Just recently, I interviewed Dr. Reni Benjamin, Managing Director, Biotechnology Equity Research at Raymond James & Associates about the panel he moderated at ARM’s 2019 Cell & Gene Therapy Investor Day. In the article, Dr. Benjamin explained how investors are thinking about the cell and gene therapy space in 2019.
During our interview, he and I also got to talking about indication crowding and why it's a concern in cell and gene therapy. I found his insight helpful, and I believe you will, too.
Harris: Why is indication crowding a concern?
Benjamin: Normally, I wouldn’t think about indication crowding because either the indication is very big and can be addressed by multiple companies with multiple drugs — think lipid lowering drugs, like Lipitor – even though Pfizer was able to generate peak sales of $13 billion, there were ten other companies with their own products that generated multiple billions in revenue. Why? Because it was a huge market and one would either be treated chronically for the rest of their lives, or if they could not tolerate it, they would get switched to another drug.
Of course, this same idea does not apply to orphan diseases. In this case, where only several thousand patients are inflicted with a disease, only one or two drugs with equivalent efficacy is needed to treat all the patients. The key here is that the drugs are equivalent in efficacy and safety. If a better drug becomes available, then of course, it could grab market share and leave the others in the dust.
Harris: What are the challenges associated with it as it applies to cell/gene therapies?
Benjamin: Cell and Gene therapies add a new wrinkle. For the first time, we have the potential to be curative. That means that when you treat even large indications, the patient population declines over time since they are “cured.” Therefore, if the indication is becoming smaller over time, then new drugs being developed have a smaller and smaller pie to divide.
Harris: What are the potential solutions?
Benjamin: I don’t necessarily think we want a solution. After all, we develop drugs to cure diseases, not necessarily to keep drug companies in business. The only “solution” I can think of is for companies to continue to develop drugs for indications that don’t have many, if any, treatment options. One other solution is to tackle very large indications where one or two gene therapy companies can’t tackle the indication on their own due to manufacturing limitations.