clinical stage gene therapies. Meiragtx’s ability to pump out pipeline products has already attracted the attention of big pharma with Johnson & Johnson opting to license three of its ophthalmology projects

One company that is actively courting interest is Abeona, which effectively hung up the for-sale sign in September. The group is also looking a lot cheaper following a slide in the shares after the FDA put a clinical hold on moving its lead product EB-101 into phase III in September. In-house manufacturing facilities and four clinical projects might blunt any buyer concerns.

For those more comfortable with risk, Voyager Therapeutics could represent a good punt. The company has hitched its gene therapy wagon to the central nervous system and has two products in the clinic for Parkinson’s disease. Given the issues with drug-based treatments for neurological conditions, gene therapy might be a potential solution, notwithstanding the significant challenges that remain here. These diseases can involve multiple genes and their biology is often not well understood.

This list, which is far from exhaustive, shows that there are gene therapy companies out there that might not break the bank. But those wanting to grab a slice of the action should remember that considerable risks remain in this space: the duration of effect of these treatments remains unknown, for example, while reimbursement questions linger. The phrase caveat emptor seems pertinent.

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