Could gene therapy become biotech’s growth driver in 2017?

Despite bouncing off a 2-year low, biotech is still an unpopular sector and investors are rightfully concerned about its near-term prospects. Recent drug failures, growing pricing pressure and the potential impact of biosimilars all contribute to the negative sentiment, but the main problem is the lack of growth drivers for the remainder of 2016 (and potentially 2017).

The biotech industry relies on innovation cycles to create new revenue sources. This was the case in the 2013-2014 biotech bull market, which was driven by a wave of medical breakthroughs (PD-1, HCV, CAR/TCR, oral MS drugs, CF etc.). These waves typically involve new therapeutic approaches coupled with disruptive technologies as their enablers.

In oncology, for example, the understanding that cancer is driven by aberrant signaling coupled with advances in medicinal chemistry and antibody engineering led to the development of kinase inhibitors and monoclonal antibodies as blockers of signaling. A decade later, insights around cancer immunology gave rise to the immuno-oncology field and PD-1 inhibitors in particular, which are expected to become the biggest oncology franchise ever.

Gene therapy ticks all the boxes

While there are several hot areas in biotech such as gene editing and microbiome, most are still early and their applicability is unclear. Gene therapy, on the other hand, is more mature and de-risked with tens of clinical studies and the potential to treat (and perhaps cure) a wide range of diseases where treatment is inadequate or non-existent. The commercial upside from these programs is huge and should expand as additional indications are pursued.

As I previously discussed, the past two years saw a surge in the number of clinical-stage gene therapies, some of which already generated impressive efficacy across multiple indications. This makes gene therapy the only truly “disruptive” field which is mature enough not only from a technology but also from a clinical standpoint. Importantly, most studies are conducted by companies according to industry and regulatory standards, in contrast to historical gene therapy studies that were run by academic groups.

To me, the striking thing about the results is the breadth of technologies, indications and modes of administrations evaluated to date. This versatility is very important for the future of gene therapy as it reduces overall development risk and increases likelihood of success by allowing companies to tailor the right product for each indication. Parameters include mode of administration (local vs. systemic vs. ex vivo), tropism for the target tissue (eye, bone marrow, liver etc.), immunogenicity and onset of activity.

Building a diversified gene therapy basket

Given the early development stage and large number of technologies, I prefer to own a basket of gene therapy stocks with a focus on the more clinically validated ones: Spark (ONCE), Bluebird (BLUE) and Avexis (AVXS).

Bluebird and Spark are the most further along (and also the largest based on market cap) gene therapy companies and should be the basis for any gene therapy portfolio. With two completely different technologies, the two companies have strong clinical proof-of-concept for their respective lead programs.

Avexis is less advanced without a clinically validated product, but recent data for its lead program are too promising to ignore.

Spark – Clinical validation for retinal and liver indications

Spark’s lead programs (SPK-RPE65) will probably become the first gene therapy to get FDA approval. In October, the company reported strong P3 data in rare genetic retinal conditions caused by RPE65 mutations, the first randomized and statistically significant data for a gene therapy. The company is expected to complete its BLA submission later in 2016 which should lead to FDA approval in 2017. Spark’s second ophthalmology program for choroideremia is in P1 with efficacy data expected later in 2016.

Earlier this month, Spark released an encouraging update for its Hemophilia B program, SPK-9001 (partnered with Pfizer [PFE]). A single administration of SPK-9001 led to a sustained and clinically meaningful production of Factor IX, a clotting factor which is dysfunctional in Hemophilia B patients.  All four treated patients experienced a clinically significant increase in Factor IX activity from <2% to 26%-41% (12% is predicted to be sufficient for minimizing incidence bleeding events). Due to the limited follow up (under 6 months), durability is still an open question.

Spark intends to advance its wholly-owned Hemophilia A program (SPK-8011) to the clinic later in 2016 with initial data expected in H1:2017. Results in the Hemophilia B should be viewed as a positive read-through but Hemophilia A still presents certain technical challenges (e.g. missing protein is several fold larger) which required Spark to use a different vector. Hemophilia A represents a $5B opportunity compared to $1B for Hemophilia B.


