It's been a busy couple weeks for gene therapy. On May 24, U.S. regulators approved a remarkable gene therapy targeting the leading cause of gene-related death in infants, and yesterday, European regulators OK'd the first gene therapy for beta-thalassemia, a genetic disorder that can require a lifetime of blood transfusions. The approval of bluebird bio's (BLUE -4.91%) beta-thalassemia therapy, Zynteglo, could disrupt how patients are treated, so let's learn more about it. 

Why this is important

Beta-thalassemia is a potentially fatal disease characterized by an inability to produce beta-globin, a protein necessary for producing hemoglobin. Because hemoglobin delivers oxygen to red blood cells and beta-thalassemia patients aren't able to produce hemoglobin adequately, many patients receive regular red blood cell transfusions to prevent their red blood cells from dying. 

A rubber stamp with the word Approved.


Over time, red blood cell transfusions can result in a dangerous buildup of iron. Since people with beta-thalassemia absorb more iron in their intestines than others, they're at a greater risk of life-threatening complications, such as cirrhosis, diabetes, and heart disease. 

What it does

Zynteglo uses an inactivated viral vector to insert a functional human beta-globin gene into a patient's own hematopoietic stem cells (producing blood cells) outside of the body (ex-vivo). After their harvested stem cells are returned, patients can produce their own beta-globin, eliminating or significantly reducing the need to continue receiving blood transfusions.

In Bluebird's HGB-205 study, three out of four patients without the β0/β0 genotype of this disease achieved transfusion independence of at least 12 months after receiving one dose of Zynteglo. In the Northstar study, eight of 10 patients without the β0/β0 genotype achieved transfusion independence. As of the cutoff date for filing for EU approval, these patients remained transfusion-independent for 21 to 56 months post-treatment.

Initially, only transfusion-dependent Europeans who are 12 years or older without the β0/β0 genotype are eligible for Zynteglo, but trials could expand its use in the future.

What it costs

Management will provide insight into Zynteglo's list pricing next week, but its net price is likely to vary from country to country. Although we won't know the retail cost of Zynteglo for a few more days, Bluebird has previously said its price won't exceed its intrinsic value of $2.1 million, which was determined by analyzing Zynteglo's ability to improve patient quality of life and life expectancy.

If Bluebird sticks to its word, then Zynteglo's cost will likely be similar to that of Novartis' (NVS 1.10%) Zolgensma, a one-and-done gene therapy for spinal muscular atrophy that won approval from the Food and Drug Administration last month. 

Zynteglo's multimillion-dollar price tag may sound high, but it could wind up saving healthcare systems millions of dollars over a patient's lifetime. It can cost between $300,000 to $500,000 per year to treat people with rare diseases such as this one, and that's without including the costs associated with complications.

Furthermore, Bluebird has said it plans to spread Zynteglo's cost over five years and that it may consider value-based payment arrangements that only require payment if the therapy is working. 

What's the commercial opportunity?

Beta-thalassemia isn't common, but the initial addressable patient population still totals in the thousands in Europe. The company hopes to make Zynteglo available in Germany this year; then, it plans to expand its access to the U.K. and Italy next year. There are about 2,300 eligible patients in those three countries alone.

Although the disorder is less common in the U.S., a potential approval here could add another 1,400 eligible patients as early as 2020. That's big enough to give Zynteglo a shot at billion-dollar blockbuster status, but an even larger opportunity may exist in sickle cell disease. There are over 100,000 people with sickle cell disease in the U.S. alone who could benefit from Zynteglo someday. Results from a trial evaluating Zynteglo in sickle cell disease could allow Bluebird to file for approval in that indication as soon as 2022.