The Real Test For Gene Therapy Is Yet To Come

It feels like we’re standing on the edge of a precipice. Despite the ho-hum recent performance of biotech stocks, amazing things are about to happen. And one of the most amazing of all is gene therapy.

While a number of different technologies get lumped together under that rubric, the common theme linking gene therapies is their aim to be one-time treatments--to fix rather than treat disease. CAR-T therapies like Yescarta and Kymriah are commercial examples, but we’re also looking at more “conventional” gene-replacement therapies. Luxturna from Spark Therapeutics is already approved while Bluebird Bio’s LentiGlobin for beta thalassemia is being filed for approval in Europe, with an application for sickle cell potentially close behind. Sarepta’s catchily-named AAVrh74.MHCK7.micro-Dystrophin, licensed from Myonexus in May, has already produced some impressive (if early) clinical results, and it seems like new advances in the field are happening every week.

Not surprising, then, that some relatively new and high-tech therapies already look long in the tooth. The received wisdom is that Biogen and Ionis Pharmaceuticals are working on borrowed time with Spinraza, their antisense therapy for spinal muscular atrophy. Is that because PTC Therapeutics could have an equally effective oral therapy? No, it’s because AveXis, now part of Novartis, has a gene therapy that could render ongoing therapy unnecessary.

But the commercial success of AVXS-101—and other gene therapies--remains in question. AveXis has clearly produced some amazing results in SMA, and it is a distinct possibility that its gene therapy will displace the vast majority of Spinraza sales. Yet about half the patients who received the one-time AVXS-101 therapy subsequently went on Spinraza treatment.

Too Much Change?

AveXis presents this as parents being cautious in the absence of clear data on whether infants have seen the benefits of gene therapy peak or level off, and suggests that using Spinraza following gene therapy will likely turn out to be unnecessary in the long run for most patients. That is certainly a solid possibility. But another is that some significant number of patients will continue to see incremental benefit from treatment subsequent to AVXS-101—which very much changes the one-and-done value proposition of gene therapy.

That’s especially troublesome, because gene therapy is trying to accomplish several difficult things at once. It is trying to affect a cure, meaning that the economic value of developing the treatment needs to be realized in a single administration. Gene therapy is typically going after relatively rare diseases, meaning there are less of these single administrations to go around. And gene therapy is typically expensive to make and administer, meaning the whole thing has to happen with worse margins than is typical for most drugs.

Theoretically, all these problems could be addressed by putting a very very high price tag on treatment. Yet despite years of stunning price increases, there does seem to be a limit beyond which payers will not go. Gilead Sciences never really got past objections over the price tag for its hepatitis C cures, selling them at a significant discount. The first two CAR-T therapies on the market raised eyebrows for their relatively low price tags.

Or take Luxturna, Spark Therapeutics’ gene therapy for a specific form of Leber congenital amaurosis. Priced at $425,000 per eye (effectively $850,000 per person), the treatment was actually priced below the $1 million many analysts were expecting. Yet the company has received pretty stiff pushback—including from the Institute for Clinical and Economic Review (ICER), which suggests the price should be 50% to 75% lower. (ICER had previously given its blessing to the price tags on Yescarta and Kymriah).

Spark is in a tough place. The company needs to treat as many existing LCA-10 cases as possible, because new cases appear so rarely that they won’t amount to much significant additional revenue. This is one-and-done in more than one way. And yet with the debate over pricing, Spark could find it difficult to gain traction. In the one quarter since the drug was launched, revenue was $2.4 million (three patients treated). One certainly can’t read much into this short period—Spark is still lining up agreements with treatment centers, establishing programs to identify and assist patients, and so on.

Still, it’s hard not to recall the experience of UniQure—the Dutch company that won European approval for a gene therapy to treat an extremely rare blood disorder called lipoprotein lipase deficiency (LPLD). A grand total of one patient was ever treated with the $1 million drug commercially, and UniQure finally pulled it from the market last year.

Spark, meanwhile, is pursuing some innovative ways to adapt to a medical system in which health is effectively rented rather than purchase. It is offering rebates for patients who don’t see improvement, and is offering to allow Medicare and Medicaid to pay installments, spreading the cost over time in a way that may be easier to adapt to current budgeting processes. It needs that approach to work, because significantly lowering price isn’t really a viable option.

With nearly 2,600 gene therapy clinical trials in the bag or underway, there are a lot of interested parties watching how this plays out.