Mustang and the bubble boy bubble

The value of Mustang Bio has tripled on data on its immune deficiency gene therapy. But investors might be too keen – and also too late.

Results showing Mustang Bio’s gene therapy to be safe and effective in eight patients with “bubble boy” disease were released nearly a year ago to very little reaction. Publication of almost identical data in the NEJM prompted the company’s shares to jump over 200% this morning. 

The reaction seems somewhat over the top since a gene therapy for a closely related disorder already exists and has not been a wild commercial success. Mustang’s therapy would not compete with Orchard Therapeutics’ Strimvelis if it were to reach market, but the biotech will be eager not to follow that product’s example.

Mustang is a majority-controlled subsidiary of another listed entity, Fortress Bio, which is up 40% today. It had licensed the gene therapy, called MB-107, last August from St Jude Children’s Research Hospital for just $1m up front, perhaps to diversify away from its CAR-T work.

Hold your horses

It is St Jude, rather than Mustang itself, that sponsors the phase I/II trial featured in the NEJM. The study is testing Mustang’s IL2RG gene therapy in 28 newly diagnosed X-linked severe combined immunodeficiency (X-SCID) patients between two months and two years of age. 

MB-107, which uses a lentiviral vector to transfer IL-2 receptor subunit gamma DNA to patients' own bone marrow stem cells, has certainly posted impressive results. Within four months of infusion it had allowed numbers of CD3+, CD4+, and naive CD4+ T cells and NK cells to normalise in seven of the first eight subjects. The eighth had an insufficient T-cell count initially, but the cells developed after a boost of gene-corrected cells.

The therapy had no unexpected side effects, and previous infections cleared in all eight patients. IgM levels normalised in seven of the eight infants, four of whom discontinued intravenous immune globulin supplementation; three of these four responded to vaccines. 

Characteristics of the first eight patients in the St Jude trial
Patient no (age at gene therapy) Vector copy number of graft (copies/cell) Follow-up (mths) Status at last follow-up
1 (6mth) 0.16* 24.9 CMV and coronavirus resolved, autoimmune cytopenia had developed but resolved
2 (3mth) 1.13 23.1 No longer receiving IV immune globulin, immunised**
3 (4mth) 0.80 20.1 No longer receiving IV immune globulin, immunised**
4 (14mth) 0.35 17.1 Disseminated BCG resolved, no longer receiving IV immune globulin, immunised
5 (3mth) 0.44 15.7 Outpatient
6 (11mth) 0.17 14.6 Disseminated BCG resolved, no longer receiving IV immune globulin, immunised**
7 (2mth) 1.10 11.1 Outpatient
8 (3mth) 0.36 6.7 Outpatient, ulcers resolved
* Patient 1 received a gene therapy boost 12 months after the first infusion because of poor reconstitution; vector copy number was 0.22 copies per cell.
** Responded to vaccines
Source: adapted from the NEJM.

Promising though this is, much of it was already known: data on these eight subjects were presented at the American Society of Gene & Cell Therapy meeting last May, and were summarised by Mustang three months later when it licensed MB-107 from St Jude. At that point Mustang said six of the eight patients had “achieved reconstituted immune systems” at four months post-treatment, with the remaining two “continuing to progress favourably”. Two of the six had discontinued immunoglobulin infusions. 

An even earlier cut on the first seven patients had been released in late 2017. The NEJM data are more detailed and have longer follow-up, but the markets seem to have been uncharacteristically slow to react.

Horses for courses

And the reaction seems optimistic considering the commercial performance of the only approved gene therapy in SCID: Strimvelis, developed by Glaxosmithkline and Molmed to treat SCID due to adenosine deaminase deficiency (ADA-SCID). That the product works is not disputed: clinical data showed a 100% survival rate at a median follow-up of seven years, and it was approved in Europe in May 2016. 

But when Glaxo sold Strimvelis to Orchard Therapeutics a year ago the product had made a grand total of five sales. The per-patient cost of more than $700,000 might have been a factor here, as might the sheer lack of patients to treat. The annual incidence of ADA-SCID is estimated at between one in 200,000 and one in 1,000,000 live births – somewhere between four and 20 new patients each year in the US. 

X-SCID is more common. There might be 2,000 to 3,000 patients in the US and Europe combined, according to Mustang and St Jude. But the issues the two assets face remain very similar.

Investors who have bought into Mustang – and Fortress Biotech – might be wise to bear in mind the case of Strimvelis, as well as the likelihood of an imminent equity raise. 

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