Gene therapy updates – One big acquisition, two IPOs and a mixed bag of data

It is hard to overestimate the impact of the Novartis (NVS) /Avexis (AVXS) deal. So far, big biopharmas have had limited exposure to gene therapy and those that did get into the field focused on early-stage collaborations: Pfizer/Bamboo, Biogen/AGTC, Roche/ 4DMT, Abbvie/Voyager etc. This is understandable given the unique product profile gene therapies represent: One time irreversible treatment, lack of long term follow up and creative reimbursement models.

The $8.7B acquisition of Avexis, just three months after the deal with Spark (ONCE), makes Novartis the first pharma to embrace gene therapy as a commercial opportunity. The deals also make Novartis the undisputed gene therapy leader with (hopefully) two products on the market next year.

Investors continue to pour money into gene therapy IPOs. In January Solid Biosciences (SLDB) managed to go public despite safety concerns raised by the Jim Wilson, and Homology Medicine (FIXX) completed its IPO last month, raising $165M. A third company, Rocket Pharmaceuticals (RCKT), raised ~$78M following its merger into a public shell.

Gene therapy stocks are understandably very strong as investors are excited with the Avexis deal, but looking back on the last 9 months, actual data from gene therapy programs haven’t always been that exciting. I went back to the list I put together in July and the overall performance wasn’t stellar…

Audentes – Exciting data from a single patient

Audentes (BOLD) stands out as the winner with very early but encouraging data in XLMTM, a rare muscle disease. The most striking finding came from the first patient in the study (9 months old) that included a dramatic improvement across two clinical scores (covering neuromuscular and respiratory function) at 12 weeks post-treatment. Importantly, the scores obtained after 12 weeks were approaching those seen in healthy children.

The second patient (~4 years old, higher baseline performance) experienced milder improvements after 8 weeks of follow up and did not demonstrate an improvement from week 4 to week 8 but still reached the same neuromuscular score (CHOP-INTEND) reported for patient #1. Data for two additional patients didn’t demonstrate significant improvements but follow up was limited. One reason for concern was elevated troponin levels which may indicate an immune reaction against transduced cells.


Next update will be crucial in order to understand robustness, durability and long term safety profile. If the effect is corroborated and maintained in additional patients, XLMTM could be the first muscle indication to be treated with gene therapy and a proof for AAV8’s ability to target muscle cells (on top of liver). The next big muscle indication for gene therapy is obviously DMD, with multiple programs currently in P1.

Mixed data from Voyager, REGENXBIO and Ultragenyx

Voyager (VYGR) – Updated data for VY-AADC were mixed as all three dose cohorts demonstrated signs of efficacy but cohort 3 did not perform as expected and there was no dose-dependent response.

VYGR - Dyskinesia

REGENEXBIO (RGNX) – Limited update from RGX-314 in AMD, only disclosing safety profile looks good and that there is dose dependent expression of the protein in the eye. Full data set is expected later in 2018.

Ultragenyx (RARE) – Updated results from the OTC program (DTX301, AAV8) started to show early signs of activity after a previous disappointing readout. Of the three patients who received the lowest dose of DTX301, one patient achieved a durable improvement in urea production (OTC deficiency is characterized by impaired urea production) and discontinued background medications. The two other patients did not achieve any improvement, so hopefully higher doses will be able to improve rate of clinical responses.

Setbacks – GenSight, Spark, Solid Bio

GenSight –reported negative results from its P3 in LHON, a rare ophthalmic indication. Although expectations weren’t high judging by the company’s market cap, this is still one of the largest randomized studies for gene therapy and continues to question using intravitreal administration with AAVs.

Spark – reported underwhelming data in Hemophilia A (in contrast to my bullish prediction) but the stock recuperated since thanks to positive sentiment around gene therapy and encouraging comments by management about future data.

Solid Biosciences – The company’s lead program was put on clinical hold following a severe adverse event in the first DMD patient who received treatment.  Solid’s safety issues appear vector-specific (Sarepta’s DMD program is recruiting without any major issues) but are a painful reminder for how risky the field is.

Crucial year ahead

The remainder of 2018 will have important readouts from over 20 studies. By year-end, investors should have a better understanding of whether the current enthusiasm is justified…

Portfolio holdings – April 16, 2018   

Biotech portfolio - 16-4-18biotech etfs - 16-4-18 

109 thoughts on “Gene therapy updates – One big acquisition, two IPOs and a mixed bag of data

  1. Ohad,
    ESPR/ Cvot results….Aside from the market reaction, there’s an interesting story developing in Cvot’s. CIRT TRIAL ( low dose methotrexate) Halted by NIH. Study group released a statement that methotrexate patients had nothing to be concerned about. Add this to the CANTOS trial results on decreased CV AE’s with another anti-inflammatory agent and two large colchicine studies in Australia that are ongoing ( with some readouts showing reduced coronary plaque on CT angiography with colchicine treatment.
    To my knowledge, pure reduction of LDL-C …even below 60 has not shown reductions in coronary plaque…( except when augmented with Zetia).
    Are these suggestive of a shift in direction away from pure LDL reduction?


