In this week’s cutting edge, we discuss: that the ‘dark side’ of the force is not always a bad thing; how NASA is trying to understand the effect of zero gravity in inducing nausea and if they can reduce it; that drugs are running out for ADHD; and that there are signs of a thawing (albeit very slowly) in Biotech, with a US$100m IPO.
In addition, we describe one of the trends that we are seeing in the Biopharma landscape, in a post-pandemic world. This week (after last week on infectious disease), the Peel Hunt Healthcare team have been discussing Cell and Gene Therapy (C>) and we breakdown our thinking for generalists. Just some of those name-checked today include: Teva, Takeda, Akili, SpaceX, NASA, Polaris Dawn, and Lexeo Therapeutics.
Just say no.
The number of people diagnosed with ADHD (attention deficit hyperactivity disorder) is increasing, particularly in the UK and US. This could partly be a result of greater awareness of the condition, but also, increased funding and support from local government, causing parents to seek an ADHD diagnosis (perhaps to explain lower grades). The increase in cases has resulted in increased demand for medication, resulting in some shortages of common ADHD drugs. Manufacturing delays to the frequently used stimulants produced by both Teva and Takeda have caused patients to ask for a different brand to normal, or even reduce their current dosage to mitigate the shortage. There is clearly a pressing need for new treatments for ADHD and we believe Akili, who have developed EndeavourRx (a digital therapeutic to improve cognitive impairment), are fantastically placed to address this. The technology-based treatment is also a great place to start for children newly diagnosed with ADHD as it does not involve pharmaceutical intervention.
The realities of ‘to infinity and beyond’.
Motion sickness is unpleasant at the best of times, but can you imagine experiencing it while in zero gravity? NASA and Defender Pharmaceuticals are partnering to evaluate how effective the latter’s anti-nausea gel is at reducing motion sickness, as well as improving balance and fine motor tasks like writing, during a Phase 2 clinical trial. The participants, recruited from companies such as SpaceX, Polaris Dawn and the International Space Station, will be administered the intra-nasal gel before being exposed to various motions in a simulator. The first part includes wave motion in a simulated crew capsule, while the second involves ‘provocative motion’ experienced as part of normal astronaut duties, such as parabolic flight (freefalling for up to 40 seconds), or Orion recovery missions.
Fear leads to anger, anger leads to. . . achieving your goals?
Expanding on the words of Yoda, anger does not just lead to hate, suffering and the dark side; it also can aid in achieving your goals, say researchers from Texas A&M University. In a series of experiments, the researchers made undergraduates angry (including by making them play a computer game rigged so that they lost), while measuring things like the number of puzzles correctly solved, cheating rates, and reaction time. Being angry was found to improve problem solving and reduce reaction time, but also increased the amount of cheating, in comparison to being in a neutral state. Their conclusion was that anger might actually make one more effective at completing tasks.
The light at the end of the tunnel.
On Friday, Lexeo Therapeutics (LXEO) began trading on the Nasdaq after a US$100 million IPO. The company, based in New York, was launched in 2021 and specialises in gene therapies for cardiac diseases, such as cardiomyopathy associated with rare disease Friedreich’s Ataxia, as well as Alzheimer’s; there are currently Phase I/II clinical trials ongoing for Lexeo’s gene therapies in both conditions. Results from the Friedreich’s Ataxia trial are expected mid 2024 while the results from the Alzheimer’s trial are expected in 2H24. Lexeo is not the only US company looking to IPO, as Cargo Therapeutics, focusing on cell therapies in cancer, last week revealed plans to also list on the Nasdaq. We believe the healthcare and life sciences IPO landscape is looking at least a little brighter. However, the IPO pricing for Lexeo did come in below the range (US$11 vs the US$13-15 mooted) and has traded down a little (to US$10).
To continue our series on trends within the biopharma industry that we believe will lead to a resurgence in R&D, as well as the industry as a whole (as mentioned last week), this week we will be discussing the growth in emerging technologies.
What the Peel Hunt Healthcare Team are talking about
Over the next few months, we will be publishing a series (in these pages) on trends within the biopharma industry that we believe will lead to a resurgence in R&D and the industry, hampered only by inflation and risk appetite. These articles will include themes such as:
- Innovation post-COVID
- Investment into R&D
- Emerging technologies
- Policy changes within the UK
This week, we focus on how cell and gene therapies are set to continue their rise on the post-coronavirus therapeutic landscape.
