Large pharmaceutical companies have made gene therapy a priority with a series of acquisitions over the past several years, a stamp of validation for a field that's pushed through decades of ups and downs.
One of the latest buyers is German healthcare conglomerate Bayer, which in October inked a $2 billion deal for North Carolina gene therapy developer Asklepios Biopharmaceuticals, also known as AskBio.
For Bayer, the acquisition is part of a broader effort to build a gene and cell therapy division. But the deal is just as noteworthy for AskBio, an unusually large, privately held biotech based on the work of one of gene therapy's pioneers, Jude Samulski.
AskBio chose the security of a wealthy backer over independence and the chance to go public like several of its peers. And the deal helped the biotech quickly hire Katherine High, one of the few executives with experience shepherding a gene therapy through to regulatory approval. All of which makes the efforts of AskBio, now operating as an independent arm of Bayer, worth watching.
"I think we have the right people, the right chemistry, and the right amount of experience to make a difference here," Samulski said in an interview.
A "virtual" sabbatical
As 2019 drew to a close, so did a chapter in High's career. A hematologist by training, High, 69, has spent three decades working in gene therapy, a large portion of which was as a founder, president and chief scientific officer of Philadelphia biotech Spark Therapeutics.
At Spark, High had helped make history by steering the development of Luxturna, a treatment for a genetic form of blindness. When cleared by the Food and Drug Administration in late 2017, Luxturna became the first gene therapy for an inherited disease approved in the U.S. Roche swooped in soon after to acquire Spark, and closed the deal in December 2019.
High decided to take a year off from biopharma. But the coronavirus pandemic dashed her plans to conduct research at Rockefeller University. The institution reduced its staff to essential personnel, and the Harvard Club of New York City, where High, a Philadelphia resident, planned to stay during the week, closed its doors.
"My sabbatical turned into a virtual event, which was good; I got a lot of things done — review articles written, book chapters written, things like that," High said in an interview. "I really needed a break."
She spent time with her first grandchild, swam, and, fulfilling a longtime desire, remotely studied German at Middlebury College's storied language program.
But High couldn't keep away from drug research. During periodic visits to North Carolina, where she has family, High dropped in on Samulski and fellow AskBio co-founder Sheila Mikhail.
High has over the years both collaborated and competed with Samulski, a University of North Carolina researcher and expert in gene therapy delivery tools known as adeno-associated viruses, or AAVs. He formed AskBio in 2001 with another gene therapy researcher, Xiao Xiao, and CEO Sheila Mikhail, a life sciences attorney.
"Our paths have crossed, our students have crossed, our sciences [have] definitely cross-pollinated," Samulski said, describing High's academic work at University of Pennsylvania and his at UNC.
By the time of their meeting, AskBio had grown to become one of the gene therapy field's most unique. Originally bootstrapped with angel investing and backing from the Muscular Dystrophy Association, AskBio had spun multiple gene therapy programs into companies that were later acquired. The returns from those buyouts were then used by AskBio to build its own manufacturing capabilities, a crucial step for gene therapy products.
During High's visits, Samulski and Mikail shared some of the progress the company had made advancing its technology. Among them: the acquisition of a Scottish biotech whose technology may allow the company to more tightly control how much protein a gene therapy can produce. Doing so could help overcome a critical limitations of gene therapy, which can have widely varying effects from patient to patient.
"We have a roadmap, how to get from A to B," Samulski told High. "If you want to come in and champion that, we would love to have you."
As AskBio was courting High, Bayer was eyeing AskBio, which had put in motion plans for an initial public offering — a typical step for a biotech of its size.
Bayer had already announced plans to develop a cell and gene therapy division, acquiring Bluerock Therapeutics, a maker of "off-the-shelf" cell-based treatments, in 2019.
But the large pharma didn't have an anchor for its gene therapy ambitions. Marianne De Backer, Bayer's head of business strategy and development, had assembled a list of developers to pursue. AskBio was at the top.
"If you look at the [gene therapy] assets that are on the market today, like Zolgensma from Novartis, part of the technology is based on technology from AskBio," she said in an interview, referring to the Swiss company's spinal muscular atrophy treatment. A Duchenne muscular dystrophy treatment in late-stage testing at Pfizer also originated within AskBio, as did a Takeda program being studied in hemophilia.
De Backer faced two obstacles, though. Bayer, for one, didn't know the AskBio team, and couldn't meet them in person because of the travel restrictions that began during the pandemic.
"It was really almost a cold call," she said.
Bayer was also competing against the draw of a deep market for public stock offerings, which helped a record number of biotechs to IPO in 2020. De Backer said she needed to show AskBio that she could get the deal done quickly. So she and Mikhail spent six weeks hammering out terms, including an agreement the company could continue to operate independently — an "arm's length" arrangement like one Bayer made with BlueRock.
Such promises are often made, and eventually broken, when a larger company acquires a smaller one. But Samulski's concerns — that AskBio's work might be stifled within such a massive company — were eased after speaking with BlueRock CEO Emile Nuwaysir.
"[Nuwaysir] said, ‘they have left me alone, they've encouraged me to do what I'm doing,' and I said, ‘OK, that's what I needed to hear,'" Samulski said.
The acquisition allows the company to spend more time on science and less on raising money, he added.
"If I go back and write a grant today, it'll be three years before we can start the project," Samulski said. "In this setting, when we have our meeting ... the decision-makers are at the table and the science starts that afternoon."
The next chapter
For High, AskBio represents a return to a similar role as the one she had left: helping run an advanced gene therapy business newly acquired by big pharma. At AskBio, she's been named president of therapeutics.
The role, however, lines up with High's current career ambitions. AskBio has the manufacturing capabilities, breadth of clinical-stage programs and financial backing to take on diseases like Parkinson's and congestive heart failure — the types of complex, common conditions gene therapy hasn't yet been proven in.
"There are great strengths in pharma, and there are great strengths in biotech, and the ideal situation is one that will let you employ the strengths of both types of organizations," she said.
High considered other options, such as working with a different and unproven drugmaking technology. But as someone who's spent much of her life living the story of gene therapy, she knows more than most the challenges of pioneering a new technology and convincing regulators of its worth.
Sometimes people "may underestimate the amount of time it takes to build all the tools that you need to enable regulators to say 'yes, this is safe,'" she said.
By sticking with gene therapy, much of the groundwork has been laid. She's just looking to take it a step further.
"I'm probably not going to work for another three decades," High said, with a laugh.