Despite being one of the worst biotech performers, Bluebird remains the largest and most visible gene therapy company.  In contrast to most gene therapy companies, Bluebird treats patients’ cells ex-vivo (outside of the body) in a process that resembles stem cell transplant or adoptive cell transfer (CAR, TCR). Progenitor cells are collected from the patient, a genetic modification is integrated into the genome followed by infusion of the cells that repopulate the bone marrow.  This enables Bluebird to go after hematologic diseases like beta thalassemia and Sickle-cell disease (SCD) where target cells are constantly dividing.

Sentiment around Bluebird’s lead program, Lenti-globin , plummeted last year after a series of disappointing results in a subset of beta-thal patients and preliminary data in SCD, which represents the more important commercial opportunity. Particularly in SCD patients, post-treatment hemoglobin levels were relatively low and although some increase has been noted with time, it is still unclear what the maximal effect would be. Market reaction was brutal, sending shares down 75% in just over a year.

Next update for Lenti-globin is expected at ASH in December.  Despite the disappointing efficacy observed in SCD and beta-thal, I am cautiously optimistic about Bluebird’s efforts to optimize treatment protocols and regimens. These include specific conditioning regimens and ex-vivo treatment of cells that may improve transduction rate and hemoglobin production in patients. Some of these modifications are already being implemented in newly recruited patients and hopefully longer follow up will lead to higher hemoglobin levels in already-reported patients.

The only clinical update so far in 2016 was for Lenti-D in C-ALD, a rare neurological disease that affects infants in their first years. Results demonstrated that of 17 patients treated to date (median follow-up of 16 months), all remain alive and free of major functional deterioration (defined as major functional disabilities, MFD). The primary endpoint, defined as no MFD at 2 years, was reached for 3/3 patients with sufficient follow-up and assuming the trend continues Bluebird may be in a position to file for approval in H2:2017.

Lenti-D’s  commercial opportunity is limited (200 patients diagnosed each year in developed countries) so investors understandably focus on  Lenti-globin, which is being developed for beta –thal (~20k patients in developed countries) and SCD (~160k patients).

Bluebird is expected to end 2016 with ~$650M in cash. Current market cap is $1.7B.


Avexis is developing AVXS-101 for Spinal muscular atrophy Type 1 (SMA1), a rapidly deteriorating and fatal neuro-muscular disease. SMA1 is characterized by rapid deterioration in motor and neuronal functions with 50% of patients experiencing death or permanent ventilation by their first anniversary. Most patients die from respiratory failure by the age of two. SMA Type 2 and Type 3 are also caused by SMN1 mutations and are characterized by a later onset and milder disease burden (but unmet need is still significant in these indications). The US prevalence of SMA is 10,000, 600 of which are SMA1.

In contrast to Bluebird and Spark, Avexis does not have conclusive proof it can lead to expression of the missing protein (SMN1)  in the target tissue nor does it have randomized clinical data but the results generated to date are simply too provocative to ignore.

At the most recent update, Avexis presented data for 15 patients who received AVXS-101 in their first months of life. 3 patients were treated with a low dose and 12 were treated with a high dose. Strikingly, none of the children experienced an event (defined as ventilation or death), including patients who reached 2 years of age. All 9 patients with sufficient follow up, reached the age of 13.6 months without an event in contrast to historical data that show an event-free survival of 25%. AVXS-101 also led to a dose dependent increase in motor function which had a quick onset especially at the higher dose.


As with any results from an open label study without a control arm, these data should be analyzed with caution, as they need to be corroborated by large controlled studies (expected to start next year). Still, the data point to an overwhelming benefit in a very aggressive disease.   One of the most exciting aspects of this program is the fact that it is given systemically via IV administration, which implies the treatment reaches the neurons in the CNS. Avexis plans to start a trial in SMA2 in H2:16 using intrathecal delivery (directly to the spinal canal). This decision is surprising given the results with IV administration in SMA1 and the fact that the “BBB immaturity” hypothesis in babies is not considered relevant anymore. (See this review)

AVXS-101’s main competitor is Biogen’s (BIIB) and Ionis’ (IONS) nusinersen, an antisense molecule that needs to be intrathecally injected 3-4 times a year. As both drugs generated encouraging clinical data in small non-randomized studies, it is hard to compare them, however, AVXS-101 has an obvious advantage of being a potentially one time IV injection. Nusinersen is in P3 with topline data expected in mid-2017.

