Does the ability to change the landscape of disease and treatment represent a valuable investment opportunity?
This question is currently exercising the investment community. With the upturn in gene-based therapeutics reaching the market and the clinic, the levels of anticipation for truly meaningful breakthroughs in curing diseases are rising. Is that promise attracting investors to the sector?
The qualified successes in commercialisation alongside the many gene-based therapies in the clinic or already awaiting regulatory approval, has seen an upsurge in investment in the companies active in this still relatively new area of therapeutics. The first genetic-based oligotherapeutic gained FDA approval in 1998. However, 17 years later and there were still only 3 therapies available to the market and patients, all focused on relatively rare diseases. The dissemination and use of oligos to moderate gene expression saw significant growth in the mid-2010s to now, with 22 chemical entities now in clinical usage.
Commentators observe that the FDA is recognising a high unmet need and has been far less tentative in their approach to gene therapies.[1] The recently fully approved (June 2023) therapy Roctavian, had a wobble in mid-2021 with parent company BioMarin revising expectations for FDA approval.[2] This notable shift in the regulatory burden has come from the FDA, which is now actively supporting gene therapies with new approval initiatives.[3] Gene modulating therapies will offer major improvements in treatment for patients with rare, genetic diseases with their wider application towards more common maladies in the future. These factors are significant in driving the market and investment interest upwards.
Gene-based therapies and the outcomes they deliver are often transformative, even lifesaving. There were no treatment options previously for many of those patients. There are also diseases where the cost of ongoing care is very high, and this is a key point in the potential progress of this market. It is however notable that costs of development are still high, and those are placed onto the prices per dose of approved, clinically active drugs (Table 1).
These costs are substantial but can represent an overall saving from heavy ongoing care burdens which they remove. This has been validated by the market uptake of these therapies with stakeholders overcoming this ‘sticker price’ and utilising these drugs for the right patient. Novartis’ Zolgensma, one of the only options for the treatment of spinal muscular atrophy, has pulled in $1.37 billion in sales with annual growth of 5%.
Research analysts have reported that the market as a whole could be worth in excess of $80 billion by early next decade as a result of prices, accelerated approvals and many more new treatments in the market as a result. With the increasing number of gene therapies hitting the market, this segment of the biotech industry must be approaching an inflection point and a related spurt in value growth.
One impediment to this progress is the technology that is available to effectively deliver the new wave therapeutics to their site of action.
Nature in its 4 January 2022 edition, highlighted the crucial link between the therapeutics and their delivery in its review ‘Drug delivery systems for RNA therapeutics’.[4]
The article makes clear the imperative of effective delivery from its outset: ‘the ability to manipulate these (gene-targets) targets, especially non-coding DNA and the 85% of the genome that might be undruggable using small molecules, is lessened without the capacity to deliver therapeutic RNA to diseased cells’.
The review then considers the relative merits of polymer-based, lipid-based, and conjugate-based drug delivery systems as they combat the hurdles that act against effective delivery: ‘Irrespective of their therapeutic mechanism of action, the large size of some therapeutic RNAs, such as mRNAs, their anionic charge, and their susceptibility to RNases present in both the bloodstream and tissues make it difficult for therapeutic RNA to enter cells efficiently and function on its own.’
Also, in January 2022 Polaris Market Research published its forecast for the market of the delivery enabling technologies. Driven by the emergence of new gene-therapeutics the market for delivery technologies is forecast to jump from $2.6 billion in 2022 to approaching $8 billion by 2028 at a CAGR of 15%. This exceptional growth will certainly be driven by the throughput of new therapeutics but augmented by the expressed need for new options for delivery.
At TargoPep we have heard the expressions of need from our industry contacts who are looking beyond the current options of viral vectors, lipid nanoparticles and conjugation. Our aim is to apply the inherent variability and flexibility of our platform with agile development techniques to provide an optimal delivery vehicle for the gene therapeutic in focus.
The combination of the forecast upsurge in gene-therapies in the clinic and approaching the market thanks to expedited review, and the commitment of the delivery technology companies to design and deliver new solutions are strong arguments in favour of the assertion that this is the time to invest in the full breadth of the companies active in this space.
[1] Gatlin, A. Have Million-Dollar Gene Therapies Finally Reached An Inflection Point?, Investor’s Business Daily, Sept 2023.
[2] Johnston, L. A. FDA blocks much-anticipated BioMarin hemophilia gene therapy, Associated Press, Aug 2020.
[3] Lu, C., Abbott, C. K. FDA Takes First Step Toward International Regulation of Gene Therapies to Treat Rare Diseases, Greenberg Traurig, Jan 2024.
[4] Paunovska, K., Loughrey, D., Dahlman, J. E., Nat. Rev. Gen. 2022, 23, 265-280.
Ken Fyvie, May 2024
