At last week's American Society of Hemophilia conference, Spark Therapeutics (NASDAQ:ONCE) and BioMarin (NASDAQ:BMRN) presented promising data for gene therapy drugs that could change the way hemophilia is treated, making patients' lives significantly easier and safer.
In this clip from Industry Focus: Healthcare, analysts explain how the drugs work and why they're so exciting, how the gene therapy differs from the current standard of care, the difference between Spark's SPD-8011 and BioMarin's BMN 270, which company investors might want to take a closer look at, why Spark's share price fell after the company reported encouraging data at the conference, and more.
A full transcript follows the video.
This video was recorded on Dec. 13, 2017.
Kristine Harjes: For our last ASH update for the day, we're moving away from blood cancer and toward hemophilia. We want to talk about, as you phrased it, Todd, the showdown between two different companies -- Spark Therapeutics, their ticker is ONCE, and BioMarin, their ticker is BMRN. First off, I want to explain the ticker for Spark Therapeutics, because when this clicked in my mind, I was like, oh, that's pretty cool!
Todd Campbell: [laughs] It's great, right? Brilliant marketing.
Harjes: Yeah. Their ticker is ONCE, and that, I presume, is because gene therapy, which is what they work on, only needs to happen once and the patient is cured for life. So, if you're thinking about something like hemophilia, a typical hemophilia patient will need to regularly get treatment their entire life, which is very expensive. But if you can treat the underlying cause of it at the genetic level, that happens just once. Pretty cool.
Campbell: It's potentially game-changing, what gene therapy may do for hemophilia patients. It's exciting news for patients, it's exciting news for caregivers, it's exciting news for investors. It really is a shift in paradigm and how we approach treatment of this disease. Just to give listeners a little bit of background, we have two types of hemophilia, hemophilia A and hemophilia B. Hemophilia A is much more common, affects about 150,000 people worldwide. B is less common, but still common enough -- 30,000 or so patients globally. Companies are developing gene therapies that can eliminate, based on trials so far, the likelihood of bleeds in these patients. And that's just amazing. In hemophilia A and B, patients can have spontaneous bleeds if they cut themselves. Their blood does not contain the coagulant clotting factor that's necessary to clot their blood. So, there are so many consequences to that which negatively impact their quality of life. If you have a surgery, you have to make sure that you do all sorts of prep work ahead of time. If you hurt yourself, cut yourself, you have to take that into consideration, too. There's also joint damage that occurs over time because of the spontaneous bleeds. So, like you mentioned, you have current treatment that's prophylactic, and you're receiving infusions of the missing clotting factor. And what these gene therapies aim to do is, using those viral vectors we talked about earlier, introduce a functional gene that can produce the missing factors for these patients in a one-and-done injection. And that could be quite remarkable.
Harjes: Yeah. When you're measuring the outcomes of these drugs, you have two things that you're looking at. First of all, you have the number of bleeding events per year. And that's really what matters most -- can we keep these patients out of the hospital for their bleeding events, can we improve their quality of life, everything that goes along with that. But then, you also have what's an intermediary endpoint, which is, is there an increase in this coagulant factor, the one that is defective or missing, deficient, in any way? The drug is supposed to work by making more of this coagulant factor, so it makes sense that you would measure it. But really, what matters more is the bleeding events. At ASH, Spark Therapeutics released data about their drug SPK-8011, which is in hemophilia A, and there was a huge sell-off. Not because it couldn't control bleeding, it did -- there was a 100% reduction in bleeding events -- but because of concern over the factor VIII production, which is the clotting factor that this drug is supposed to increase.
Campbell: Yeah. You have the activity of SPK-8011, it ranged very widely, from 9% up to 37%, depending on where you were looking at it --
Harjes: Meaning 30% of those normal levels.