AVXS-101 is based on an AAV9 vector developed by REGENXBIO (RGNX), which licensed the technology to Avexis. Beyond the 5%-10% in royalties REGENXBIO is eligible to receive, data for AVXS-101 bode well for the company’s proprietary programs in MPS-I and MPS-II, two other rare diseases with neurological involvement where BBB penetration is crucial. These programs are also based on REGENXBIO’s AAV9.

Beyond AVXS-101, REGENXBIO has an impressive partnered pipeline which includes collaborations with Voyager (VYGR), Dimension (DMTX) , Baxalta and Lysogene.

Portfolio updates – Immunogen, Marinus, Esperion

June was a rough month for three of my holdings. Immunogen (IMGN) had a disappointing data set at ASCO, Marinus (MRNS) reported a P3 failure in epilepsy and most recently, Esperion was dealt a regulatory blow from the FDA that may push development timelines by several years. I am selling Immunogen and Marinus due to the lack of near-term catalysts although long-term their respective drugs could still be valuable. I decided to keep Esperion as I still find ETC-1002 very attractive and hope that PCSK9’s CVOT data will soften FDA’s concerns about LDL-C reduction as an approvable endpoint.

Three additional companies with important binary readouts in the coming months are Array Biopharma (ARRY), SAGE (SAGE) and Aurinia (AUPH). Array will have P3 data for selumetinib (partnered with AstraZeneca) in KRAS+ NSCLC. SAGE will report data from a randomized P2 in PPD following a promising single-arm data set.  Aurinia will report results from the AURA study in lupus nephritis patients, where there is a strong rationale for using the company’s drug (voclosporin) but limited direct clinical validation.

Portfolio holdings – July 4, 2016

portfolio - 4-7-2016- after changes

biotech etfs - 4-7-2016

149 thoughts on “Could gene therapy become biotech’s growth driver in 2017?

  1. Hello … Back to the subject of your last posting. Any comments on the prospects for the new P1 study combining Tivozanib and Opdivo in RCC? The claim is that Tivo should perform better than other anti-VEGFs in combination therapy, due to lower overlapping toxicities. Chris


  2. Toby (ARQL) – Yes, expectations for the METIV study are low but I still think the stock will take a hit if the trial fails. Sorry, don’t know Medigene’s TCR technology well.

    Wildbiftek (EXEL) – I am cautiously optimistic on CELESTIAL based on the RCC data and the fact that both Nexavar and regorafenib (pan-VEGFR inhibitors) prolong survival in liver cancer. Beyond that, I wouldn’t read too much into delayed interim analyses, which can go both ways.

    Dan (HTBX) – Yes there is obviously room for complementary technologies to PD-1 but I am not sure this is the right approach.

    sherk (AUPH) – Still didn’t hear the webcast (just got back from vacation) but I will take the market reaction as a reliable indication. i.e. it doesn’t look good.

    Kenny (BMY) – Don’t have a strong opinion there, not covering big pharmas.

    mcbio316 (RGNX) – In their 10K they disclose royalty rate of mid-single to low-double digit. What I am still trying to understand is whether royalties are due after the original AAV9 patent expire.

    OCUL – Sorry, don’t know them well.
    ARQL – Yes they should have more data this year for both FGFR and AKT in cancer and Proteus but the METIV readout is much more meaningful as a P3 data set.

    LIFE – Yes I still like the platform as a very high risk bet. always good to see insider buying.

    Dan G/Alex/ande (AUPH) – Still didn’t hear the webcast (just got back from vacation) but I will take the market reaction as a reliable indication. i.e. it doesn’t look good.

    Richard Baker (SNDX) – I was somewhat cautious on their P2 data, looks like they are using the immuno-oncology hype.

    Bouschka (TRIL) – I like CD47 as a target and recent activity with other companies certainly makes the area super hot but so far clinical data is very limited with Forty Seven’s mAb. TRIL’s approach of using Sirp-Fc could be differentiated safety-wise given its RBC sparing profile (still needs to be proven in humans)

    Chris (AVEO) – I still think tivo could be the best tolerated VEGFR inhibitor when added to PD-1 backbone. Still remains to be seen if combo is better than sequential treatment.

