gene & cell therapies — it’s show time!

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Based on the webinar on January 16, 2018 by Mike Rice, MS, MBA, Principal, Defined Health

Gene & Cell Therapies —It’s Show Time!

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has enabled a new paradigm in which the sequence of the human genome can be precisely mani-pulated to achieve a therapeutic effect. This includes the precise correction of mutations that cause disease, the addition of therapeutic genes to specific sites in the genome, and the removal of deleterious genes or genome sequences.

In the last several years there has been tremendous progress made in applying genome editing to various areas of gene and cell therapy, including antiviral strategies, cancer immunotherapies, and the treatment of monogenic hereditary disorders. Advances in delivery technologies are also creating more opportunities for genome editing, including ex vivo delivery to cells with virus-free components using mRNA and in vivo delivery with

efficient and tissue-specific viral and nanoparticle vectors. The many successes outlined in recent preclinical studies and the current progression of genome editing into the first clinical trials is a source of significant optimism for the future of the field and is reflected in the willingness of pharma, new biotechs and investors to make significant financial commitments.

Nevertheless, many challenges still remain to fully realize the potential of therapeutic genome editing for gene and cell therapy. Central to these challenges are the persistent

Gene therapy has historically been defined as the addition of new genes to human cells. However, the recent advent of genome-editing technologies


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issues of safety and delivery. Steady advances are being made both for increasing the specificity and precision of genome-editing tools and also for increasing the sensitivity of methods used for assessing this specificity genome-wide. However, it remains unclear whether all off-target effects can be accounted for in a therapy that targets one site within billions of DNA base pairs, involves the modification of billions of cells to achieve therapeutic levels, and is custom prepared for each patient-specific mutation. Furthermore, questions still remain about how the human immune system will respond to genetically modified cells or the in vivo administration of genome-editing tools such as the cas9 nuclease.

That being said, it seems that hurdles are overcome every day. The recent approvals by the FDA of three gene and cell therapies indicate that a therapeutic paradigm shift is upon us.

• On August 30, 2017, Novartis received the first-ever FDA approval for Kymriah, a CAR-T

cell therapy for children and young adults with B-cell ALL

• On October 18, 2017, the FDA approved Kite’s Yescarta, a CAR-T cell therapy that treats adults with certain types of large B-cell lymphoma

• On December 19, 2017, the FDA approved Luxturna, developed by Spark Therapeutics. Luxturna is a novel gene therapy that treats patients with a rare form of inherited vision loss

All three of these programs demonstrated dramatic efficacy in previously hopeless clinical situations, paving the way for a busy pipeline of advanced therapeutics expecting to seek FDA approval over the next several years. In fact, FDA commissioner Scott Gottlieb anticipates that the FDA may approve one gene and cell therapy each month over the course of 2018 under the Regenerative Medicine Advanced Therapies (RMAT) designation created last year to expedite review of these unique therapies.


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Gene therapy is among the hottest investment sectors in biotech.In the past, large pharma revenues were predominately driven by small molecule blockbuster drugs positioned for primary care markets of very broad indications. Over time those drugs lost patent exclusivity leading to generic price erosion and a rapid decline in revenue. Today we see high-value biologics focused on large specialty markets taking a much larger share of the drug market. Gene and cell therapies, regenerative medicine and nucleic acid technologies look to be the next wave in the evolution of therapeutic platforms. We also see a shift from a phenotypic drug development strategy to a more genotypic approach. In many cases, that increased specificity necessitates more complex strategies in order to develop therapies that are specifically tailored to disease pathologies and aligned with patients’ therapeutic needs.

When Strimvelis gained regulatory approval by the European Medicines Agency for the treatment of ADA-SCID

(Adenosine Deaminase Severe Combined ImmunoDeficiency) in May of 2016 it marked the first gene therapy with a truly curative profile to enter the market. But proof of concept

was achieved almost thirty years earlier when Dr. French Anderson and colleagues treated Ashanti DeSilva’s ADA-SCID by successfully replacing two mutant ADA alleles with normal genes delivered ex vivo to

her hematopoietic stem cell using gamma retroviral vectors. This early gene therapy success fueled investment into gene therapy in the 1990s, when hundreds of labs began experimenting with gene therapy as a technique to cure disease. However, the next decade did not yield another such clinical success and durable


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efficacy, and safety issues such as immunogenicity, positional oncogenesis and hepatotoxicity, among other unforeseen setbacks plagued the field.

