Hereditary diseases are caused by mutations or deletions in (single) genes that lead to either dysfunctional or inadequate levels of proteins. RNA- or DNA-mediated gene supplementation and gene editing are next-generation disease-modifying therapies for such diseases. Gene supplementation/gene editing allows the root of a hereditary defect to be tackled in a single corrective action with a lifelong effect. However, its development has proven much more challenging than initially thought 30 years ago, and conventional approaches with varying levels of efficacy have been developed and are, in some cases, firmly established standards of care.
In this article, we explore a few diseases in which established companies selling conventional small molecules or biologicals may be threatened by impending gene supplementation/gene editing therapies. Some established players have responded by joining forces with newcomers, which may create interesting market dynamics in the near future.
Protein replacement therapy is used for the treatment of hemophilia, a hereditary disease affecting the body's ability to efficiently halt bleeding upon injury. The market for blood clotting factors, such as Factor VIII or Factor IX, is currently worth over $7 billion.
The companies selling these protein replacement therapies, including large pharmaceutical companies, such as Pfizer, Bayer, Novo Nordisk, and Shire/Baxalta, face potential threats from smaller hemophilia gene therapy players, such as BioMarin, UniQure, Sangamo, and Spark. Hemophilia gene therapies consist of supplying a functional copy of the Factor VIII (Hemophilia A) or Factor IX (Hemophilia B) gene packaged in an Adeno-associated viral (AAV) vector in most cases. The viral vectors, typically delivered in vivo through a one-time intravenous injection, transfect liver cells, which then produce blood clotting factors and release them into the blood. Initial data from phase 1/2 clinical trials are encouraging, and the first phase 3 trials are expected to start in 2018. If the phase 3 trials meet expectations and if an attractive price can be found upon market launch, hemophilia gene therapies will put serious pressure on the blood factor market.
Pfizer, a current supplier of blood clotting factors, is taking proactive measures in this upcoming battle by teaming up with both Sangamo and Spark, two of the hemophilia gene therapy frontrunners, to develop gene therapies for the treatment of Hemophilia A and Hemophilia B, respectively.
Duchenne muscular dystrophy
Duchenne muscular dystrophy (DMD) is an inherited X-linked disease that leads to severe muscular weakness. It is caused by mutations in the gene encoding dystrophin, which is responsible for connecting the cytoskeleton of muscle fibers to the extracellular matrix. The only disease-modifying therapy currently on the market is Sarepta Therapeutics’ Eteplirsen (Exondys 51), which targets an out-of-frame mutation implicated in 13% of DMD cases. Eteplirsen is a morpholino antisense oligomer that triggers the excision of the out-of-frame exon 51 during the pre-mRNA splicing of the dystrophin RNA transcript, leading to the production of truncated, yet functional dystrophin. Despite its approval by the FDA in 2016, Eteplirsen’s relatively poor efficacy has sparked a highly controversial debate. However, sales for 2017 are expected to reach approximately $125 million.
The field of DMD has seen increased gene supplementation therapy activities (e.g., Solid Biosciences is preparing an initial clinical trial for an AAV-based therapy that delivers a shortened, yet functional version of dystrophin) and gene editing therapy (e.g., CRISPR Therapeutics, Editas Medicine, and Exonics Therapeutics). For example, Exonics Therapeutics focuses on deleting out-of-frame exon 51 in the dystrophin gene, the same exon that Eteplirsen targets. However, unlike Eteplirsen, the effect of the Exonics Therapeutics approach is expected to be durable as the excision occurs at the DNA level. All of these DMD gene supplementation/editing therapies are still in the preclinical stage, and hence, still way out. The key challenge with these ongoing approaches will be to impact a sufficiently high fraction of the muscle cells and to supply enough functional dystrophin to restore muscle function. It is yet unclear whether this will be feasible in the foreseeable future.
Nonetheless, Sarepta Therapeutics, the company selling Eteplirsen, the only disease-modifying therapy for DMD, is preparing to compete with these challengers and has initiated a collaboration with Duke University around its DMD-targeted gene editing technology.
Recently developed small molecule drugs provide disease modifying therapy options for cystic fibrosis (CF). Companies such as Vertex Pharmaceuticals and Galapagos/Abbvie have developed small molecules that either potentiate the dysfunctional Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) protein or correct the intracellular trafficking of the CFTR protein. The Kalydexo and Orkambi drugs from Vertex are well underway to becoming blockbuster products, with combined sales for 2017 predicted to reach approximately $2 billion.
