Sickle cell anemia is a genetic disorder that reduces the capacity of red blood cells to deliver oxygen to organs across the body. The disease is estimated to affect more than 100,000 Americans total and has a market worth billions globally. Up to 31% of patients with the condition may develop episodes of vaso-occlusive crisis (VOC), which is a life-threatening condition caused by the accumulation of deformed, or sickle-shaped, red blood cells that block major blood vessels.
For over 60 years, the number of treatment options available were either limited or posed severe risk to patients. For starters, sickle cell patients could receive blood transfusions, but such procedures require regular visits to the clinic and take up to four hours. Next, while bone marrow transfusions can cure the disease, the wait-line can be excruciatingly long and success depends on finding a match. Finally, although patients developing VOCs can take a generic drug known as hydroxyurea to reduce their frequencies, the drug is a carcinogen (substance causing cancer) and can lead to leukemia.
But last year, the Food and Drug Administration approved two innovative therapies for the treatment of sickle cell disease. In addition, there is significant progress in using gene therapy to treat the condition. Without further ado, let's see if the companies behind these new treatments are worth the buck.
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A mid-cap specialist
To combat sickle cell disease, Global Blood Therapeutics (GBT) is deploying its recently approved Oxbryta (voxelotor). The drug functions by inhibiting the formation of fibers which lead to the sickling of red blood cells. In its clinical trials, the majority of patients who took Oxbryta for at least 24 weeks saw their baseline hemoglobin levels increase from between 8.3 g/dL to 8.6 g/dL to between 8.9 g/dL to 9.8 g/dL, respetively. This represents a small improvement, considering baseline hemoglobin levels in healthy adults range from 12 g/dL to 18 g/dL.
More importantly, Oxbryta failed to reduce the occurrences of VOC in patients. Hence, while the drug tackles the root problems of sickle cell disease (improving capacity of red blood cells to deliver oxygen), whether or not this can actually translate to an actual clinical benefit for patients remains to be seen. In the first two months of commercialization, Oxbryta generated $2.1 million in net sales. Meanwhile in 2019, the company spent over $100 million in sales and marketing, and its market cap is more than $4 billion.
A pharma stalwart
Also in November 2019, Novartis (NVS 0.80%) began marketing Adakveo to treat sickle cell disease. The drug is an intravenous infusion and functions by binding to a key protein in sickle red cells and blocks its ability to recruit other blood cells to constrict blood flow. In clinical trials, patients who took the drug saw the number of VOCs reduce by up to 45%.
While a small number of patients reported serious reactions to the injection, this pales in comparison to the risks of the current standard of care, hydroxyurea, as Adakveo has not shown links to cancer. Hence, Adakveo may become the new first-line treatment for VOCs, and generate sizable revenue growth for a company bringing in over $40 billion in sales, but has been declining since 2014.
Working in tandem
CRISPR Therapeutics (CRSP 1.11%) and Vertex Pharmaceuticals (VRTX 1.43%) are conducting phase 1/2 clinical trials to investigate CTX001 as a potential gene therapy to treat sickle cell disease. This treatment is theorized to function via modifying the deficient HBB gene in sickle cell patients which instructs on the formation of hemoglobin. In a press release, one patient treated with CTX001 over four months was completely cured of VOC, and had hemoglobin levels resembling that of normal adults.
While these results are exciting, keep in mind the therapy is still in early stages of its investigation, and results from later trials may reverse what is featured in this release. In the meantime, investors may wish to evaluate other pipeline candidates from CRISPR Therapeutics and Vertex.
What is the best pick?
Out of the three, Novartis is best posed to capitalize from developing sickle cell treatments. This is because the company's drug shows outstanding efficacy with no cancerous side effects and has plenty of other candidates in its pipeline to uphold the share price should marketing efforts go sour.
For Global Blood, I'd wait a few quarters to see if physicians are convinced of the drug's benefit and see where sales of Oxbryta pick up as to justify the company's valuation. As for Vertex and CRISPR, there are many other reasons to buy these biotech stocks, but it's best to sit on the sidelines until CTX001 moves on to later phases of its investigation, if betting on this particular therapy were your sole reason for buying shares.