Looking forward, there are still many questions and unknowns that remain, but we see several validated clinical platforms such as retroviral/lentiviral and adeno-associated viral gene transfer vectors, which have the potential to become versatile modular components for modifying cellular therapies and for treating many monogenetic diseases. Over the years gene therapy platforms have diversified and the players have grown in number. The Alliance

for Regenerative Medicine is currently tracking more than 850 regenerative medicines companies working in the fields of gene augmentation, gene editing and adoptive cellular immuno-oncology.

When we look at investment, we see that although 2017 was a slow year for IPOs, follow-on and venture financings were high. Total global investment in gene and cell therapies was $4.2B in 2017, up from $3.3B in 2016. This indicates a very healthy environment for developers of gene therapies driven by very dramatic scientific success and clinical translation.

Number of Gene/Cell Therapy Financings by Financing Type

2013 2014 2015 2016 2017

18

1214 13

25

9 9 9

5

18

31

24

38

41

All IPO Financings

All Follow-On Financings

All Venture Financings

Num

ber

of F

inan

cing

s

Source: BCIQ, DH Analysis


5

Annual Sum of Amount Raised by Financing Type

2013 2014 2015 2016 2017

$500M

$1B

$1.5B

$2B

$2.5B

$3B

$0

Sum

of A

mou

nt R

aise

d

All IPO Financings

All Follow-On Financings

All Venture Financings

There has also been a significant increase in acquisitions and alliances as many large biotech and pharma companies look for white space opportunities in order to balance their technology portfolios with gene editing tools, gene transfer vectors and cell processing capabilities.

Gene therapy integrates an array of technologies, devices and services to provide a therapeutic solution.

What is Gene Therapy?

According to the FDA, human gene therapy is the administration of genetic material to modify or manipulate the expression of a gene product or to alter the biological properties of living cells for therapeutic use.

Gene therapies can work by several mechanisms:

• Replacing a disease-causing gene with a healthy copy of the gene

• Inactivating a disease-causing gene that is not functioning properly

• Introducing a new or modified gene into the body to help treat a disease

Source: BCIQ, DH Analysis


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Gene therapy products are being studied to address significant unmet clinical needs. The first component of a gene therapy is the identified therapeutic indication with an unmet need significant enough to justify a therapy that is likely to necessitate complex, individualized manufacturing and therefore likely to be more expensive. The unmet need might be in any of the therapeutic areas, such as vaccines, monogenic diseases, infectious diseases, some polygenic diseases, or oncology.

Then you need a way to target and deliver the therapeutic gene or genetic repair strategy to a target cell in the affected organ tissues. Finding the optimal way to deliver a gene to the cell or tissue type has historically been the main challenge for gene and cell therapy. To do this, one needs a gene transfer vector. Most researchers use gene transfer vectors provided by nature: viruses. In some

ways, viruses are an ideal tool for ferrying genes into a cell, because actively penetrating cell membranes is already a capability that they are evolved to do as part of their life-cycle. Viruses are cellular parasites. Unlike plant or animal cells, or even bacteria, viruses can’t reproduce themselves. Instead, they penetrate cells and implant their viral genes; these genes then instruct the cell to express proteins and make more of the virus, one protein at a time.

Also, there are a number of non-viral vectors that are in preclinical and clinical development, including nanotechnologies, fragments, liposomes, nanoparticles

and a number of more biophysical methods

where a gene is injected into a cell by biolistics (e.g., gene gun) or electroporation. These strategies can

be employed both in vivo and ex vivo.