    Richard (KPTI) – I think I’ll sit this one out given the recent negative readouts in my portfolio and other biotechs.



  3. Ohad, can’t recall if I mentioned before but I’m long a small-cap Polish biotech called Selvita. Today they announced that the FDA accepted their IND for what they are calling the first dual PIM/FLT3 inhibitor for AML. Would be curious to hear your comments on this approach. This is their lead drug but they have a pipeline of novel drugs to follow (2nd targets CDK8 for cancer). Attached is their most recent presentation which details how they think their lead drug is differentiated from other AML drugs: .


  4. Ohad,

    Do you have any thoughts on PTLA and their Factor Xa inhibitor antidote? Just received a CRL, but I’m debating if this is a buying opportunity for something that is an un-met need that will eventually be approved.



  5. $LIFE I think they can get approval based on a P2 since there is no approved treatment in the disease area they are targeting. They have a P1/P2 on going at the moment, and it is a multi center trial with 20 patients and a placebo control arm. I am thinking that if they can prove that it works they get approval.


  6. On LIFE, I like that they are doing what seems to be completely novel work but the prior data didn’t seem all that convincing to me (particularly MRI). I’m willing to wait for some more definitive data even if that means “paying up.”


  7. Hey man
    Hope your vacation was good . I was just wondering what your thoughts were on AUPH after you’ve reviewed the latest releases



  8. $LIFE John Day, Director, Neuromuscular Division and Clinics, Stanford University name is on one of the clinical trials Evaluate Safety and Biological Activity of ATYR1940 in Patients With Early Onset Facioscapulohumeral Muscular Dystrophy (FSHD) High profile individuals from respectable universities are careful to put their name in association to drugs they don’t think will work.
    Kennedy Krieger Institute; The Johns Hopkins University School of Medicine, they are participating in another trial.


  9. $LIFE Polaris Venture Management Co holds its position in Atyr, it also has interesting holdings like below
    FATE THERAPEUTICS INC COM real – cheap now
    CERULEAN PHARMA INC COM – real cheap now
    PULMATRIX INC – real cheap now

    What do you think of some of the other holdings ?


  10. mcbio316 – Thanks, will take a look. FLT3 is becoming quite competitive but they have an interesting twist with PIM. As always one has to wonder if hitting another target(s) will have safety implications.
    CDK8 is a target people have been exploring but so far interest appears lower than other isoforms, especially transcription-related CDK7/9.

    Al (PTLA) – Don’t know them well but looks like their issues are manageable.

    curiousgeorge/shark/mcbio (LIFE) – I wouldn’t count on the ongoing open label non-randomized P2 in FSHD despite the clear unmet need. I thought data so far are encouraging with some dose dependent effect with limited treatment duration (anti-drug antibodies are a concern) but agree this is still a very high risk and the market is not being generous with early stage companies like LIFE.

    Tom (AUPH) – Data set is too messy, unfortunately…



  11. $LIFE Are you saying that you would not count on an approval based on P2 ? by stating the following “I wouldn’t count on the ongoing open label non-randomized P2 in FSHD despite the clear unmet need.”
    I think you are saying that the results are encouraging, the antibodies side effect i think has been mitigated by doing intraveneous transfusion.


  12. Hi Ohad, if I understood wel, you sold ARRY after last data readout failure? Art you then confident in COLUMBUS readout, which is happening in few weeks?
    thank you


  13. Hey Ohad
    just curious to know your decision about AUPH; I have sold 1/3 and at the moment plan to keep the rest– but having my doubts. You said the data are a mess… however, given the severity of the indication and the fact there are no better alternatives I am trying to be patient…

    Good news for STML – BT designation by FDA, they are also running 4 different trials for sl-401, and have started ph1 for XPO1 drug candidate. It seems that their valuation might be on the low side? what do you think? any chance of approval of Sl-401 on p2 study they are close to completing?

    Have you had a chance to look into other CNS companies more carefully… namely RLMD and VTGN; both have very low valuation (<$30M) and are reasonably funded; what's more, RMLD has a reasonable pipeline.