Emerging Cell and Gene Technologies
Last week, we briefly mentioned the shift in focus of mRNA companies into personalised cancer vaccines; this next generation of treatments for disease is called precision medicine. Precision medicine involves designing a treatment specifically for a patient and are usually either cell or gene therapies. Cell therapies are used for patients with a specific cell type that is not working properly, such as immune cells, and involves dosing the patient with cells that do work, usually from a donor. Gene therapies can be separated into two types: those that involve taking some of the patients own non-operational cells, editing them with a working form of a target gene in a lab so that the cells do what they’re supposed to, and then replacing them back into the patient to multiply (ex vivo gene therapy), or those that involve directly dosing a patient with a correct, working version of a gene (in vivo gene therapy). As we said before, precision medicine has the potential to have better efficacy for the patient if the treatment is specific to them, or the disease itself. Using cell and gene therapies means that diseases that were previously untreatable can now be targeted effectively.
In 2019, the FDA published a statement stating that, by 2025, they would be approving between 10-20 cell and gene therapies every year; this estimate was based on the number of products currently being investigated in biopharma pipelines. So far the FDA has approved a total of 32 cell and gene therapy products; with the first advanced therapy (a cell therapy) approved in 2010. Between 2010-2016 ten products were approved that were all cell therapies (primarily for immune conditions), but 2017 is where the space within the US begun to get interesting. The first gene therapies were approved by the FDA in 2017 and included both in vivo and ex vivo therapies. Since 2022, the number of both cell and gene therapies being approved has increased sharply, with five approved in 2022 and seven in 2023 thus far. This is not yet meeting the FDA’s prediction of 10-20 products a year, but with two years to go, the FDA may still meet the lower end of the prediction.
Approvals, of course, rely on adequate safety and efficacy data from pivotal clinical trials but as the number of products under investigation increases, this increases the likelihood of a successful product. To meet the demand in rising approval applications, this year the FDA reorganised the Center of Biologics Research and Evaluation (CBER), the division that handles the approval process for advanced therapies, and expanded the Office of Tissues and Advanced Therapies (OTAT) into a ‘super office’ called the Office of Therapeutic Products. It is believed the reorganisation will improve the functionality of the department and increase expertise in advanced therapies, potentially increasing the number of approvals (provided good safety and efficacy results).
Source: Company accounts, Peel Hunt estimates
Some of the gene therapies approved by the FDA are one-time treatments, meaning a patient only needs to be dosed once and the reduction in symptoms is sustained throughout the rest of their lifetime; in all but words, it is essentially a cure. One-time treatments come with a price tag however, because of both the complex nature of the therapy, but also the lack of recurring revenue from continued treatment. In 2022 and 2023, the three most expensive treatments in the world were approved by the FDA. ROCTAVIAN (developed by BioMarin) treats the blood disorder haemophilia A and costs US$2.9m per dose, SKYSONA (developed by bluebird bio) treats a genetic nervous system disorder called cerebral adrenoleukodystrophy and costs US$3m per dose, and, topping the list, HEMGENIX (developed by CSL Behring) treats haemophilia B and costs US$3.5m per dose. Interestingly, the cost-benefit analysis produced by the Institute for Clinical and Economic Review (ICER) has shown that the high cost of one-time treatment is actually more cost-effective than ongoing, continued medical treatment. Reimbursement schemes for these treatments are outcome-based agreements (OBA), meaning that if a threshold of symptom reduction is not reached after treatment, the payer will be reimbursed the cost of treatment. However, understandably health insurance companies are hesitant to offer coverage for these expensive treatments and say they will assess coverage on a case-by-case basis.
The commitment by the FDA in wanting to meet the rising demand approval submissions for precision medicine therapies, as well as the viewed cost-effectiveness of one-time gene therapies, suggests to us that advanced therapies have a bright future in the biopharma industry, particularly as advanced therapies are classed as biologics and are therefore less impacted by the US’s Inflation Reduction Act. Next week we cover more on the IRA and how reimbursement schemes are affecting investment into R&D.