Lastly, there is a therapeutic intervention, or the payload that’s being delivered. This could be a chimeric antigen receptor (i.e. CAR), a suicide


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gene or an oncolytic virus. Gene augmentation strategies have often been used for monogenetic diseases where a mutated gene is complemented with a normal therapeutic equivalent. There are also a number of RNA silencing and microRNA strategies that are

being employed. Some of these can be synthetic, but there are also biologically delivered RNAi and miRNA strategies in development. There is also a lot of optimism around gene editing with CRISPRs, TALENS and Zinc finger nucleases.

Gene Therapy

Delivery Technology

Adenovirus (AdV)

Adeno-associated Virus (AAV)

Retro/Lentiviral

Other viral: POX, HSV, VACV, SV40

Non-viral: Plasmid/Fragment

Other non-viral: Liposome, electroporation, biolistics

Auto-Immune & Inflammatory Disease

Monogenic Disease

Infectious Disease

Polygenic Disease

Oncology

Clinical Need

TherapeuticPayload &

Therapeutic Strategies

Gene Knockout: RNAi, miRNA, siRNA, Antisense, CRISPR

Gene Augmentation: Transposons, RNAi, CRISPR, Gene switch

Gene Editing: ZFNs, CRISPRs, TALENs

Cytoreduction: Chimeric receptors, CARs, TARs

Targeting: Oncolytic viruses, Vaccines

Other?

Source: DH Analysis


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The therapeutic payload could utilize a number of therapeutic strategies to modulate transcription and/or translation of transferred genetic material and/or by integrating into the host genome to modify a person’s genes to treat or cure disease:

Augmentation

Complement a defective gene (recessive mutation) product with a normal gene or express therapeutic protein at supraphysiologic levels.

Knockout

Delete or interrupt a detrimental gene (dominant negative) to avoid toxic buildup or inactivation of normal allele.

Edit

Correct or modify a specific mutant allele to restore proper gene product function.

Cytoreduction

Lysis or destruction of affected tissue in situations such as hypertrophy or cancer.

Targeting

Targeted delivery

of payload or destruction of an antigen tagged cell or infectious agent.

Viral or non-viral ‘vectors’ are required to deliver the nucleic acids to the proper tissues and cell types using either an in vivo or an ex vivo method.

In vivo gene transfer: Nucleic acid enclosed in viral or non-viral vector is the drug

• The cloned genes are transferred directly into the organ tissues of the patient. This may be the only possible option in tissues where individual cells cannot be cultured in vitro in sufficient numbers (e.g. brain cells) and/or where cultured cells cannot be re-implanted efficiently in patients.

• Liposomes and certain viral vectors are increasingly being


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employed for this purpose.

• Vector-producing cells (VPCs) can also be used to transfer the gene to surrounding disease cells. The success of this approach is crucially dependent on the general efficiency of gene transfer and expression.

Ex vivo gene transfer: Genetically modified cells as therapeutics

• Transfer of cloned cells into cells grown in culture in vitro. Those cells which have been transformed successfully are selected, expanded by cell, then reintroduced into the patient.

• To avoid immune system rejection of the introduced cells, autologous cells are normally used: the cells are collected initially from the patient to be treated and grown in culture before being reintroduced into the same individual.

• Only applicable to tissues that can be removed from the body, altered genetically and returned to the patient

where they will engraft and survive for a long period of time (e.g. HSCs and skin cells).

The viral vectors that have been most validated in vivo have been various AAV programs that target different tissue types. AAV-9 predominantly targets CNS and AAV-8 predominantly targets the liver. Others have been modified to target other cell types.

Adenoviruses have typically been used in vaccines and oncology settings. They are being somewhat less employed

for genetic diseases even though there are some new adenoviral, gene editing approaches and some other innovative ways to

use them for treating monogenetic diseases.

The lentivirus has also become a validated technology

with ex vivo manipulations largely for introducing chimeric antigen receptors into T-Cells (CART-Cells), but also for introducing hemoglobin for hemoglobinopothies, enzymes for metabolic defects into hematopoietic stem cells (HSCs).


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Non-viral in vivo gene therapy is still facing some challenges, although there have been many innovations and improvements upon what has historically been used more on a research or reagent basis in vitro.

However, one way to make these therapeutic strategies more broadly available and to potentially bring down costs is to come up with ways to synthesize them. Advances in material science and

engineering holds tremendous promise for nanoparticles to precisely deliver therapeutic payloads in the near future.

