Glaxo's gene therapy exit prompts truce with Orchard

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Glaxosmithkline, like its peer Astrazeneca, recently decided that big pharma was no place for rare diseases, and today Glaxo’s one-time rival, the young UK start-up Orchard Therapeutics, emerged as the beneficiary.

Perhaps the biggest irony is that just months ago Glaxo was tipped as a licensee for Orchard’s lead asset, the “bubble boy” project OTL-101, which was touted as a better version of Strimvelis. Today’s deal – a turn-up under which it is Orchard that will take Strimvelis off Glaxo’s hands – is a tacit admission by Glaxo that the comparison with Strimvelis might have been correct.

Then again, perhaps the transaction is merely another indication that trying to charge huge prices for orphan drugs, no matter how justified, is just not worth the hassle for big pharma. Glaxo launched Strimvelis in 2016, but since then it has managed to treat only a handful of patients.

Italian job

Under today’s deal Orchard will take over Strimvelis, as well as three clinical and three preclinical assets that also fall under Glaxo’s three-way gene therapy tie-up with Fondazione Telethon and the Italian biotech Molmed.

Orchard will now have two ex vivo gene therapies for “bubble boy” disease (severe combined immunodeficiency), and at first sight these appear set to compete against each other; the situation would seem especially strange since this is a tiny market, with only 15 new patients diagnosed a year in Europe, by Glaxo’s estimation.

Orchard’s chief executive, Mark Rothera, draws an important geographical distinction, telling EP Vantage: “Strimvelis is the only gene therapy approved for patients in Europe, but outside Europe there is no gene therapy option. With OTL-101 our initial focus is to get an approval in the US.

“We’re filing with the FDA this year. In time we may also bring OTL-101 to Europe, and at that point patients will have a choice.”

Orchard's combined ex vivo gene therapy R&D pipeline
Asset Originator Indication Note
Marketed
Strimvelis Glaxosmithkline/Telethon/Molmed Severe combined immunodeficiency disease (bubble boy) Launched in EU in 2016
Phase III
OTL-101 Orchard/Genethon Severe combined immunodeficiency disease (bubble boy) 53 subjects treated; US filing due 2018
GSK2696274 Glaxosmithkline/Telethon/Molmed Metachromatic leukodystrophy NCT03392987
GSK2696275 Glaxosmithkline/Telethon/Molmed Wiskott-Aldrich syndrome Phase II data impressed at Ash 2015
Phase II
OTL-102 Orchard/Genethon X-linked chronic granulomatous disease MHRA approved phase I/II study in 20 subjects
GSK2696277 Glaxosmithkline/Telethon/Molmed Beta thalassemia NCT03275051
Preclinical
OTL-201 Orchard/Genethon Mucopolysaccharidosis type IIIA US orphan drug status
OTL-202 Orchard/Genethon Mucopolysaccharidosis type IIIB Phase I to start in 2019
Unnamed Glaxosmithkline/Telethon/Molmed Mucopolysaccharidosis type I Exclusive licence rights after clinical proof of concept
Unnamed Glaxosmithkline/Telethon/Molmed Chronic granulomatous disease Exclusive licence rights after clinical proof of concept
Unnamed Glaxosmithkline/Telethon/Molmed Globoid cell leukodystrophy Exclusive licence rights after clinical proof of concept
Source: EvaluatePharma & company filings.

Strimvelis and OTL-101 are not identical, differing in their use of gamma-retroviral and lentiviral vectors respectively, for instance, but Orchard is developing OTL-101 specifically to allow the modified cells to be cryopreserved, “so that ultimately patients can be treated in their home country, in their own system”.

This is in stark contrast to Strimvelis, which is only available at one Italian hospital, to which patients have to travel to have their modified stem cells reinfused – perhaps its main market drawback. “I think Strimvelis is capable of being cryopreserved,” admits Mr Rothera. “But that work just hasn’t been done.”

The addition of Strimvelis will instantly turn Orchard from a clinical-stage to a commercial company, and while no Glaxo staff are being transferred Mr Rothera highlights Orchard’s recent appointment of a chief commercial officer.

He says Orchard has committed to keeping Strimvelis manufacturing where it is, with Molmed. For OTL-101, meanwhile, he envisages vector manufacturing through Oxford Biomedica, while cell production will be done on a contract basis in the Netherlands by Lonza, and at a centre in Allendale, New Jersey.

Orchard raised $110m in a series B round in December (Interview – Orchard stocks up for filing with $110m harvest, December 21, 2017). The Glaxo deal “is a substantial catalyst to growing our portfolio, and we will be seeking additional funding in a private round”, says Mr Rochera.

Tough business

Though gene therapy is scoring regulatory breakthroughs it remains extremely difficult to turn it into a viable business, and Strimvelis is a case in point.

Perhaps this explains the terms of the Orchard transaction, which appears not to have seen any cash changing hands: Glaxo has taken a 19.9% equity stake in Orchard at an undisclosed valuation, and stands to receive future milestone fees and royalties.

But if Stimvelis really is a poor version of OTL-101 is it really worth the hassle of acquiring it? “If you put [the combined portfolio] together it really allows us to take a big step further,” insists the chief exec.

He also plays down the suggestion of Glaxo being a partner for OTL-101, floated in a February Bloomberg interview, stressing that Glaxo had already decided to take a step back from rare diseases last June. This resulted in an Ionis collaboration being ditched; two months ago Astra spun out some of its rare disease work into Viela Bio.

Mr Rothera also draws a sharp distinction between Orchard and gene therapy companies like Avexis, bought this month by Novartis for $8.7bn, and Bluebird, which have achieved monster valuations based on data in just a handful of subjects.

More than 120 have been treated with ex vivo gene therapies across the combined Orchard and Glaxo portfolio, he says. OTL-101’s main attraction is data from 53 subjects, all of whom remain alive up to five and a half years later, and 96% are event-free.

Strong data will be needed to persuade payers that prices of around $1m per patient are viable in this space. If nothing else Orchard has shown that this is a problem best left to biopharma’s junior players.

To contact the writer of this story email Jacob Plieth in London at jacobp@epvantage.com or follow @JacobPlieth on Twitter

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