Gene therapy deal-making shows no signs of stopping

Companies that want to play in rare diseases need to shop for gene therapies, but price tags are looking rich.

Is there a gene therapy bubble? If you believe, as the sellside does, that sales in this technology will double annually and reach an astonishing $13bn in six years, then the answer is no. But recent deals like Amicus’s $100m takeout of Celenex raise the question of whether expectations are getting ahead of reality.

Approval of the gene therapy Luxturna from Spark and clinical triumphs with projects like Biomarin’s valoctocogene roxaparvovec have certainly stimulated enthusiasm, helped along by an appetite for new technology and the perception that payers are less hostile to rare disease drugs. However, even a handful of million-dollar drugs would pile pressure onto an already stretched system, and something would have to give. In this light, current sales expectations start to look overblown.

Driving on LSD

Last week Amicus bought Celenex, a spinout of Nationwide Children’s Hospital in Ohio, for access to 10 gene therapy projects in lysosomal storage disorders developed by the hospital and Ohio State University. Included are two clinical-stage assets in Batten disease.

The deal, worth $100m plus up to $350m in milestones, comes after Axovant paid $30m to Oxford Biomedica for a Parkinson’s disease gene therapy, and Novartis paid $8.7bn for Avexis for a spinal muscular atrophy (SMA) asset. The likes of Pfizer, Allergan, Bristol-Myers Squibb and Biogen have committed hundreds of millions of dollars to gene therapy deals in recent years (Novartis move signals further gene therapy resurgence, January 25, 2018).

If projects like the Avexis-originated AVX-101 live up to blockbuster forecasts this could be money well spent. Certainly, curing a disease as devastating as SMA is a worthy goal. But pharma and payers have not finished navigating the unique commercial difficulty of once-and-done therapies whose price tags are pushing $1m.

Strategies such as paying only for responders, outcomes-based rebating and instalment payments have been proposed for Spark’s Luxturna, the first gene therapy approved by the US FDA. Spark’s unique approach to access for Luxturna has included direct sale to payers to avoid providers having to front the $700,000-a-patient cost and bill insurers.

Big expectations for the top 10 gene therapy projects
      Global sales ($m)
Product Company Indication  2020e 2022e 2024e
LentiGlobin Bluebird Bio Thalassaemia/sickle cell disease 105 735 1,890
AAVrh74.MHCK7.Micro-Dystrophin Sarepta Therapeutics Duchenne muscular dystrophy - 723 1,591
AVXS-101 Novartis Spinal muscular atrophy 488 1,159 1,339
Valoctocogene roxaparvovec Biomarin Pharmaceutical Haemophilia A 18 423 1,219
CTX001 Crispr Therapeutics Thalassaemia/sickle cell disease - 343 1,116
AMT-061 Uniqure Haemophilia B - 354 771
SPK-8011 Spark Therapeutics Haemophilia A - 122 458
VY-AADC01 Voyager Therapeutics Parkinson's disease - 85 406
Ad-RTS-hIL-12 Ziopharm Oncology Glioblastoma - 172 378
AT132 Audentes Therapeutics Muscular dystrophy 10 280 360
Total (all products) 1,074 5,975 12,998
Source: EvaluatePharma.

A sign that expectations for clinical-stage projects have overheated is the fact that, despite its privileged position as the first gene therapy to achieve US approval, Luxturna does not make the top 10 gene therapies in 2024, according to EvaluatePharma’s consensus of sellside analysts: the Spark product is 16th with $149m in forecast sales.

The top two places are taken by Bluebird's Lentiglobin and Sarepta's micro-dystrophin, projects that so far have been tested in just a handful of patients. The latter, an asset originated by Nationwide Children's Hospital, was put on US clinical hold in July, but today the company said the hold had been lifted.

And Strimvelis, the first big pharma-backed gene therapy, barely figures, with $2m in sales forecast in 2018. Orchard Therapeutics took possession of this agent from Glaxosmithkline earlier this year.

More from Amicus

Amicus has not make a secret about wanting to expand its gene therapy portfolio, citing Pompe and Fabry disease as conditions for which it is seeking assets. This should excite Spark, Audentes and Sangamo. The first two have Pompe projects: Spark’s has emerged from a partnership with the French group Généthon, while Audentes has published preclinical data on its candidate and has targeted a clinical trial in 2019.

Other companies with Pompe candidates include Avrobio with AVR-RD-03, and Actus Therapeutics, a private spinout of Asklepios, which has filed a record for AAV2/8-LSPhGAA. This project has emerged from Duke University’s laboratories.

In Fabry, Sangamo’s ST-920 gene therapy looks to be trailing Avrobio’s AVR-RD-01, which has begun enrolment into a phase II trial. In looking for partners, Amicus could do worse than Avrobio, although at a market capitalisation of just over $1bn a trade sale looks improbable, especially since Amicus executives have said they are unlikely to do anything bigger than the Celenex deal.

Amicus's next gene therapy targets?
  Project Company
Pompe disease SPK-GAA Spark Therapeutics
  AT-982 Audentes
  AVR-RD-03 Avrobio
  AAV2/8-LSPhGAA Actus Therapeutics
Fabry disease AVR-RD-01 Avrobio
  ST-920 Sangamo
Source: EvaluatePharma.

Other candidates that could be primed for partnership or acquisition by rare disease companies lacking gene therapies include Uniqure, Voyager and Ziopharm. Uniqure has been here before – as Amsterdam Molecular Therapeutics it achieved EU approval for Glybera, a now discontinued gene therapy for familial lipoprotein lipase deficiency. 

The company is in a race with Spark to launch the first factor IX gene therapy for haemophilia B, along with Sangamo, which has a zinc finger nuclease gene editing approach, SB-FIX. Interestingly, Pfizer has endorsed Spark's haemophilia B project, SP-9001, yet Uniqure's AMT-061 has the biggest forecast for a haemophilia B gene therapy project; this looks very high for such a tiny disease. 

Meanwhile, in a bigger indication, Parkinson's disease, Voyager’s VY-AADC01 emerged from laboratories at the University of California-San Francisco and has completed phase Ib (Voyager still has a long way to go with Parkinson’s gene therapy, March 9, 2018).

The question for pharma groups scouring partnering meetings for good gene therapy candidates is whether they can justify the current valuations. Following the lead of Amicus, Actus, Spark, Sarepta and others in this field – collaborating with university laboratories – and thus eliminating the middleman, could save bigger players time and money.

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