Last Updated on June 30, 2021 by Sultan Beardsley
Gene therapy involves inserting genetic material into cells to prevent, cure, or correct a disease caused by genetic abnormalities whereas gene editing involves making actual changes to the genetic code. Over the years this burgeoning biopharmaceutical industry has garnered a lot of attention and support from investors, as well as big pharma.
Companies like Sparks Therapeutics which was acquired by Roche (RHHBY) in 2019 for nearly $5B have succeeded in commercializing their gene therapy. Others like Regenx Bio (RGNX) have built up a portfolio of internal gene therapy programs while licensing out its viral-vector technology concomitantly. Another big pharma Novartis (NVS) deployed an acquisition strategy to gain exposure to the gene therapy market opportunity.
In 2018 NVS acquired Avexis pharmaceuticals for $8.7B and managed to get a gene therapy for pediatric patients with spinal muscular atrophy (SMA) approved in 2019. However, the fact is that most gene therapy companies have failed or struggled at best. Over the years only 7 of the 100s if not 1000s of gene therapies that entered clinical development have made it to FDA approval.
In our view, there are four hurdles that any gene therapy technology must overcome to succeed; 1) FDA reluctance to host trial sites (only SGMO has gotten sites open in the U.S.); 2) dense regulatory requirements; 3) pricing scrutiny amplified by high development costs, and 3) manufacturing at scale. Gene editing technology may be even more challenging given that it goes a step further and makes changes to the patient’s DNA.
Last week on 6/25/21 Intellia Therapeutics (NTLA) and Regeneron Pharmaceuticals (REGN) reported encouraging interim Phase 1 gene editing data. The duo showed for the first time in humans the ability to make precise genetic changes eliciting a targeted biological effect with no apparent safety issues 28-days after treatment. This is undoubtedly a monumental achievement for mankind. Importantly, though, the interim analysis included biomarker data from just six patients and a clinical benefit still need to be confirmed. NTLA has plans to apply its technology in hereditary angioedema (HAE) as well.
Short sellers seized the opportunity to link the new data to BioCryst Pharmaceuticals (BCRX) and its peers. Bears argue NTLA could upset BCRX’s newly approved oral preventative HAE drug which made its commercial debut in December 2020. This could be true but it’s extremely immature to expect that outcome considering the infancy of NTLA/REGN’s gene-editing program and that the data reported Friday was not even in HAE, among other reasons. For now, we will continue to monitor their program and the gene therapy/editing landscape but our outlook for BCRX remains unchanged.