By Adam Schoen, Partner, Brown Rudnick LLP Global Life Sciences Practice Group
Cell and gene therapies could potentially bring significant clinical benefits to patients by directly targeting the underlying cause of disease. For example, instead of treating symptoms of disease, a prolonged and costly undertaking, a one-time gene therapy treatment has the potential to fundamentally address the root cause. This can be done by inserting a missing gene into a patient’s DNA, known as gene therapy, or repairing a defective gene, which is known as gene editing. While certainly not without risks and still in early stages, these emerging therapeutics are promising, and the unmet need to treat or cure rare diseases is significant. National Institutes of Health (NIH) estimates there are about 7,000 rare diseases that affect more than 25 million Americans, and many have no approved therapies.
Gene therapy drew large investor interest a few decades ago, but this vanished following an unexpected patient death and the occurrence of certain cancers within clinical studies. Cell therapy also generated significant investor interest, but this likewise cooled after a string of clinical and commercial setbacks.
Both technologies are now making substantial advancements based on numerous factors. First, academic laboratories have continued to pursue research for both cell and gene therapies. Accordingly, significant progress has been made on the underlying science required to develop a next generation approach for numerous indications. In cell therapy, there have been significant advances that improve manufacturing of autologous therapies. Furthermore, much work has been committed to moving-to and advancing allogenic approaches to thereby enable an off-the-shelf universal cell therapy product. In gene therapy, there has been significant amounts of research in platforms that aim to overcome the limitations of current vectors (such as the size of the transgene, suboptimal tropism, or the triggering of an immune response) that enable nonviral delivery methods, reduce manufacturing costs, and expand manufacturing capacity. Addressing these prior shortcomings in manufacturing makes cell and gene therapies more attractive for investment, because manufacturing has been a major hurdle in the past to commercializing such therapies.
Furthermore, CRISPR (clustered regularly interspaced short palindromic repeats) gene editing-based therapeutics present a long-term growth opportunity, generating significant excitement and investment in the technology.
Second, interest from larger strategics, such as larger pharmaceutical companies, in this field has seen dramatic increases over the past few years. Much of the innovation and development in gene and cell therapy have been accomplished by start-up or venture-backed early-stage companies and research organizations, such as universities. Many of these companies have developed and optimized their platforms and associated manufacturing. When combined with the current funding climate, this has enabled many of these companies to quickly scale to multiple clinical programs across multiple therapeutic areas. As these technologies mature, large pharmaceutical companies are becoming more excited about partnering or owning these platform technologies. Accordingly, there is a reemergence of gene therapy and the evolution of new treatments, such as chimeric antigen receptor (CAR)-T cell therapies, which have been fueled by billions of dollars of private and public capital being invested in new companies.
Third, gene and cell therapies are receiving favorable, and sometimes accelerated pathways, at the Food and Drug Administration. Particularly for the field of gene therapy, there has been an opportunity for gene therapies to come to market under an accelerated regulatory review pathway (for example, a regenerative medicine advanced therapy or breakthrough designation by the Food and Drug Administration), which expedites the approval process.
Finally, there is an opportunity to produce first-in-class and/or best-in-class treatments in less crowded disease indications. For example, there has been interest from companies and investors related to the application of cell and gene therapies to address neurological disorders. Traditionally, the blood-brain barrier has been an impediment to treating neurological disorders, particularly with the use of small molecules. Cell and gene therapies offer an opportunity to provide therapies that more readily cross the blood-brain barrier without triggering a patient’s immune system, such as occurs with the use of unengineered adeno-associated virus-derived vectors, providing localized gene delivery with few side effects.
The blood-brain barrier produces one of the top challenges that make it difficult to develop treatments for neurological diseases. The barrier effectively blocks most drugs infused in the blood from getting into the brain and spinal cord to deliver their treatment payload to the right target. Overcoming that challenge is a major step forward for the fields of cell and gene therapies, which provides a brand-new era of possibility for new treatments and cures for many neurological diseases.
