Report: Commercial Viability of Gene Therapy Treatments Remain

Gene Therapy

A new report highlights some concerns about the long-term commercial viability of game-changing gene therapies that can radically transform the lives of patients.

Analytics group GlobalData highlighted a recent Goldman Sachs biotech report that raised some concern about the long-term commercial benefits of new “one-and-done” gene therapy treatments. The Goldman Sachs report said curing patients through the gene therapy treatments is not a sustainable business model and will hurt long-term profits for pharma and biotech companies. Gene therapies differ from more typical treatments due to the fact they seek to cure diseases in a single treatment, as opposed to treating disease symptoms continuously over time, the report said. In order for companies to see a financial benefit from the development and sale of one-time gene therapy treatments, a “hefty price tag” would have to be included.

GlobalData pointed to GlaxoSmithKline’s recent move to divest its rare disease gene therapy business to Orchard Therapeutics. Orchard, which launched in 2016, received a number of gene therapy programs as part of the deal, which is expected to complement its existing pipeline of clinical and preclinical gene therapies for primary immune deficiencies and inherited metabolic disorders. For its part, GSK received a 19.9 percent equity stake in Orchard, potential royalties from any approved therapies and a seat on that company’s board of directors.

David Brown, a healthcare analyst at GlobalData, said GSK’s move indicated a “lack of confidence in sustaining a profitable business model in the realm of curing rare disease.”

“It is currently unclear whether gene therapy pipelines will produce sustainable revenue in the long term,” Brown said.

Additionally, the report points to Spark Therapeutics gene therapy Luxturna as an example. In December 2017 the U.S. Food and Drug Administration (FDA) gave Luxturna the green light as a treatment for pediatric and adult patients with confirmed biallelic RPE65 mutation-associated retinal dystrophy. The disease can lead to vision loss and may cause complete blindness in certain patients. Biallelic RPE65 mutation-associated retinal dystrophy affects between 1,000 and 2,000 patients in the United States. Luxturna uses a naturally occurring adeno-associated virus (AAV) that has been modified using recombinant DNA techniques to deliver a normal copy of the RPE65 gene directly to retinal cells. The cells then produce the normal protein that converts light to an electrical signal in the retina to restore patient’s vision loss.

The Spark treatment does come with a significant price tag. In January the company revealed the wholesale cost of the treatment would be $425,000 per eye or $850,000 for both eyes. At 850,000 for both eyes, Luxturna became the most expensive therapy in the United States. Still, that wholesale price came in at the low-end of speculation by analysts, who predicted the gene therapy could have a price as much as $1 million, or $500,000 per eye. GlobalData noted that that price tag triggered an investigation by the Institute for Clinical and Economic Review (ICER), which claimed in its own report that the price of Luxturna should be 75 percent to 82 percent lower to “meet commonly accepted cost-effectiveness thresholds.”

Ultimately, the Goldman Sachs reports suggested three major avenues for companies to pursue their gene therapy products: target large value markets, target diseases with high incidence and place a high priority on innovation and portfolio expansion. As an example of following through on this kind of thinking, GlobalData pointed to Novartis AG$8.7 billion acquisition of AveXis, the developer of AVXS-101, which treats spinal muscular atrophy. AVXS-101 has received Orphan Drug designation as well as Breakthrough Therapy designation. The therapy, if approved, would compete with Biogen’s Spinraza, the only approved SMA treatment in the United States.

“This portfolio expansion into the gene therapy space strengthens Novartis’ position with regards to future acquisitions. If Novartis’ gene therapy is approved, it will be important to keep an eye on what its price point is and whether payers are capable of adapting to and supporting these types of therapies,” Brown said. 

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