Campbell: Right. In a normal person, that's usually defined as 50% activity to 150%. It's kind of bizarre. Think of it this way: Most clinicians, if your activity is at 12% or higher, they're going to view you as not high-risk for bleeds. The people who are enrolling in these trials conducted by BioMarin and Spark, they have less than 1% activity. So, in BioMarin's case, you had activity levels jump to 49%. So, everybody looks at that and says, BioMarin's drug -- which I'm not even going to bother trying to pronounce, it's just ridiculous how many letters are in this [valoctocogene roxaparvovec].
Harjes: You can go with the earlier clinical name, which is BMN 270.
Campbell: OK, perfect. We're going to go with BMN 270. That did eliminate bleeds, just like Spark's 8011. But the activity jumped to 49%. So, think about that. You have 49%, which is just below that 50% cutoff for what's considered normal. We already know that 12% means you're probably not at significant risk for bleeds. Well, 8011, being between 9% and 37%, that just raised question marks for people. They looked at it and said, yeah, it eliminated the bleeds, but is BMN 270 more robust? Is it the better drug? I think it's too early to say that. And the reason that I make that claim is, BioMarin is in the lead, their study has been going on, it's enrolled more patients, they're more advanced in developing their hemophilia A gene therapy than Spark is. Spark is still optimizing the dosing of its drug. And it believes that through that optimization, until the next data readout, they're going to be able to boost those activity levels. From a clinical standpoint, most clinicians aren't going to really care, because all they ultimately care about are the bleeding rates falling. So, I think this was investors digging into the data trying to figure out, is one drug better than another better than another. I think it's too early to say. As a result, my personal view is that the reaction in Spark Therapeutics' shares, which tumbled over 30% after the ASH presentation, was an overreaction, and maybe even creates a buying opportunity. The real winner, no matter what, though, Kristine, I'm sure you'll agree, is patients, because both these gene therapies show that we're getting much closer to a one-and-done treatment of this condition.
Harjes: It works. It's really incredible. I love what Spark is doing. This isn't their only drug, which also makes me very surprised, but they lost a third of their market cap just about this one small detail of one of their drugs. They're also, for example, working in hemophilia B with Pfizer (NYSE:PFE) on another drug that also had very promising results from their phase 1/2 trials with highly controlled bleeding, again. They're also working outside of hemophilia. They have a drug called Luxturna, which is for blindness, a cure for a genetically defined set of patients who are blind, and that's expecting approval by Jan. 12. Meanwhile, the advisory committee to the FDA unanimously recommended approval of that drug. So, I would be downright shocked if it didn't get approval. This is a drug that restored vision in 90% of patients for up to three years in trials, whereas previously there were no currently approved drugs for this treatment. So, I really do think that what they're doing is absolutely incredible. And with that 33% sell-off, I'm personally very interested in the stock.
Campbell: I think it's fascinating. I think you make a very good point about Luxturna. It's not a very common thing, but you could treat 1,000 patients, and people are saying this could be a $1 million one-and-done drug therapy. So, even if you take net pricing and you think, maybe not everybody gets treated with it, you're still talking hundreds of millions of potential dollars in revenue for Spark Therapeutics on approval, and it can then use that money to help fund other programs, like the program in hemophilia. Hemophilia B is really intriguing to me, as well, because BioMarin is not working on hemophilia B right now. You have to worry about uniQure instead, which is another company developing a hemophilia B gene therapy. But I think Spark's relationship with Pfizer gives it an edge in that indication as well. I'm very intrigued by this stock as well, especially given the drop.
Harjes: Yeah. I think the point about Pfizer giving it its blessing is also very promising. We've said this before on the show, but that's a nice sign of faith, that a larger company is looking at a smaller company's pipeline and saying, yeah, I want a piece of that, what you're doing looks really promising.
Campbell: Kristine, don't forget, Pfizer markets BeneFix, which is one of the leading hemophilia B drugs right now. So, it already has the sales team in place.
Harjes: Exactly, it already has those relationships, it knows what it's doing, and its team understands the science. So, they are the best people equipped to look at a company that has a pipeline in the space and give it the thumbs-up.