Particularly, the demand for neurological disease therapies has increased in part due to an aging population, which produces a growing health related burden. This produces a large addressable market. With an aging baby boomer population, the market for new therapies and cures is growing rapidly and exponentially. Today’s central nervous system disease market may be on the verge of experiencing the same boom that has driven the cancer therapy market over the past two decades.
Specifically, and according to the World Health Organization, central nervous system (CNS) diseases affect approximately one billion people worldwide. With innovation and the potential to cure neurological diseases at an all-time high, investors and biopharmaceutical collaborators are starting to take notice of new gene and cell therapy technologies as viable catalysts for growth. This is already starting to happen.
The FDA has said it expects by next year to be receiving more than 200 new drug applications annually for gene therapies, building on the more than 800 applications it already has. By 2025, FDA expects to be approving 10 to 20 such products each year. These types of treatments often receive priority designations, demonstrating the Food and Drug Administration’s commitment to expediting their development and review. The number of gene therapy projects has increased rapidly in recent years. It is believed that recently launched and pipeline cell therapy products will reach 40% of the top twenty pharmaceuticals 2018–2024 cumulative sales, and gene therapy products specifically will reach 7%.
Furthermore, recent commercial activity illustrates and further confirms investor and strategic interest in these therapeutic modalities. In February 2019, Roche announced it would acquire Spark Therapeutics for a 122% premium. Shortly after the Spark news, Biogen announced its acquisition of Nightstar Therapeutics for a premium of 68%, which company has an array of gene therapies.
Given the growing interest and opportunities in cell and gene therapy, it is important to be able to gauge the attractiveness of each technology platform. An important issue in these spaces related to intellectual property and particularly, what are the intellectual property considerations that allow for market position and differentiation.
In cell therapy, the move to allogenic products from autologous products offers a significant market differentiator and numerous companies are promising development of such products. Such companies are contemplating use of gene editing technologies to silence certain genes implicated in the immune response. By silencing such genes, an engineered immune cell product could be given to a patient without being attacked by the patient’s own immune system. That would be a significant market differentiator in cell therapy, allowing for a single source of cells to treat many patients.
However, the popular gene editing technology (CRISPR/CAS9) now that many of these companies favor for creating such allogenic cell products is undergoing heavy dispute between multiple parties as to who owns this technology. These parties are in ongoing disputes with each other in the United States and Europe, and these disputes are expected to continue for many years. This fight could have a chilling effect on the use of gene editing for creating an allogenic immune cell product because innovator companies cannot determine from whom they need to obtain rights to use CRISPR to create their products.
In the gene therapy space, a challenge with the available synthetic viruses used for the treatment of genetic disorders is that they originate from wild-type viruses. These viruses benefit from infecting as many cells as possible in the body, while therapies should most often target a particular cell type, for example, dopamine neurons in the brain. To solve this problem, gene therapy companies are developing adeno-associated virus (AAV) capsid modifications to enable the generation of recombinant vectors with tailored properties and tropism, thereby allowing for targeting of these vectors to particular places in a patient and de-targeting other locations (such as organs like the liver or heart). The ability to develop a proprietary delivery platform is valuable for a gene therapy company and many companies are looking to obtain proprietary positions for their viral vector platforms. For example, it would be valuable for a gene therapy to be able to protect a virus platform designed to target human dopamine neurons in vivo and to transport along the connective pathways in the brain, allowing for unprecedented accuracy of the therapy.
Gene and cell therapies offer the potential of a lifetime of savings with a one-time treatment, and the biggest benefit is immeasurable: the promise and potential for a better quality of life for patients, their families, and caretakers. As technology advances in cell and gene therapy and investment continues in these technologies, we are moving closer to a world where life-changing and life-saving neurological therapies are an option available to anyone who needs it, and that is the world we may soon be able to envision over the coming decade.
 Anastasia Amoroso, “Gene therapy's potential to change lives and industry Groundbreaking work on potential treatments—and cures—for cancers and rare diseases is changing how companies and investors think about biotech”, 2020, https://www.jpmorgan.com/wealth-management/wealth-partners/insights/gene-therapys-potential-to-change-lives-and-industry.