  2. Hey Frank,
    Yes, I think you are right. ESPR’s CVOT trial PI even argued for this, mentioning the large study (forgot if it was NOVARTIS or SANOFI) where a drug that lower only inflammation decreased cardiovascular events. That was always an argument that ESPR was keen on making: reduced inflammation, and something they claim distinguishes their drug from PCSK9 drugs.
    The market reaction is again underwhelming and disappointing, but it is understandable given continued imbalances in AEs. However, many of the comments I have seen on the biotwitter sphere seem misplaced: they forget that the main drug for ESPR will be the Zetia combo drug, and they also seem to forget that the LDL lowering reported is on top of statin background therapy, so an additional reduction.


  3. O’Hara

    Are you familiar with MGEN. Their treatments revolve around treating various indications by microRNA modulation. Market cap seems reasonable given multiple early stage programs in several areas. In general, do you think treatment utilizing RNA to regulate gene expression can be a effective way to treat different diseases.


  4. Ohad
    TGFb dedicated company srrk had an ipo.
    No sure about the valuation (~350M) but it looks interesting. Too early to jump in??



  5. Alex (AMBI) – Not yet, triggering is after first commercial sale imo.

    Biocest (STML) – Hard to predict commercial trajectyory in BPDCN as there is no real benchmark. If you assume sales multiple of 5, there is still room for upside.

    DAn (XENE) – Personally I am less excited about that program, prefer new compounds with full patent protection and best in class profile.

    Christian (AKBA) – Could be an interesting bet on the “underdog’ even though there are reasons for the valuation gap. Don’t know the field well but the AKBA program has a checkered history.

    Jaime Allen (XENE) – Agree, good update, still preliminary as they haven’t completed the MAD portion but this is exactly what one would hope to see at this stage. More de-risked now.

    Christian (KURA) – Yes, I plan on holding it as I think it can easily double if ORR continues to look good.

    Biohero (RGNX) – Agree it isn’t cheap but exposure to many AAV9/8, including BOLD’s XLMTM program could justify a big portion of valuation. Now they need data in AMD or MPS1/2 to drive price higher. AVXS wasn’t cheap either but it’s important to have exposure to the leaders in an innovative field like GTx.

    Les (GEMP) – Even after the recent crisis, I prefer ESPR. in that field

    Christian (XENE) – I think it’s very positive, still early but the program is even more de-risked now. Agree about market cap being low, one of the cheapest names I am aware of. Will publish my take on the data soon.



  6. Andre (BOLD) – Data are still directionally positive but I was expecting a more robust effect, kinda hoping to see more stories like patient #1 but perhaps it is not realistic in older kids.

    I am pretty sure ADVM and AGTC have good manufacturing capabilities.

    Russe9 (LOXO) – Efficacy is clearly there and going with a selective compound appears to pay off but I didn’t think their data implies superiority over BPCM.

    Christian (DVAX) – Sorry don’t know them well. A lot of activity around innate immunity recently.
    TGFb – A lot of buzz around the superfamily, several private companies with novel approaches but still no clinical validation. Let’s wait to see Merck KGa’s data in HPV+ tumors.



  7. Ohad

    You have mentioned XENE as being one of the cheapest names in the bio space. Can you share other names you feel fall into that same category?


  8. Jinyu

    QURE – They made a great comeback but at these levels without clinical data from their modified product I prefer to wait for a better entry point.
    RCKT – I am following them and think they have some interesting concept like in vivo selection of transduced cells but stage and valuation are an issue imo.

    ARGX – Missed the big jump with the MG data, still following them.
    XLRN – Anxious to see their MDS data, would be great to have a new drug for MDS but valuation is high in light of CELG’s dominant share of that product. Don’t think they will develop current molecules for cancer, not sure they have the right ligand selectivity, focus today is on TGFb.

    Ruhu – I am still holding both.
    Can’t comment on ARQL.

    andre (ALBO) – Not yet sorry. PFIC sounds like an attractive indication for GTx so this is a potential threat in the long term.

    Haribo (XENE) – Just published today 🙂

    DAn (GTXI) – Haven’t looked at them for a while.

    Dave (RVNC) – Sorry, not familiar with the field.

    andre (FCSC) – Will check, could be an interesting hedge for ABEO.

    DAn (ESPR) – The market is rightfully nervous but after reviewing the data I find it hard to believe BA can dramatically accelerate tumor progression within several months. I think the signal is false but you never know…

    Fan (ABEO) – Not sure what triggered the selloff, perhaps the DEB data and competing data from FCSC.

    CD – I actually think that the problem is not always quality of candidates but valuations.

    Carlos (LIFE) – Not sure, haven’t been following them recently but recent changes certainly aren’t encouraging…

    andre – Haven’t seen this list. Yep, Hem A and B will probably one of the first.

    Les (ESPR) – I am still holding as I think the death imbalance is just bad luck but we don’t know for sure so the risk is obviously there.

    Frank (ESPR) – I think that experience with statins + CANTOS data clearly implicate inflammatory mediators as important for long term outcomes. In that sense, ESPR’s CRP reductions are very encouraging.

    Xavi – Don’t know them well.

    MGEN – Agree, just started following them and the fact they see activity with a systemic miRNA is quite impressive.

    Andre (SRRK) – Still not sure how differentiated their approach of targeting latent myostatin is. In any case, don’t see the urgency given stage and valuation.



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