Editor’s note: This story is part of a series on the trends that will shape the industry in 2021. You can find all the articles on our trendline.
Three years ago, the Food and Drug Administration granted a landmark approval to the first gene therapy for an inherited disease, clearing a blindness treatment called Luxturna.
Since then, the regulator has approved one more gene therapy, the spinal muscular atrophy treatment Zolgensma, and given a green light for dozens of biotech and pharmaceutical companies to start clinical testing on others. Genetic medicines for a range of diseases, including hemophilia, sickle cell and several muscular dystrophies, appear in reach, and new science is galvanizing research.
But, entering 2021, the gene therapy field faces major questions after a series of regulatory and clinical setbacks have shaded optimism. "The ups and downs of adolescence are on full display" analysts at Piper Sandler wrote in September, summing up the state of gene therapy research.
Here are five questions facing scientists, drugmakers and investors this year. How they're answered will matter greatly to the patients and families holding out hope for one-time disease treatments.
Are recent high-profile setbacks a warning sign?
The FDA was widely expected last year to approve a closely watched gene therapy for hemophilia A, the more common type of the blood disease. Instead, the agency in August surprisingly rejected the treatment, called Roctavian, and asked its developer, BioMarin Pharmaceutical, to gather more data.
The next day, Audentes Therapeutics reported news came a third clinical trial participant had died after receiving the biotech's experimental gene therapy for a rare neuromuscular disease. The tragedy brought flashbacks to past safety scares in gene therapy, although the current wave of treatments being tested have generally appeared safe.
A little less than five months later, the gene therapy field is grappling with two more setbacks. UniQure is exploring whether a study volunteer's liver cancer was caused by its gene therapy for hemophilia B. And Sarepta, one of the sector's top developers, faces significant doubts about its top treatment for Duchenne muscular dystrophy after disclosing a key study missed one of its main goals.
In each case, the drugmakers involved offered explanations and reasons for optimism. BioMarin still expects to obtain an approval; Audentes' trial is now cleared by the FDA to resume testing; UniQure thinks it's unlikely the cancer case is linked to treatment; and Sarepta argued its negative data were the product of unlucky study design.
But taken together, the developments are powerful reminders of both the stakes and uncertainty still facing gene therapy.
All four events also highlighted lingering worries about one-time genetic treatment. In rejecting Roctavian, for example, the FDA seemed to be concerned the impressive benefit hemophilia patients initially experienced may wane over time. The deaths in Audentes' study, meanwhile, renewed warnings about extremely high doses of gene therapy. Researchers have long watched for evidence that replacing or altering genes may cause cancer to develop in rare instances, particularly after four infants developed leukemia in a gene therapy study in the early 2000s. And Sarepta's negative findings were surprising because early signs of dramatic biological benefit that didn't seem to translate into clear-cut functional gains for all patients.
Experts are still confident gene therapy can deliver on its promise. Bu recent events suggest getting there may take a bit longer than some expected.
Has the FDA raised its bar?
"The process is the product," is an often-used cliche about gene therapy, which are complex treatments with exacting manufacturing standards.
Most of the roughly 60,000 pages in Spark Therapeutics' application for approval of Luxturna, for instance, involved what's known in the industry as "chemistry, manufacturing and controls."
The therapeutic basis for gene therapy, by contrast, is much clearer for many of the rare, monogenic diseases that developers are targeting. If mutations in a single gene lead to disease, replacing or otherwise fixing that gene should have a large benefit.
"Genetic medicine is not industrialized serendipity," said Gbola Amusa, an analyst at Chardan, contrasting gene therapy with chemical-based drugs. "It often is an engineering question."
In 2020, the FDA gave ample notice that it's watching gene (and cell) therapy manufacturing closely. Sarepta, Voyager Therapeutics, Iovance Biotherapeutics and Bluebird bio were all forced to revise their development timelines after the agency asked for new details about production processes.
"The FDA is saying to companies that you've got to up your standards," Amusa added.
For their part, FDA officials have indicated the spate of data requests are a product of the sharply higher numbers of companies advancing through clinical testing.
Are gene editing stocks overheated?
While setbacks have piled up for therapies that seek to replace genes, 2020 was a "transformative year" for therapies designed to edit them, according to Geulah Livshits, an analyst at Chardan.
CRISPR gene editing, already widely recognized as a scientific breakthrough, gained further prestige with the awarding of the Nobel Prize in Chemistry to two early pioneers, Jennifer Doudna and Emmanuelle Charpentier.
But the year also brought important progress from early biotech adopters. Editas Medicine and Intellia Therapeutics, for example, notched CRISPR firsts with use of the editing technology inside the human body.
