With the US FDA having approved its first ever gene therapy, it is a good time to be in this space. Orchard Therapeutics has taken full advantage, this week raising $110m to advance its treatment for severe combined immune deficiency disorder to a regulatory filing.
The once-and-done approach, with its expected premium price, has yet to be tested with US payers, and much will be learned in the coming months as Spark Therapeutics launches blindness drug Luxturna. Yet Orchard’s chief executive, Mark Rothera, believes payers can be won over. “I appreciate that this is a very important discussion,” he tells EP Vantage. “What is the right balance when you’re front-loading more of the cost of therapy, as opposed to a 20- or 30-year treatment horizon?”
For now, the group is focused on completing the clinical work for its lead candidate OTL-101, an ex-vivo lentiviral gene therapy for severe combined immune deficiency due to adenosine deaminase deficiency (ADA-SCID). This is the same indication for which Glaxosmithkline’s Strimvelis won EU approval in 2016, and could see Orchard potentially fighting over a population of somewhere between one in 200,000 and one in a million live births – Glaxo estimates there are 15 new patients a year in Europe.
Mr Rothera praises the work of Glaxo along with Fondazione Telethon and Ospedale San Raffaele – the Milan hospital where ADA-SCID patients receive Strimvelis – for having delivered the first genetic cure. The treatment is demanding: patients must travel to San Raffaele for harvesting of bone marrow stem cells and then a subsequent trip for re-infusion of CD34-positive cells transduced with retroviral vector that encodes for ADA.
Using a lentiviral approach, Mr Rothera says OTL-101, which also requires leukapheresis of blood cells or bone marrow and ex-vivo genetic correction, can be cryopreserved so that patients can be treated at an institution closer to home.
Aside from Strimvelis, the only option is chronic treatment with weekly injections of pegylated ADA, which protects white blood cells by preventing the buildup of toxic deoxyadenosine. But Mr Rothera points out that this approach has a 22% mortality rate at the 20 year mark, so better treatments are desperately needed.
“In the case of chronic enzyme replacement therapy, you spend a half-million [dollars] a year for 78% survival rate at 20 years,” he says.
Having been dosed in 50 patients, OTL-101 has achieved a 100% survival rate with follow-up out to five and a half years, and a 96% event-free survival.
“We’ve seen ADA enzyme levels return to clinically effective levels, which shows that we’re getting a durable response from a once-and-done gene therapy application that’s self-sustaining,” he says. “We’re seeing the immune system reconstituting. We see the patients able to fight infection on their own.”
If that efficacy can be sustained, Orchard will have a strong case for payers to cover OTL-101, though it will be crucial to set a price that is justified by the downstream benefit.
In the money
The $110m raised in its series B follows a £21m ($28m) series A at the UK-based group’s May 2016 launch and a $19m grant from the California Institute for Regenerative Medicine in November 2016, which was shared with researchers from UCLA. Mr Rothera says the new money will be used to advance OTL-101 to approval and launch as well as advancing earlier-stage products.
These earlier stage products include an X-linked chronic granulomatous disease project, for which Orchard signed a strategic alliance with the French group Généthon, and a mucopolysaccharidosis III candidate. The former is in phase II, and the latter still needs to begin testing in patients.
As for OTL-101, he says the group has set a goal for a US filing by the end of 2018 and intends a solo launch.
The series B money will provide a runway into 2019, Mr Rothera says, so planning for additional funding will take place next year. The presence of crossover fund Baillie Gifford in this round suggests that a public offering could be the next step.
Striking for an IPO while interest is strong might be a wise course. Waiting too long could run the risk that Luxturna or any subsequent gene therapies disappoint.
The likes of Spark, Bluebird Bio and Avexis show that there is an appetite among public equity investors for the risk-reward of gene and advanced regenerative therapies. However, the size and shape of Orchard's next financing may not be determined as much by the launch and price for Spark’s inherited blindness therapy Luxturna, or gene therapies’ progress in disease areas like haemophilia, as it is by the clinical performance of OTL-101.