Gene transfer vectors are used quite differently for genetic diseases than they are for oncology. AAV is predominantly used for in vivo treatments, whereas lentivirus and retroviruses are predominantly used in ex vivo manufacturing of cell therapies, mostly in the oncology setting.

Non-Malignant Gene Therapy Agents in WW Clinical Development by MOA/

Tech, n=417*

Oncology Gene Therapy Agents in WW Clinical Development by MOA/

Tech, n=506

181

144

10773

46

41

2217

1615

77

67

29

2312

10 1098 101 5

Unspecified Cell Therapy

Adoptive Cell Therapy

Non-Viral: Plasmid

Viral: Other Virus

Synthetic Nucleic Acid

Other VaccineViral: Adenovirus

Viral: Retrovirus

Viral: Adeno-Associated

Non-Viral: DNA/RNANon-Viral:

Nanoparticulate

Non-Viral: Biophysical

Other

Viral: Adenovirus

Viral: Retroviral

Viral: Lentivirus

Viral: Modified Vaccinia

Viral: Lentiviral

Other

Viral: Sendai Virus

Non-Viral: LNP

Gene Editing

*Excludes oncology and infectious disease agents. Source: Clarivate Analytics; DH Analysis


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Delivery: Viral Gene Therapy PlatformsThere is a growing toolkit of viral gene therapy platforms, although each of them has its pros and cons. Some of them are more effective at infecting and transducing dividing or

non-dividing cells but may elicit a potent immune response. Some are more effective in vivo and some are best suited for ex vivo use.

Technology

Adenovirus (AdV) ≤8 kB Episomal P: High packaging capacityC: Elicits a potent immune response;

transiently expressed transgene

In vivo

Poxvirus vectors >25 kB Cytoplasmic P: High stable insertion capacity, simple construction, high expression levels

C: Complex structure and biology, risk of cytopathic effects

In vivo

Retrovirus ≤8 kB Integrating P: Stable integration into host genomeC: Random insertion ➔ tumorigenesis

risk; only infects dividing cell types

Ex vivo

Lentivirus

* Indicates how a technology is used in its current format

8-10 kB Integrating P: Infects dividing or non-dividing cells; reduced tendency to cause cancer

C: Theoretical tumorigenesis risk

Ex vivo

Adeno-Associated Virus (AAV)

≤5 kB Episomal P: Non-pathogenic; infects dividing or non-dividing cells

C: Prior exposure ➔ immune rejection; DNA lost through cell division

In vivo

Herpes simplex virus vectors (HSV)

150 kB Integrating P: Neuronotropic featuresC: Difficult to keep virus action under

control

In vivo

Capacity Delivery* Integration Pros/Cons

Source: DH Analysis


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The gene therapy pipelineThere are close to 2,000 gene therapies that are currently in Preclinical and poised to move into Phase I. There are close to 1,000 therapies in Phase I and Phase II that are likely to

be in pivotal studies already or advance quickly and come up for FDA approval in the next few years. To date, five products have been proven and launched into US and European markets.

Historically we’ve had four families of engineered nucleases:

• Meganucleases (MEGAs): highly specific due to large recognition site (dsDNA sequences of 12 to 40 base pairs)

• Zinc finger nucleases (ZFNs): fusion of a zinc finger DNA-binding domain to a DNA-cleavage domain (nucleases)

• Transcription activator-like effector nucleases (TALENs): fusion of TALE DNA binding domain to a DNA cleavage domain (nucleases)

• Clustered regularly interspersed short palindromic repeats (CRISPRs): Delivery of Cas9 (an RNA-guided DNA endonuclease enzyme) and appropriate guide RNAs into

WW Gene Therapy PipelineNumber of Agents in Development by Phase, n=3117

Preclinical Phase 1 Phase 2 Phase 3 Registered Launched

1988

448504

9 2 5

500

1000

1500

2000

0Num

ber

of A

gent

s in

Dev

elop

men

t

Source: ADIS R&D Insight, Clarivate Analytics Cortellis, DH Analysis


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a cell used to cut the genome at a desired location

The technology has evolved quickly. Zinc fingers have been around for some time and while more laborious to construct, ZFNs have proven to be a tried and true targeting method. There have been a number of ex vivo ZFN therapeutic programs go into the clinic and recently we’ve seen the first patients being dosed in vivo. There’s also a lot of promise with CRISPR/Cas9 since you can target any sequence by designing a complementary guide RNA without having to re-engineer the nuclease. Efficacy and versatility in animal models lends optimism that it could be a very inexpensive and easy way to develop a therapeutic strategy to humans.