    Another company with low market cap that seems interesting is VKTX – they are in the NASH space, as well as a p2 SARM modulator for patients recovering from hip fracture. This is supposedly a significant market, with 300k patients needing treatment every year.



  14. Ohad, $EXEL paid off remaining convertible debt. Company is in a healthy position moving forward – is a buyout in q4 a possibility especially if 1L RCC is accepted?


  15. Hmm, adding onto Steve. If I am reading correctly the PR, debtholders can convert anytime before end of October. So why would $EXEL set the conversion rate for the notes already? Could they have gotten a lower / better rate in the future so that it would be less dilutive? Apologies in advance if I’m misunderstanding the terms but it seems early…unless someone is urging that $EXEL do so earlier


  16. The last three SEC filings after Q2: conversion of $148m debt via dilution via 32m shares; privately negotiated conversion of an additional $48m of debt via dilution 13m shares; today’s cash redemption of remaining $48m debt. Surely someone was in a hurry to payoff the debt (looks like they negotiated 45m dilution and $48m cash- not bad). Do they still have the Deerfield notes?


  17. Steve,
    The last portion could also be issued in common stock. EXEL called the notes, so the holder can request par value of the bond in cash or in stock. I’m guessing stock will be the easy decision. Regardless, important to note, this issuance isn’t fully dilutive as the $275M in debt is now retired. It creates a nice improvement in the balance sheet. Yes, significant increase in float, but not fully dilutive. EXEL will likely now have over $400M in cash at the end of the quarter ($60M coming from Ipsen EMA approval) with only $187M in remaining debt. They should be cash flow positive on organic revenues by Q4, considering no more interest payments on the notes.


  18. Also, the Deerfield notes have some interest payment obligations thru 7/2017, so EXEL is obligated to service the interest on those notes thru that time. No incentive to retire prior to then, so I would expect they wait until next summer and then retire with cash at par value, which is $107M. Then the only debt left would be the Silicon Valley Bank revolver at $80M. That could be retired at any time, if they so choose.


  19. Ohad, thanks for comments on Selvita. Curious to hear any more comments from you if you get time to take a closer look. BTW, speaking of CDK7/9, SYRS claims they have a first-in-class CDK7. Will be in clinic 1H17 looking at AML initially. Not sure if you have looked at them. Seems pretty cheap and good management.


  20. curiousgeorge (LIFE) – Correct , I think they will have to do a new, larger placebo controlled study to get approval. Don’t see how IV administration deals with immunogenicity.

    Richard Baker (TCON) – It’s been a while since I looked at them. Major problem from what I recall they had some anecdotal cases with Avastin but hard to interpret without a control arm.

    lgonber (ARRY) – I think COLUMBUS has a high probability of success given the MOA is validated by two other BRAF+MEK regimens in this population. Unless ARRY shows something phenomenal, I don’t see investors getting excited about it…

    Rodolfo -Sorry don’t know them well.

    Dan (AUPH) – I decided to sell and plan to do it on my next portfolio update (hopefully this Sunday). Lupus nephritis is indeed a very serious disease but the alarming mortality imbalance casts too big of a shadow on the data.

    Agree re:STML – BTD in hand and results continue to look encouraging. Agree they are cheap, not sure about the right timing to accumulate more.

    Sorry, don’t know RLMD, VTGN or VKTX well.

    Steve/Garry Xo/AMC (EXEL) – yes, they got rid of the 2019 debt overhang but at a heavy cost of dilution. Turns out the cash redemption was never a real option which makes me wonder why they didn’t sell shares to begin with and get it over with. They still have the Deerfield notes due 2018 and SVB loan, which they’ll hopefully pay back in cash.
    Personally I don’t think someone will buy EXEL before seeing additional sales performance and/or the HCC data.

