Gene Therapy: Will it Unlock Miracle Cures? A Q&A with Analyst Difei Yang

Jim Gorman
Jim Gorman Director, Mizuho Americas
March 15, 2019

An original version of this article was published on March 5, 2018.

Perhaps the most exciting prospect in modern healthcare is gene therapy, which treats diseases by transferring healthy genes to defective cells. In 30 years of gene therapy clinical trials, however, the promises have been big, but the successes small. Our therapeutic biotechnology analyst Difei Yang talks about advances in the field that piqued her desire to cover the space for investors.

Q: You began covering the gene therapy space last year. What have been the most important developments in the space?

A: The most important developments recently have been on the M&A front. Three of our covered companies have been acquired so far including AveXis, Spark Therapeutics, and Nightstar Therapeutics - all by larger Pharma and Biotech players, highlighting strong interest in the space. Gene therapy companies have developed valuable expertise in both clinical development and manufacturing, which can be applied across many disease areas and potentially disrupt the standard of care in some cases.

Q: Can you give a brief overview of the history of gene therapy?

A: Gene therapy dates back to the Human Genome Project in 1990 when scientists around the world collaborated to identify and map all the genes in the human genome. Gene therapy uses that map to isolate specific genetic diseases and repair the portion of a gene that is dysfunctional, while leaving the rest of the gene untouched.

Sounds straightforward, but delivering the treatment to the damaged gene is very difficult. These pathways, called ‘vectors,’ have been in development by scientists and doctors for the last 30 years.

In 1999, the first reported death caused by a vector’s side effects brought to a halt a huge surge of approved gene therapy-related trials. It took scientists more than 10 years to unravel the incident and clinical trial to resume.

Finally, in 2012 the Europe Medicines Agency (EMA) approved its first gene therapy, “Glybera,” a treatment for severe or multiple pancreatitis attacks. From there, progress grew steadily from 2013-2015, where clinical trials reached from phase 2 to phase 3, inching closer to the last stage before the FDA in this country can give approval. And, in 2017, Spark Therapeutics broke through with the first ever FDA-approved gene therapy in the U.S. for the treatment of an inherited genetic disease (Luxturna).

Q: What types of diseases are gene therapies being evaluated as a potential treatment for?

Theoretically, there is no limitation in diseases that can be treated. However, near term, we are most likely to see the biggest clinical success in monogenic disease, which is caused by single gene mutation. Diseases like cancer, however, are more complicated as they are caused by both gene mutation and environmental factors.

We are also seeing developments in Spinal Muscular Atrophy (SMA) and Hemophilia A and B, where patients with these diseases either do not have any other options, or the therapy is chronic, not curative and expensive.

Q: With pricing being a hot topic at the moment, how are these treatments being paid for?

A: Gene therapies are likely to carry high price tags because of their potential to be curative. For example, Spark’s aforementioned Luxturna costs $425,000 per eye. However, patients most likely won’t have to pay for these therapies directly, leaving insurance companies to bear the brunt of the cost. Also unique to gene therapy is that insurance payments are likely to be performance-based and companies are also evaluating installment-based payments. For example, Spark suggests examining patients 3 and 30 months post-procedure to evaluate whether the patient has benefitted from the treatment. Insurance companies are rebated based on the level of success of the treatment. If the treatment was a total success, Spark keeps the payment.

Q: And finally, what do you think gene therapy will look like in 10 years?

A: In the near term, gene therapy is most likely going to treat simple diseases. The quality of life improvement for these patients is expected to be dramatic. In 10 years, as we perfect technologies in gene therapy, we are likely to see a broader range of diseases being treated. It will no longer serve just monogenic alone, but cancer may be within the range of treatment as well. Along with that, as gene therapy is used to treat more patients, the cost of treatment is likely to go down as well.

Back to top