There are a number of things gene editing can accomplish that can’t be done with gene augmentation, such as correcting DNA microlesions such as nonsense, missense indel frameshift mutations, (homology-directed repair). Genes can be knocked out

by non-homologous end joining, and safe harbor sites can

be targeted to put in a transgene. It’s a very versatile tool kit that can be used to treat diseases that couldn’t be treated in the past.

In 2017, Sangamo Therapeutics announced that in a landmark Phase I/II clinical trial a patient received a therapy intended to precisely edit the DNA of cells directly inside the body. The goal of the study was to treat MPS II by inserting a corrective gene into a precise location in the DNA

of liver cells to enable the patient’s liver to produce a lifelong and stable supply of an enzyme he or

she currently lacks. All three of Sangamo’s in vivo genome editing product candidates have received FDA Fast Track and Orphan Drug designations.

Vertex Pharmaceuticals and CRISPR Therapeutics also announced in December their plans to co-develop and co-commercialize an investigational gene editing treatment as part of the companies’ previously announced collaboration.


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aimed at the discovery and development of new gene editing treatments that use the CRISPR/Cas9 technology. The treatment (CTX001) represents the first gene-based treatment that Vertex exclusively licensed from CRISPR Therapeutics as part of the collaboration.

However, there are still some questions about CRISPR/Cas9. Researchers have known for some time that using CRISPR can lead to “off-target” effects.

CRISPR/Cas9 works by sending a biological bloodhound, called guide RNA, to sniff out a target, then snip out unwanted DNA and insert DNA that can act therapeutically. But if the genome has multiple regions similar to the target, the CRISPR package can affect them too, causing unknown problems. Scientists might have to abandon the quick and dirty way they had hoped to track down such off-target effects and instead turn to whole-genome sequencing.

Creation of FDA Office of Tissues and Advanced Therapies (OTAT) and RMAT Designation Expediting Review of Gene and Cell Therapies

In 2016 the Regenerative Medicine Advanced Therapy (RMAT) designation was established under the 21st Century Cures Act to help reduce development times in the field of regenerative medicine. This has opened the door for companies for regenerative medicine to seek FDA approval for regenerative medicine. Regenerative medicine therapies are defined as cell therapies,

tissue engineering products and human cell/tissue products. Drugs intended to cure serious and life-threatening conditions

where preliminary clinical data suggests the potential

to address an unmet clinical need are given the

RMAT designation. This is analogous to a breakthrough therapy designation with the benefits of more frequent FDA interactions and fast track features.


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Recent and Expected Upcoming US/EU ApprovalsSource: EvaluatePharma