As the market leader in disease-modifying drugs for CF and driven by its desire to defend its growing CF franchise, Vertex Pharmaceuticals has initiated a collaboration with Moderna on mRNA therapies that treat the underlying cause of CF, enabling cells in the lungs to produce functional CFTR protein. AstraZeneca, which is historically strong in respiratory diseases, has also partnered with Ethris on an mRNA-based protein replacement therapy for CF.
Gene editing activities are also starting to emerge in the CF field; however, they are still at a very early stage. For example, Editas Medicine is active in this field and has received a $5 million grant from Cystic Fibrosis Foundation Therapeutics, the drug development affiliate of the non-profit Cystic Fibrosis Foundation. However, similar to DMD, scientists will need to devise effective ways to get the editing apparatus into the many epithelial cells affected by CF. Two options are being investigated: an in vivo approach, whereby vectors are delivered directly into the body of the patient, such as in the hemophilia gene therapy mentioned above, and the ex vivo approach, whereby cells are modified outside the patient and then delivered back into the desired tissues.
Spinal muscular atrophy
Spinal muscular atrophy (SMA) is a rare hereditary neuromuscular disorder characterized by the loss of motor neurons and progressive muscle wasting caused by mutations in the survival of motor neuron 2 (SMN2) gene. SMA is the leading genetic cause of infant death. Biogen commercializes Spinraza, the only disease-modifying SMA drug approved to date. Spinraza is an antisense oligonucleotide drug initially developed by Ionis Pharmaceuticals that modulates SMN2 gene splicing. Spinraza was launched in early 2017 and is expected to generate peak sales in the $1.5–2 billion range.
Spinraza is already experiencing serious competition from gene therapy. AveXis’s gene therapy product, AVXS-101, delivers a functional copy of the SMN1 gene into the motor neuron cells through an AAV9-based vector that crosses the blood-brain barrier. AveXis received FDA approval to start a pivotal trial in October 2017 after it reported positive data from an uncontrolled phase 1 trial. While it is dangerous to compare the phase 1 data of AVXS-101 to the phase 3 data of Spinraza, it is still striking that 9 of 12 AVXS-101-treated SMA babies were able to sit unassisted versus only 8% of Spinraza-treated babies. In addition, while AVXS-101 theoretically requires one-time intravenous or intrathecal administration, Spinraza must be administered intrathecally three times per year after four initial loading doses. It is unknown whether the effect of AVXS-101 will wane with time and whether the antibodies elevated against the AAV capsid protein will hamper re-administration.
Meanwhile, the interim clinical results from the small start-up company, AveXis, impact the stock price of big biotech Biogen. If the pivotal trial of AVXS-101 confirms the promising phase 1 data and if the product eventually obtains market approval, AveXis may disrupt Biogen’s nascent franchise, which would likely spark M&A activities among the players interested in rare diseases.
When assessing the potential of gene supplementation/editing for hereditary diseases, the technical challenges must be taken into consideration. For example, it is generally easier to treat confined spaces, such as the retina or vascular system, than more difficult-to-access tissues, such as the muscles or epithelial cells of various organs, as in the case of DMD and CF, respectively.
For some hereditary diseases, such as inherited eye diseases, gene supplementation/editing is the only option. For others, such as hemophilia, CF, and lysosomal storage disorders, other treatment options are available, some of which work relatively well. Due to increasing emphasis on value-based pricing by authorities and health insurance companies, gene supplementation/editing therapies must demonstrate their cost-effectiveness versus alternative treatment options, if available. This will set an upper limit on the price, and hence, on the revenue generation potential of gene supplementation/editing therapies.
Gene supplementation/editing therapies are starting to show promising data for selected diseases. Established companies that have stakes in conventional therapies for hereditary diseases are carefully evaluating impending competition from gene supplementation/editing therapy companies. Illustrative moves include the collaboration of Pfizer with Sangamo and Spark on hemophilia, Vertex with Moderna on CF, and Sarepta with Duke University on DMD, which are all indicative of their belief that gene supplementation/editing therapy may become a serious contender in the mid-term for conventional hereditary disease therapies. This could be a prelude for M&A activities in this market segment.