    AMC on August 24, 2016 at 2:06 pm said: Edit
    The last portion could also be issued in common stock. EXEL called the notes, so the holder can request par value of the bond in cash or in stock. I’m guessing stock will be the easy decision. Regardless, important to note, this issuance isn’t fully dilutive as the $275M in debt is now retired. It creates a nice improvement in the balance sheet. Yes, significant increase in float, but not fully dilutive. EXEL will likely now have over $400M in cash at the end of the quarter ($60M coming from Ipsen EMA approval) with only $187M in remaining debt. They should be cash flow positive on organic revenues by Q4, considering no more interest payments on the notes.

    mcbio316 (SYRS) – I have been following them since the covalent CDK7 publication in Nature with great interest. I like the super-enhancer approach with CDK7 but tox is an open question.

    Alex (CLVS) – Rucaparib is clearly active but I am not sure it is competitive enough after TSRO’s data. No plans to get back to CLVS.



  21. Hi Ohad
    AUPH – about alarming mortality..
    ” All, however, were assessed by study investigators as being unrelated to treatment, said Neil Solomons, chief medical officer, during Aurinia’s investor call Monday morning.
    Nor were the deaths wholly unexpected, Solomons added. “We know this is a serious and life-threatening illness.” He also pointed out that, of the 13 deaths, 11 occurred in Asia, a finding consistent with other LN studies and “probably related somewhat to patient management and severity of disease in this patient population.”


  22. Hi Ohad
    regarding TRVN as their pivotal P3 studies are scheduled to report Q1 2017. Just trying to figure out the possible permutations for results.
    If they show statsig efficacy for pain compared to placebo but not when compared to morphine, do they still get approval?
    If yes, but there is no difference in AE to morphine, can they get approval?
    If yes, how commercially viable a product do they have?
    To me, looking at P2 studies, they have a clearly effective drug for pain, but hard to see a difference in AEs compared with morphine.


  23. $LIFE The PK of Resolaris was generally well behaved across all dose cohorts and throughout the study. Anti-drug antibodies (ADAs) were confirmed in approximately 40% of the dosed patients. ADAs were of low titer and had no significant effect on PK. Manual muscle testing (MMT), which measures muscle strength, was performed across 15 selected muscle groups. The composite MMT score showed approximately 0.5% improvement with Resolaris compared to a 1% decline in the placebo treated patients, indicating no reportable disease progression by this technique in either placebo or test article groups after three months of weekly treatment.
    I think the intravaneous method is used now to prevent patients from having injection site related reactions. I suspect that the drug is working, and muscle strength is generally slower to regain, kind of like you have to keep on going to the gym for a while. Mobility was gained and activity independence so that points to the therapeutic effect.


  24. $CLCD has a P3 Migraine readout coming out in 2 weeks, have you looked into their lead drug Lasmiditan at all? Shows anti-migraine effect on par with Triptans, however slightly more AEs reported. Does have a leg up on reaching cardiovascular risk patients since no vasoconstriction.


  25. Array is evaluating different options to advance the ARRY-797 program, including advancing it on its own, partnering the program for further development and commercialization or creating a separate company based on this asset.

    Is this exciting ?


  26. Ohad
    when last year CELG pulled away from the Morphosys collaboration, there were some talks that they are looking into a new approach in MM, and KPTI was in the mix.
    What do you think about their technology – SINE targeting XPO1.


  27. Alex (AUPH) – I know but still…

    RNMD (TRVN) – From what I understand they can get approval based on superiority over placebo but that doesn’t seem to be a viable commercial profile imo. I am optimistic about their chances of reaching similar pain alleviation with fewer side effects vs. morphine based on their P2 but the risk is always there.

    curiousgeorge (LIFE) – There are reasons for cautious optimisim but lets not forget data are very early. I thought they started with IV.

    John (CLCD) – Sorry, don’t know them.

    Ruhu (ARRY) – It’s interesting, don’t think it’s exciting at this stage.

    Chris – Don’t think the CNAT news are that interesting. I like ABEO and plan to add them on Sunday.

    Bouschka (TGTX) – The orphan desugnation doesn’t change my overall skepticism, especially after INFI’s data.

    andre (KPTI) – I really like the approach targeting XPO1 but we need to wait for the myeloma update next week. The market looks more optimistic following the decision to expand the trial but the company’s behaviour is a little bit strange.