Anti-CD19 CAR-T (ZIOPHARM): NHL

UCARTCS1 (Cellectis): ALL

SPK-8011 (Spark): Hemophilia A

BMN-270 (BioMarin): Hemophilia A

DTX401 (Dimension): Glycogen Storage

VY-AADC01 (Voyager): Parkinson’s

Ad-RTS-hIL-12 (ZIOPHARM): Breast Cancer

AT132 (Audentes): Myotubular Myopathy

AT342 (Audentes): Crigler-Najjar

AAV-CNGB3 (AGTC): ACHM

SAR422459 (Sanofi): Stargardt

Pexa-Vec (Transgene): Hepatoma

SPK-TPP1 (Spark): Batten

LN-144 (Iovance): Melanoma

NurOwn (BrainStorm): ALS

NK-92 (NantKwest): NE Tumor

ECCO-50 (Cytori): Osteoarthritis

MultiStem (Pfizer): Stroke

StrataGraft (Mallinckrodt): Burns

2016/2017 2018 2019 2020

Cell

Ther

apy

Gen

e Tr

ansf

er Strimvelis (GSK): ADA-SCID

Kymriah (Novartis): ALL

Yescarta (Gilead): DLBCL

Luxturna (Spark): LCA/RP

AVXS-101 (AveXis): SMA

Lenti-D (bluebird): ALD

JCAR017 (Juno): NHL

BPX-501 (Bellicum): GvHD

JCAR015 (Juno): ALL

MAGE-A10 (Adaptimmune): NSCLC

LentiGlobin (bluebird): β-Thalassemia

SPK-7001 (Spark): CHM

DTX301 (Dimension): Urea Cycle

ABO-102 (Abeona): MPS III

AMT-060 (uniQure): Hemophilia B

EB-101 (Abeona): EB

Cx601 (TiGenix/Takeda): Crohns

ATA129 (Atara): EBV cancers

PLX-PAD (Pluristem): PAD

Habeo (Cytori): Scleroderma

ECCI-50 (Cytori): UI

NeoCart (Histogenics): Cartilage

JCAR014 (Juno): CLL

CMV-CTL (Atara): CMV infections

DCCI-10 (Cytori): Burns

Source: DH Analysis


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Analysts forecast rapid growth of advanced therapies over the next decade. Starting from an almost non-existent revenue base we see rapid growth going forward, largely driven by CAR-

Ts, but also by gene therapies for monogenetic diseases that are heading for approval. The analysis suggests that by 2022 this could be close to a $8B market.

US

Sale

s ($

BB)

2016A 2017F 2018F 2019F 2020F 2021F 2022F

1

2

3

4

5

6

7

8

9

0

US Sales of Advanced Therapeutics (2016A-2022F)

Cell Therapy Gene Therapy

$75M $136M$605M

$1,192M

$2,709M

$5,026M

$7,765M

But the question is, what happens after that? These are rare disorders. Once the prevalent population is treated, revenue drops off and you have to wait for new patients to be born to treat, some with a new incidence of <1:1 million live births. It needs to be understood

that the product lifecycle of these one-time curative treatments is very different than conventional chronic therapies, and in order to sustain gene therapy franchises, a different portfolio strategy may be necessary.

Source: EvaluatePharma, DH Analysis


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Regardless of how novel and innovative the technology is, gene and cell therapies are going to be reviewed and evaluated just like any other therapeutic drug. The needs of multiple stakeholders will need to be addressed as well as the competitive environments. Many of these therapies might be in markets where there is presently no therapeutic standard of care right now.

In other cases, such as enzyme replacement therapies for lysosomal storage disorders, hemophilias, and similar areas, the therapies will be entering well-established biologics markets that are also undergoing transformation. Long acting recombinant biologic products that work in refractory patients are changing the standard of care and raising the bar for efficacy, safety and convenience/compliance. As biosimilars enter the market, costs for these drugs will erode too. In those cases, it will be imperative for companies to demonstrate the value of their game changing one-time

curative treatment in this overall ecosphere.

There are also still issues with the R&D and commercial models. The biology is more tractable, but there are still risks associated with clinical translation. The regulatory environment is more favorable than it’s been in the last ten years, however, innovative clinical endpoints are necessary. These therapies don’t fit nicely into pharma’s scalability model. There are still a lot of complicated IP and stacking royalties. If multiple services, technologies and devices are involved in the delivery of these therapeutics to market, then it becomes more difficult to understand how net present value (NPV) is split at the end of the day. There are complex manufacturing issues, such as reproducibility, scalability and high cost of goods. Lastly, there are market access issues, such as value-based pricing in different payer systems and lack of longitudinal data on therapeutic durability. Is there a short effect or a long-term cure?


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Glybera

Glybera was the first gene therapy approved in Europe. Priced at $1M it treated a lipoprotein lipase deficiency in patients suffering from acute and chronic pancreatitis attacks. It was pulled from the market largely because it didn’t live up to the therapeutic promise one would expect from a $1M therapy, especially for European markets. The therapy’s maker, uniQure, decided not to renew marketing authorization in Europe and abandoned plans for commercialization in the US. However, Glybera did set the precedent for getting a gene therapy approved, as well as exposed the reimbursement issues associated with a one-time curative treatment that is very expensive.