And CRISPR Therapeutics and partner Vertex showed their experimental therapy, which uses CRISPR to edit stem cells, worked exceptionally well in the first 10 patients with either sickle cell disease or beta thalassemia treated in two early studies.
The data are the most concrete sign yet that CRISPR's clinical use can live up to its laboratory promise. While all three companies' therapies are still in early stages, their advances have ginned up substantial investor enthusiasm.
Together, the market value of CRISPR Therapeutics, Editas and Intellia totals nearly $25 billion. Beam Therapeutics, a startup that uses a more precise form of gene editing, is worth nearly $6 billion.
"Gene therapy will have a big role to play," said John Evans, Beam's CEO. "But I do think in the last year or so there's a growing realization that, when possible, you'd probably rather edit than add an extra gene."
Clinical tests will prove that out but, until then, the large upswing in share price for gene editing companies may not be sustainable as valuations creep higher and higher. Some of the recent run-up, for instance, appears driven by money flowing from generalist investors through exchange-trade funds, rather than from investors experienced in handicapping preclinical- or early clinical-stage companies.
"They're overdue for some type of rationalization," predicted Brad Loncar, CEO of Loncar Investments, adding that many companies are targeting similar diseases, most commonly sickle cell and beta thalassemia.
Can a wave of new startups develop better tools?
Tasked with replacing faulty genes with functional ones, scientists for the most part have turned to two types of viruses to safely shuttle genetic instructions into cells. Adeno-associated viruses, or AAVs, are typically used for infused treatments, while researchers working on cells extracted from patients generally opt for lentiviruses.
Each virus class has advantages, but also notable drawbacks. AAVs, for instance, can trigger pre-existing immune defenses in some people, making those individuals ineligible or poor candidates for gene therapy. Lentiviruses, by contrast, are known to integrate their DNA directly into the genomes of cells they infect — a useful attribute in some regards but limiting in others.
Over decades of gene therapy research, scientists have found ways to tweak and modify these viral vectors to better suit their needs, but the basic tools are the same. Jim Wilson, a gene therapy pioneer who ran the study that led to the death of teenager Jesse Gelsinger in 1999, told attendees at a STAT conference last fall that he's "somewhat disappointed" by slow progress in viral vector research.
And as more and more gene therapies enter clinical testing, the limitations of current viral vectors have become more apparent.
The pace of research might be picking up, however. Recently, a number of companies aiming to build better delivery tools have launched, including Harvard University spinout Dyno Therapeutics and 4D Molecular Therapeutics, which recently raised $222 million in an initial public offering.
Larger companies are interested, too. Roche, Sarepta and Novartis have all partnered with Dyno, for example.
In gene editing, meanwhile, researchers are developing new ways to cut DNA, while Beam and others are advancing different editing approaches altogether.
Will large drugmaker bets bear fruit?
Billions of dollars have flowed from pharmaceutical companies into gene therapy over the past few years, leaving few large multinational drugmakers without a research presence.
2020 was no different, with sizable acquisitions inked by Bayer and Eli Lilly, as well as an array of smaller investments from Pfizer, Novartis, Johnson & Johnson, Biogen, and UCB. And CSL Behring, best known for its blood plasma products, spent nearly half a billion dollars to buy UniQure's most advanced gene therapy, a treatment for hemophilia B.
Over the past three years, there's been at least $30 billion spent on biotechs involved in gene or cell therapy. (Four deals account for the majority of that value.)
All of that dealmaking, while following promising and compelling science, is ultimately a bet that one-time genetic treatments can be scaled up and commercialized into a lucrative business.
Many of the acquired companies are working on therapies for very rare disorders affecting hundreds or thousands of people. A handful, however, are taking aim at more prevalent conditions, starting with still relatively uncommon diseases like hemophilia to ones affecting millions of people like Parkinson's.
"For gene therapy to meet our lofty expectations — not just for investors, but for society — it has to make the leap from these ultra-rare diseases," said Loncar.
Commercially, the track record for the few therapies on the market in the U.S. is mixed. Luxturna, now owned by Roche, is a niche product. Zolgensma has broader use and earned Novartis about $1 billion in the year and a half it's been commercially available.
Two cell therapies from Novartis and Gilead, meanwhile, have struggled to gain traction.
Gene therapy's biggest commercial test yet was supposed to come this year, with the expected approval of BioMarin's Roctavian in hemophilia A. The FDA's surprise rejection could mean a yearslong delay in the U.S., but the challenges of pricing, reimbursement and patient access in gene therapy remain dauntingly large.