  28. Hi Ohad,

    I looked at ABEO and liked them a bit too. It gave me a sense of credibility that P. Flanagin is running the Sanfilippo program as the company itself seems to primarily just license programs and not do much if any R&D in house. One note of cautious if you didn’t notice they just filed an ATM. One problem I had though was they are quite vague on their royalties/future milestones in their filings. I get the sense they paid more but without knowing if its single digit royalties or 50% royalties I have a hard time investing. I emailed (but didn’t call) the company with no success. Do you have any idea on specifics (or range) what their royalty/milestone obligations are?

    Also on a related note I looked at RGNX after your mentioning them and like them a lot more actually. Again the problem I had was understanding their royalty obligations to GSK/U of Penn. The wording wasn’t clear to me Is it only specific to the hemophilia program or do they owe royalties on all licensed programs? To DMTX the filing states the following:
    “Dimension to pay us royalties on net sales, if any, intended to be approximately equal to the amount of royalties that will be due by us to Penn and GSK on such sales. ”
    Other programs did not have that language so while I’d like to think they don’t owe any to take a position I’d want to know for sure. Any help with this is a well?

    Thank you,


  29. hi Ohad,

    three questions on the topic of this post, gene therapy:

    1) can you comment on this AVXS report; interestingly even AF, not known as an IONS supporter, recommended to read it:

    2) Given the unresolved issues of GT companies (therapeutic effect wearing off + no retreatment possible with the same vector); does investing in “gene-therapy-defeaters” aka GTDs, for example:
    – IONS vs. AVXS on SMA
    – BLCM vs. BLUE et al. with BPX-501 on a variety of indications
    seem like a reasonable idea?

    3) Would you know additional platform-companies with a sound scientific rationale, which could be labeled as GTDs?

    Best Regards,


  30. SAMi – UniQure has looked at retreatment, they have a few papers on their website with some mouse and primate data.

    Successful Repeated Hepatic Gene Delivery by Sequential Administration of AAV5 and AAV1 Vector Serotypes

    Click to access AAV1-AAV5%20readministration%20ASGCT%20poster.pdf

    Successful In Vivo Re-Administration of AAV with the Use of Two-Step AAV injection

    Click to access Readministration%20two-step%20AAV%20injection%20ASGCT%20poster2.pdf

    I think UniQure has gotten a pretty harsh shake from GT investors thinking their Hemophilia B data doesn’t measure up to Spark’s. The company is different than many others though in that they actually do in house research and have in house manufacturing capacity (2 locations). The expectations are quite low for the High dose but I wonder if the dose response will be more comparable to what happened in the BMRN trial where there was greater than an order of magnitude improvement in expression with a 3x increase in dose.


  31. Maurice – Thanks for the info.
    I don’t have ABEO’s exact royalty commitment but I assume that given their market cap any positive signals in the Sanfilippo studies will have a dramatic impact on the stock regardless of royalty rates.
    Re RGNX – I don’t expect their royalty obligations to be as high as what their partners agreed to pay them (typically mid-high single digit). Given their low market cap I feel comfortable owning them solely based on their partnered pipeline with the proprietary programs serving as a free option.

    Alex (AUPH) – The trial is already completed (probably some patients are still on the drug). Not sure what regulators will have to say going forward.

    SAMi – AVXS’ clinical data pack is clearly limited but to me the signal overshadows all the other issues. Risk is definitely there, of course.
    Re: competition, if AVXS-101 truly works, imo it is the only treatment that can offer real long term improvement to patients, especially in their early years. As a single IV treatment, I expect it to become the cornerstone of SMA1 therapy and everything else will be given on top. Also, I don’t agree all the data are subjective, mortality is quite an objective measure…
    Lastly, the conflict of interest issues they raise are real but I wouldn’t base my decision on that.

    I am sure that even if GT is a huge success, it won’t be successful for every indication and there will be a need for complementary approaches. Durability and re-treatment are option questions but even a 2-3 year window could be very clinically meaningful.

    Re-treatment with a different vector could also be feasible given the diversity of current programs.

    rodolfo – NVS was never that big in gene therapy so I don’t think it has a sig impact.

    Maurice – Thanks again for providing the information, I guess that re-treatment is a problem to worry about after we see long term safety and a 2-3 durability window. It shouldn’t be the barrier for GT imo as there will be ways to work around it.



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