Strimvelis

GSK’s Strimvelis was also approved in Europe. Strimvelis treats a very rare (~15 patients per year in Europe) immune deficiency called adenosine deaminase deficiency (ADA-SCID). Priced at $714,000, at the time it

was the most expensive drug on the market. Despite a money-back guarantee and pay-for-performance pricing model, Strimvelis faced reimbursement and payments hurdles and GSK struggled to make it a commercial success.

Kymriah

In August of 2017, Novartis received the first-ever FDA approval for a CAR-T cell therapy for children and young adults with B-cell ALL. At $475,000

many considered it a bargain. Novartis also employed some unique reimbursement models to share risk with payers. Full payment was due only if patients responded to therapy 30 days after initiating treatment and there were stipulations for complete remission and durability.

Yescarta

On October 18, 2017, the FDA approved Kite’s Yescarta, a CAR-T cell therapy that treats adults with certain types of large B-cell lymphoma. Priced at $373,000, Yescarta has a boxed warning for cytokine release syndrome (CRS) and neurologic

Pricing and Reimbursement


19

toxicities. CMS and some private insurers lack billing codes for CAR-T treatments, so Yescarta’s reimbursement situation is still being worked out with CMS and private insurers.

Luxturna

Most recently the FDA approved Luxturna, developed by Spark Therapeutics. Luxturna is a novel gene therapy that treats patients with a rare form of inherited vision loss. At $850,000 or $425,000 per eye, Spark also employed some unique reimbursement models to improve access, such as an

outcomes-based rebate linked to short- and long-term efficacy, alternative contracting model, and an installment payment option.

The takeaway is that innovative risk sharing models are being developed and experimented with, however, it remains to be seen what the best reimbursement model will look like. Likely there will be different strategies for different diseases, indications and treatments and also across different payer types between single payer systems, commercial payers and others.

Long-term market growth and maturationGiven the unique nature of advanced therapeutics, there is uncertainty as to how the market might grow and mature over the long term. One of the challenges for these therapies for rare disorders, which in some cases are ultra rare, is that there may be only several thousand patients available for treatment. Once you treat the population, what’s beyond that?

Gene therapy developers will likely need to think about a very different portfolio strategy than they would for chronically administered therapies for

broader conditions.

They will likely need to have a large pipeline leveraging their technology platform to yield programs that are stage-gapped to gain approval in rapid succession. This may prove to be challenging even for a well-capitalized biotech company unless regulatory agencies begin to implement innovative approval strategies for gene therapies produced for the same vector platform.

For example, if a hypothetical biotech development portfolio focused on one-time


20

Q: How will gene and cell therapies pair with existing therapies? What’s the strategic thinking around developing a gene or cell therapy as a monotherapy or in combination with something that’s already available?

Right now, many of the trials are looking at avoiding standard of care entirely. In a case like hemophilia, they’re trying to understand if a gene or cell therapy can be used while weaning a patient off of clotting drugs and avoid that standard of care. There’s a benefit to providing a baseline therapeutic advantage with gene therapy even if it doesn’t equate to a total cure. If we can take the chronic prophylactic setting for clotting factors or enzyme replacement and just utilize that for episodic times or decrease the burden on a patient

for using an enzyme replacement therapy or clotting factor therapy then there is value both from a price standpoint as well as a therapeutic benefit to the patient. We have seen gene therapies in combination with a small molecule regulator for expression. Some of that is employed into the therapeutic strategies that are in development to become complementary to the standard of care.

Q: Are payers willing to engage in potential pricing discussions early in the development process? What is the recommendation for when those discussions should begin?

You absolutely have to start reaching out to payers sooner rather than later. Payers are willing to talk. They’re certainly starting to think about these issues and how they can be worked out.

Q&A:

treatments that provided durable therapeutic benefit for high unmet need, ultra-rare (6000 prevalence, 30% eligible) monogenetic diseases and successfully launched a first-in-class new product every three years at a high price of $1 million per treatment, it would be challenging to maintain long-term investment growth given the low incidence of new available patients for treatment.

