Pharma giants like Novartis, Pfizer, and Sanofi are getting serious about a cutting edge therapy that changes human genes (NVS, PFE, SNY, BAYN)

Gene therapy

  • Pharma is getting serious about gene therapy, one-time treatments that modify genes to potentially cure serious diseases. 
  • Novartis is the first big pharma company to make a major bet on gene therapy, acquiring AveXis for $8.7 billion in April. 
  • Investment in the gene therapy space could change the way certain diseases are treated, although they come with high price tags. 

One-time drugs that can cure previously untreatable diseases by modifying human genes are starting to gain traction in the US.

These cutting-edge treatments, known as gene therapies, work by inserting new genetic code into the body, ultimately to start producing a protein that is missing or deficient. 

Recent M&A transactions show that big pharma is betting big on gene therapy. In April, Novartis gave an $8.7 billion endorsement to gene therapy with its acquisition of AveXis, a company that’s working on a treatment for spinal muscular atrophy, a rare genetic condition that affects muscle movement and is the leading genetic cause of infant mortality. Pfizer has also invested the space, acquiring in 2016 a gene therapy company called Bamboo in a deal worth as much as $645 million. 

The deals illustrate “that pharma’s starting to come off the sidelines and starting to believe that there’s some potential for those programs,” Adam Keeney, the global head of external innovation and R&D strategy at Sanofi Genzyme told Business Insider.

For its part, Sanofi has a collaboration with Voyager Therapeutics, which is working on gene therapies for neurodegenerative diseases. 

“We definitely feel this is important and ready for testing prime time,” Chris Haskell, vice president and head of West Coast Innovation Center at Bayer, said in an interview. “That is, we still need to see how it works in humans. You never know until you get it into patients.” Bayer has a partnership with Ultragenyx around its hemophilia gene therapy. 

Where to start

To start, gene therapies have been developed to treat rare conditions that only affect a small population of people and come with high price tags. So far, the FDA has approved one gene therapy that acts on a hereditary illness. The approval in December 2017 was for a treatment for a form of blindness called Leber congenital amaurosis, which affects two or three newborns out of 100,000.

The condition is caused by a gene defect that stops the retina from making a key protein. The one-time treatment is injected into the retina of the eye. From there, a virus carrying the corrected gene can get to work replacing the faulty gene and start producing the protein.

The therapy, made by Spark Therapeutics, has a price tag of $850,000, making it the most expensive drug ever approved in the US. The price came in lower than some analysts expectations, who thought Spark might charge $1 million.

These sky high prices largely fall to the government and health plans. 

The price tags can also be the downfall of these therapies. For example, the world’s first gene therapy, a treatment for a rare genetic disorder that causes problems with the pancreas, cost $1 million. It was only used once in Germany after a physician had to prepare a submission form as thick as “a thesis” and call the CEO of a German insurer to cover the cost, MIT Technology Review reported in 2016. In 2017, uniQure, the company behind the drug, withdrew it from the European market. 

As manufacturing these drugs improves and more treatments get closer to approval, there are a few areas that have emerged as the best places to start when exploring just how far-reaching gene therapy can get, Keeney said. 

The eye has emerged as a strong target for gene therapy treatments. As an organ, the eyes are easy to get to, and they also don’t react as strongly to foreign objects, in this case a virus carrying the gene therapy, getting introduced. 

Next up: blood disorders, such as hemophilia, a group of conditions in which the body has a hard time controlling blood clotting. Shire, BioMarin Pharmaceuticals, and Pfizer in collaboration with Spark, are all working on treatments for certain kinds of hemophilia. 

Gene therapy could be used in this instance to reintroduce or bolster the production of proteins known as clotting factors, which help the blood clot if you get a cut or have an internal bleed. 

Elsewhere, researchers are exploring how the liver could be a good target for gene therapies, as well as the brain. Gene therapies are in the works to treat Parkinson’s disease, a neurodegenerative condition characterized by motor symptoms such as shaking in the hands and legs, as well as stiffness and impaired balance.

What still needs to be sorted out

For now, gene therapies seem to fit best into conditions that affect smaller groups of patients and can serve as one-time treatments that ideally reverse the disease. Beyond that, it remains to be seen how these expensive therapies might play out. For example, developing a gene therapy for diabetes — a condition that affects millions of people — may not yet make the most sense, because there are other ways to treat the condition that are less expensive and less risky. 

“I think the utility outside very specific rare diseases is a question mark, and then the go-to-market and the business model of how are you going to set up an incentive system and a structure to allow those molecules to deliver commercially is still a bit of an open item,” Keeney said.

For now, the treatments are expensive, so convincing health plans and governments to pay for these drugs still remains to be seen. In the first three months of the year, Spark’s gene therapy Luxturna made $2.4 million in net sales, with three patients treated so far since its approval.  

Analysts at RBC said in May that it expected gene therapy to be used in about 32 patients in 2018, representing $21 million in sales. That may not seem like a lot compared to a blockbuster drug that makes billions and that treats tens of thousands or even millions of patients.

But the promise and the implications on the way we treat certain diseases could be bigger as more and more gene therapies make it to the market

Our objectives and the reason we’re excited about gene therapies is because we’re addressing the fundamental cause of the genetic disease,” Bob Smith, the head of Pfizer’s global gene therapy business, told Business Insider. That could mean correcting a disease at its root cause, rather than treating the symptoms indefinitely. “We have a high degree of confidence that these kinds of treatments could be truly transformational.”

FDA Commissioner Scott Gottlieb said at the BIO conference in Boston that he expects the FDA to approve 40 gene therapies by 2022.

“It’s clear that these new technologies are going to transform medicine, and human health. Gene therapy was largely a theoretical promise a few decades ago,” Gottlieb said in a speech in May.  “Now we should not only expect these products to cure disease, but we also ought to demand that we reach this objective.”

SEE ALSO: ‘We like to think of ourselves as the lead turtle in the race of the turtles’: How Big Pharma is turning to Silicon Valley to supercharge drug development

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Pharma giants like Novartis, Pfizer, and Sanofi are getting serious about a cutting edge therapy that changes human genes (NVS, PFE, SNY, BAYN)