In January 2019, then-FDA commissioner Scott Gottlieb ushered in the new year with a bold prediction: The agency, he said, would be approving between 10 and 20 gene and cell therapies per year by 2025. At the time, there were a whopping 800 such therapies in the biopharma pipeline and the FDA was aiming to hire 50 new clinical reviewers to handle the development of the products.
That momentum will no doubt start to pick up in 2020, as several companies in late-stage development of their gene and cell therapies achieve key milestones or FDA approval. Among the companies expected to make major strides in gene and cell therapies next year are Biomarin, with valoctocogene roxaparvovec to treat hemophilia A, Sarepta and its gene therapy for Duchenne muscular dystrophy, plus multiple players developing CAR-T treatments for cancer, including Bristol-Myers Squibb and Gilead.
But with such explosive growth comes challenges. Gene and cell therapies require enormous up-front investing in complex manufacturing processes, as well as innovative approaches to securing insurance coverage for products that come with eye-popping price tags—such as Novartis’ $2 million gene therapy Zolgensma to treat spinal muscular atrophy. Those are just a few of the obstacles that will be front-and-center in 2020 as more gene and cell therapies make their way toward the finish line.
“Pharma companies will face challenges figuring out how to incorporate gene and cell therapies into their overall business,” said Michael Choy, partner and managing director at Boston Consulting Group, in an interview with FiercePharma. “They don’t fit well into the normal paradigms of budgeting and decision-making. They require a different pace of evolution and specialized expertise. For now, companies are shoe-horning gene therapies into their current model, but over the long-term there will have to be changes.”
That will become increasingly clear in 2020 as both Big Pharma and small up-and-comers move toward the clinic with their gene and cell therapies. John Zaia, M.D., director of the Center for Gene Therapy at City of Hope, predicts there will be at least three gene and cell therapy FDA approvals in 2020. He also expects to see momentum among companies seeking to improve on the technology to address unmet needs in medicine.
For example, Zaia believes off-the-shelf CAR-T cancer treatments will show promise in early studies—and will be met with enthusiasm in the cancer community, he told FiercePharma in an email. The first generation of FDA-approved CAR-T treatments, Novartis’ Kymriah and Gilead’s Yescarta, take several weeks to make because they require removing T cells from patients and engineering them to recognize and attack the patients’ cancers. Several companies are advancing off-the-shelf CAR-T treatments, including Precision BioSciences, which has been building out a manufacturing plant equipped to make 10,000 doses per year.
Gene therapies for inherited diseases will make strides in 2020, too, Zaia predicts. City of Hope is one of the participants in a phase 1 study of CSL Behring’s gene therapy to treat adults with sickle cell disease. CSL will be racing against several companies working on the disease, including Bluebird Bio, which is testing its beta thalassemia gene therapy Zynteglo in sickle cell. “There is a big push from many research centers to cure sickle cell disease and early results with the use of gene therapy look very promising,” Zaia said. “Years of research is finally coming to realization.”
With such robust R&D underway in gene and cell therapies, it’s no surprise several players are stepping up their investments in manufacturing. In October, Sanofi said it would retrofit a vaccine plant in France so it could be used for gene therapy manufacturing. Pfizer shelled out $19 million for a North Carolina facility that will serve as its manufacturing hub for gene therapies. Even Harvard University is getting into the game, working with a consortium of contract manufacturers to build a $50 million facility dedicated to making cell therapies and viral vectors for gene therapies.
But how will the healthcare system pay for all of these complex therapies? It’s a question that will continue to dog the industry, BCG’s Choy said. “There’s a lot of interest in outcomes-based payments and payments over time, but the issue is they’re very difficult to implement because the infrastructure to track outcomes over time doesn’t really exist,” he said.
Still, payers and pharma companies are hinting at their willingness to put that infrastructure in place. Pfizer, which is developing DMD and hemophilia gene therapies, said recently it’s brainstorming with payers on innovative strategies for reimbursement. Novartis and Spark have already pioneered payment strategies that deviate from the standard pay-everything-up-front system. Novartis has some pay-for-performance contracts in place for the $475,000 Kymriah. And in September, Cigna agreed to cover Novartis’ Zolgensma and Spark’s Luxturna on a per-month, per-member schedule.
Despite the many challenges in cell and gene therapy, some players are showing there’s likely to be a robust market for these innovative treatments. In its first quarter on the market, Zolgensma brought in $160 million in sales—far surpassing analysts’ expectations.
The promise of huge returns on gene and cell therapies will likely drive acquisitions in 2020, Choy predicted. “These treatments are so transformative for patients, and as the clinical proof of effectiveness continues to grow, you’re going to see a lot more deal-making in this area,” he said.
Buyers will likely show a willingness to invest in early-stage gene and cell therapies, especially if they come with technology platforms that allow for the development of many follow-up products, Choy added. “For these types of therapies, the lifecycles will be much shorter than they are for traditional pharmaceuticals, particularly for rare diseases,” he said. “If you administer a one-time therapy, that revenue peaks quite quickly and then drops off. So to have a sustainable revenue from a gene therapy business, you need to replace that, which requires managing a pipeline.”
Judging from recent events in the burgeoning gene and cell therapy industry, the news flow in 2020 will be generated not just by the industry’s largest players, but also by its upstarts. In December, Ferring Pharmaceuticals spinout FerGene turned heads with data showing that its gene therapy to treat non-muscle invasive bladder cancer eliminated tumors in more than half of participants in a phase 3 trial. And Gilead’s Kite Pharma just applied for FDA approval for its mantle cell lymphoma CAR-T, KTE-X19, based on a 93% overall response rate in a phase 2 trial.
There were 75 gene therapy clinical trials initiated in 2018, nearly doubling the trial starts of 2016—momentum that’s likely to continue next year, BCG said in a recent report. “The scientific foundation is in place,” BCG analysts concluded, “but there is still much to do to deliver the full benefit of gene therapy to patients.”