Some of these stage gapped development programs are likely to have setbacks and what then?

Therefore, biotechs need to consider balancing gene therapy portfolios with some larger, albeit riskier, indications or to develop disease specific franchise containing portfolios containing conventional, chronically administered biologic and small molecules along with their breakthrough gene therapies.


It’s also important to develop target product profiles as you head toward the regulatory and clinical evaluation of the product. Further, understand payer’s needs early on and to develop those strategies in the clinical trials so that by the time you put the dossier together to go to payers you have that evidence behind you.

Q: With a lot of these therapies there may be a concern that production capacity and the supply chain will have an impact on the availability of products. Are there any case studies for companies who have taken a forward leaning position and invested heavily in this process development capacity in order to meet demand?

This is a key issue in the process of developing either viral vectors themselves for in vivo treatments, but more importantly, ex vivo modified cell therapies. The logistics and manufacturing processes are incredibly important because it’s actually part of the product. You’re manufacturing an antibody that’s broadly useful and all these factors need to come together. There have been stories about the lack of capacity in making viral vectors and some of the limitations to many of these programs even from an early development standpoint where you need to get in line for access to your vectors. A lot of the more advanced gene therapy firms have identified

this as being a critical success factor and have developed their own internal manufacturing processes.

The other consideration is the high cost of goods. Lentiviral vectors used in CAR-Ts are significantly costly. A therapy that costs $475,000 per patient sounds expensive, but as much as $100,000-200,000 of that may be going to the lentiviral supplier as a raw material. So, it’s important to be able to multi-source viral vectors, if possible, to keep costs down.

Q: How willing is the FDA to expedite regulatory timelines and grant approval to gene and cell therapies?

It’s somewhat context dependent, but under the RMAT program companies are eligible for the same kind of breakthrough designation approval pathways of any other rare disorder, as long as they apply for the same kind of high unmet need conditions. The FDA appears to be very motivated and willing to work with developers of gene and cell therapies and to develop unique strategies to help these companies advance their therapies. They’re giving guidance on providing the right data for submission so the therapies are coming with packages that are worthy for approval at that time. It’s a good idea to interact with the FDA very early on and take their advice; they seem to be very collaborative.

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About the Speaker: Mike RiceMike leads Defined Health’s Advanced Therapeutics (Gene and Cell Therapeutics and Regenerative Medicine) and Rare Diseases practices. He also co-heads the oncology practice focusing on hematologic malignancies and genetically defined cancers. 20 years’ experience in biotech ventures defining strategic development and early commercial strategy for academic and biotech inventions pertaining to nucleic acids, gene therapy and cellular platforms applied across monogenetic diseases and oncology.

He studied molecular pharmacology, cancer genetics and the role of recombinational DNA repair enzymes such as RAD51 paralogs at Thomas Jefferson University’s Kimmel Cancer Institute. His thesis research led to pioneering gene editing technologies which served the basis of several gene therapy, diagnostics, and agribiotechnology firms. Mike holds an MBA, with a concentration in Biotechnology, from the Alfred Lerner School of Business and Economics, at the University of Delaware.

Mike is a member of ASGCT, ARM, SITC, ASCO, ASH, LES, and AHA.

About Defined HealthDefined Health is a leading business development strategy consultancy. We’ve been assisting clients in the pharmaceutical, biotech and life science investment industries for more than 25 years.

Defined Health has three core lines of business, each focused on helping companies build and strengthen development-stage assets— compounds, portfolios and platforms:

• Assessments & Valuations• Search & Evaluation• Growth Strategies

A key differentiator is the firm’s focus on defining value for early stage compounds as “proof of relevance” (“PoR”), looking beyond mechanistic proof-of-concept to demonstrate clear potential for clinical differentiation and commercial value.

Defined Health is a Cello Health business, and our position of trust can be leveraged for the long term, across the continuum of clinical development and “go to” market services.

For more information, visit www.definedhealth.com.

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gene & cell therapies — it’s show time!

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