There are so many companies trying doing something with gene therapy right now that trying to keep track of them all is a full-time job. If you're short on time but you still want to know which way the wind's about to blow for the overall gene therapy space, here's some good news: You can narrow your focus to two potential blockbusters.
We'll probably see new drug approvals for Zolgensma from Novartis (NYSE:NVS) and Lentiglobin from bluebird bio (NASDAQ:BLUE) before the end of the year, and both drugs are expected to generate more than $1 billion annually within several years. Unfortunately, the gene therapy space has a pretty lousy track record when it comes to big expectations.
Can either of these players buck the trend? Here's what you need to know about the challenges ahead.
1. Zolgensma: Big expectations
Last year, Novartis bought AveXis for $8.7 billion to get its hands on Zolgensma, an experimental gene therapy formerly known as AVXS-101. The Swiss pharmaceutical giant was attracted to stellar results this treatment produced for infants born with a progressive neuromuscular disorder called spinal muscular atrophy (SMA).
Around 90% of children born with type 1 SMA don't reach their second birthday without the help of a ventilator, because they've lost the strength to breathe. Zolgensma is a one-time infusion that places a functional copy of the mutated gene SMA patients inherit, which appears to work better than anyone imagined.
All 15 patients treated with Zolgensma were alive and breathing on their own 24 months after just one infusion. Children born with SMA type 1 almost never develop the ability to sit up on their own, but 11 out of 12 who received the proposed dosage going forward could sit unassisted for more than five seconds.
With such a strong benefit, Clarivate Analytics thinks annual Zolgensma sales could reach $1.47 billion in 2021 and $2.09 billion in 2023. Reaching such heights would probably inspire pharma giants to reach for more midsized acquisitions of gene therapy start-ups.
2. Zynteglo: Positive opinion
Until recently, this experimental therapy has been known as LentiGlobin because it uses a lentivirus to insert functional hemoglobin genes into stem cells that produce new blood cells. This treatment could be used for patients with transfusion-dependent thalassemia (TDT) and sickle cell disease (SCD). Both of these conditions are caused by dysfunctional genes for hemoglobin, the protein in red blood cells that carries oxygen to tissues that need it.
Recently, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency recommended conditional approval of Zynteglo for TDT patients who can't find a matched stem cell donor. If the European Commission follows CHMP's opinion, as it usually does, this will be the first available treatment for TDT besides frequent blood transfusions, which are painful, inconvenient, and expensive.
If approved in the EU in the first half of 2019, and the U.S. in 2021, annual Zynteglo sales could reach $1.12 billion in 2023. Partly because it looked extremely effective in the Northstar-2 study, where 10 out of 11 treated patients had stopped receiving blood transfusions and had hemoglobin levels up near the normal range after three months.
Around 60,000 people inherit some form of beta-thalassemia, and a large portion of this population could be eligible for treatment with Zynteglo. That's probably enough to drive blockbuster sales on its own, and approval for SCD down the line could push this gene therapy even further.
In the U.S. alone, there are about 100,000 people living with SCD, and perhaps a million worldwide that could use a treatment option. Misformed hemoglobin causes red blood cells to flatten out in a way that isn't helpful. Sickle-shaped blood cells get stuck in blood vessels, effectively strangling the organs they service and causing a great deal of pain along the way.
How much is this going to cost?
In theory, these treatments can save insurers and the governments that end up paying for them heaps of money. There's only one other SMA treatment available, Spinraza from Biogen (NASDAQ:BIIB) and it costs $750,000 for the first year, then $375,000 each subsequent year for life. With this in mind, the Institute for Clinical and Economic Review thinks Novartis could charge $2 million for Zolgensma, and it would still cost less than Spinraza treatment over the course of a patient's lifetime.
Blood transfusions for the treatment of beta-thalassemia aren't cheap, either. Bluebird thinks Zynteglo can save payers around $2.1 million. Bluebird and Novartis will probably launch their drugs with list prices around $1 million and a pay-as-you-go model that breaks the cost into a series of annual payments. Since those payments end as soon as patients need to rely on different treatments again, there's a lot less risk.
Long-term installment plans seem like an easy solution for the pricing problem that single-administration cures present, but nothing changes as quickly as it should in healthcare. So far, drug launches for expensive single-administration treatments haven't lived up to expectations. Zynteglo and Zolgensma have a better chance than buck the trend than any before them. If bluebird and Novartis can't convince end payers their therapies are worth enormous sums, though, the entire gene therapy stock universe could implode.