Nearly 1.8 million Americans were diagnosed with cancer last year. Around the world, the total was close to 17 million. It's not surprising, then, that more than 700 biopharmaceutical companies have experimental cancer drugs in late-stage development.
Beta-thalassemia, on the other hand, is a rare disease that affects around 1,000 or so people in the United States. It's more prevalent in some countries but still impacts only one in 100,000 individuals.
You might expect one or maybe two biotechs could be developing therapies to treat beta-thalassemia. However, by my count, at least half a dozen companies have programs targeting the blood disorder. Why are a disproportionate number of biotechs scrambling to develop drugs for the same rare disease?
Probably the main reason why a relatively large group of drugmakers are targeting beta-thalassemia is that the cause of the disease is straightforward. Understanding the why behind a disease is a critical prerequisite to treating it.
Beta-thalassemia is usually caused by a mutation in the HBB gene, which provides instructions on how to build beta-globin proteins. These proteins are part of hemoglobin, the protein in red blood cells that carries oxygen throughout the body. The HBB mutations that cause beta-thalassemia result in dysfunctional red blood cells that can't carry enough oxygen, which leads to patients experiencing anemia.
Another potential reason why biotechs are attracted to beta-thalassemia, though, is that it's not the only disease that is caused by mutations in the HBB gene. Sickle cell disease (SCD) is a related disease where HBB mutations cause red blood cells to form a sickle (or crescent) shape. These misshaped red blood cells can get stuck in blood vessels and cause multiple health complications, including anemia, infections, frequent pain, and heart problems.
While beta-thalassemia is rare, SCD is the most common genetic blood disorder in the U.S. It affects up to 100,000 Americans. SCD is even more prevalent in Africa, impacting up to 3% of newborns in some parts of the continent.
Drugmakers that identify a way to treat beta-thalassemia can be on the right track to target sickle cell disease as well. And with a much larger patient population, the market potential for successful therapies is greater.
Who's in the race
One product has already been approved by the FDA for treating beta-thalassemia. Acceleron Pharma (NASDAQ:XLRN) developed luspatercept in collaboration with Celgene. In November 2019, Celgene won FDA approval for luspatercept in treating transfusion-dependent beta-thalassemia. Bristol-Myers Squibb (NYSE:BMY) closed its acquisition of Celgene a few weeks later and is marketing the drug under the brand name Reblozyl. Luspatercept is also in a mid-stage clinical study for treating non-transfusion-dependent beta-thalassemia.
Bluebird bio (NASDAQ:BLUE) won European approval for Lentiglobin in June 2019 for treating transfusion-dependent beta-thalassemia. Lentiglobin is a gene therapy that transplants cells with healthy HBB genes into patients. The biotech launched the therapy in Germany in January with the brand name Zynteglo. Bluebird plans to roll out Zynteglo in other key European markets later this year and should file for U.S. approval within the next few months.
Several biotechs are developing gene-editing approaches to treat beta-thalassemia. The company with the most advanced gene-editing program is Sangamo Therapeutics (NASDAQ:SGMO). However, there are some worries about ST-400, the experimental gene therapy that Sangamo is developing with Sanofi. In December 2019, Sangamo announced preliminary results from an early stage clinical study that, while showing promise, raised safety concerns.
CRISPR Therapeutics (NASDAQ:CRSP) and its big partner, Vertex Pharmaceuticals (NASDAQ:VRTX), are evaluating CTX001 in early stage clinical studies for treating beta-thalassemia and SCD. CTX-001 uses CRISPR gene editing, a different method than the zinc-finger nuclease (ZFN) gene-editing approach that Sangamo uses. CRISPR Therapeutics and Vertex reported promising preliminary results in December 2019 from both of its clinical studies.
Editas Medicine (NASDAQ:EDIT) is also using CRISPR gene editing to target both beta-thalassemia and SCD. The biotech hasn't advanced its experimental therapy to a clinical study in humans yet but plans to file for FDA approval later in 2020 to begin clinical testing. Editas thinks that its gene-editing approach is superior to the ones being taken by CRISPR Therapeutics and Sangamo.
Trailing the pack is Syros Pharmaceuticals (NASDAQ:SYRS). In December, Syros and Global Blood Therapeutics signed a deal to work together to develop drugs targeting beta-thalassemia and SCD based on Syros' gene control platform. Instead of trying to directly edit the gene mutations, Syros' gene control therapies attempt to control the expression of genes through genomic switches in other parts of DNA. The biotech hasn't said how soon it will be able to advance to clinical testing with its experimental drug.
The investor's dilemma
There are a couple of big problems for investors with so many companies chasing after the same rare disease. First, it's impossible to know which experimental therapies will be successful. Second, if multiple drugs win regulatory approvals, the competition could be so fierce that no product is a huge moneymaker.
It's also important to know that several of the products being developed hold the potential to cure beta-thalassemia. These therapies could wipe out the opportunities for drugs that aren't curative.
One solution to this investor's dilemma is to avoid all of the biotech stocks that are focused on beta-thalassemia. However, that's like throwing the baby out with the bathwater. I think that a better alternative is to invest in the big drugmakers with beta-thalassemia programs.
Bristol-Myers Squibb already has one FDA approval under its belt for Reblozyl. BMS also owns 5.3% of CRISPR Therapeutics and is partnering with Editas on developing gene-editing therapies targeting cancer. Vertex is partnering with CRISPR Therapeutics and owns 10.2% of the small biotech. Both BMS and Vertex stand to win with their beta-thalassemia drugs but also have plenty of other growth drivers.