On Oct. 31, Vertex Pharmaceuticals (VRTX -0.06%) and its collaborator CRISPR Therapeutics (CRSP 0.34%) met with regulators at the Food and Drug Administration (FDA) in a high-stakes meeting about commercializing the pair's gene therapy for sickle cell disease (SCD), exa-cel. The jury hasn't convened yet on the topic of approving exa-cel for sale with a binding ruling, which is scheduled for later this year. But the conference was a critical opportunity for the two companies to talk with decision-makers about any concerns they might have about the already-submitted collection of clinical data and manufacturing methods.
Let's unpack the consequences of the meeting and take a moment to understand the issues regulators were interested in discussing, as they're likely to make a big difference for shareholders over the coming quarters.
What's at stake
Exa-cel is a key program for both Vertex and CRISPR Therapeutics. It aims to treat or functionally cure sickle cell disease, an inherited blood disorder; SCD causes red blood cells to harden and warp into a crescent-moon shape, which is suboptimal for their functioning.
The therapy calls for removing a patient's hematopoietic stem and progenitor cells (HSPCs), correcting the dysfunctional genes contained in those cells with sophisticated editing techniques, and then reinfusing the surviving newly engineered cells back into the patient. You can think of HSPCs as stem cells that can become red blood cells.
Soon enough, if things go as intended, the engineered cells then return to their homes in the patient's bone marrow and begin to multiply. But unlike before the editing, when the newly engineered cells multiply and differentiate themselves, they create functional red blood cells instead of sickled cells. This significantly alleviates the symptoms of the disease, or eliminates them permanently.
Exa-cel could become CRISPR Therapeutics' first medicine on the market, which is a huge barrier to cross for a young biotech stock. For Vertex, the approval of exa-cel would represent a new driver of its revenue. More importantly, an approval would also mean success for Vertex's long-standing plan to diversify its base of revenue -- sales of its therapies for cystic fibrosis (CF) have accounted for 100% of its income thus far.
According to the meeting agenda, an advisory committee staffed by clinicians and scientists reviewed the materials the two companies submitted as part of their regulatory package. Next, they will refer any concerning findings to the regulators who will be ultimately responsible for giving exa-cel the green light or not. Based on comments made by regulators, the primary issue is the reliability and precision of the gene-editing portion of exa-cel's manufacturing process.
It makes sense that they're concerned. If a patient's cells are edited improperly, it could create additional risks upon implantation. At best, the therapy simply won't work. Other effects from accidental off-target editing, that is, making inadvertent changes to un-targeted genomic sites, could be more sinister. AAnd while it's hard to even conceptualize what a worst-case scenario for patients would look like, regulators wouldn't want to find themselves eventually at the short end of the stick by hastily dishing out approvals for the treatment. That means it behooves the drugmakers to have plenty of in-process quality controls to analyze the efficiency and accuracy of the gene editing, well before the edited cells are returned to patients.
In particular, regulators took issue with Vertex's use of software simulations rather than diagnostic experiments to determine whether its gene-editing approach makes unintended edits to patient cells. If that becomes a sticking point, it's possible that Vertex would need to perform additional analyses to confirm that there aren't any instances of off-target editing going on in 100% of the doses of exa-cel administered. But proving a negative -- that there aren't any cells with unintended edits in any exa-cel doses -- may be technically difficult or outright impossible.
To complicate matters further, the chair of the regulators at the meeting admitted that there are presently no official guidelines for tolerable levels of editing efficiency or accuracy. So investors should likely expect the dialogue between the companies and regulators to continue, even if there's nothing wrong.
What's next?
The FDA will issue its final verdict on the approval of exa-cel on Dec. 8. Ongoing conversations with regulators might require Vertex Pharmaceuticals and CRISPR Therapeutics to do some more diagnostic lab work or clinical data analysis before that.
Thankfully for investors, the decision makers don't seem to be concerned about the efficacy of exa-cel for SCD. Nor did they express concerns about the safety of the therapy in the context of the infusion process, or its intended impact.
In other words, exa-cel is now one step closer to approval, and the powers that be are signaling that a positive outcome is likely, so long as a few minor points are addressed. Stay tuned for more details after Vertex's third-quarter earnings call on Nov. 6; management may provide some additional insight and provide more clues about what's next.
