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Don’t waste it

14 February 2014

By Martin Murphy

At the turn of the century, gene therapy had become a cautionary tale for modern medicine. Once hailed as a potential cure for many diseases, the idea of using viruses to patch faulty genes with working DNA had fallen into disrepute, as studies showed that this was not only extremely difficult, but also potentially dangerous. In 1999, Jesse Gelsinger, an 18-year-old with liver disease, died during a trial at the University of Pennsylvania. Three years later, an Anglo-French study of children with immune disease was halted when several patients developed leukaemia. Investigators, industry and investors began to question whether the technology could ever be safe or effective.

Fast forward to the present day, and the prospects for gene therapy could not look stronger. Better methods of delivering replacement DNA, and better selection of amenable diseases and appropriate patients, have moved the technology beyond promise: it is transforming patient lives.

The announcement last month that a gene therapy developed by the University of Oxford has improved the sight of patients with choroideraemia, a degenerative eye disease, is only the latest advance. Gene therapy is becoming viable in conditions such as leukaemia and haemophilia, and in inherited childhood disorders. In 2012, the European Medicines Agency approved the first gene therapy to be licensed for use outside trials, a treatment for inherited acute pancreatitis.

These developments have made it increasingly clear that while gene therapy is no panacea, it will be a valuable and mainstream treatment for many severe conditions. The risks have reduced appreciably since the tragedy of Jesse Gelsinger. Crucially, these risks are also matched by significant therapeutic benefits, for life-changing conditions that are otherwise difficult or impossible to treat.

Investors and industry are rushing into the field. In January, Juno Therapeutics, a U.S. cancer gene therapy company, closed a $145 million startup financing, an unprecedented amount for an academic spinout. My own firm, Syncona, which is backed by the Wellcome Trust, has just launched a new company to take forward Oxford’s work on eye disorders.

The rollercoaster gene therapy has ridden over the last 20 years is not a new phenomenon. Transformational new medical technologies often follow the same cycle: initial interest is followed by exuberant hype, then crashing disappointment as early promise is not swiftly fulfilled. Over time, the mist clears and the technology emerges in more limited but more robust form, with greater clarity on how and where it should be deployed. Gene therapy will for now remain focussed on patient populations where medical need is high and outcomes without treatment dire.

For investors, the technology cycle remains a great challenge. It’s often fairly simple to predict what a technology will ultimately be capable of doing, but very difficult to predict when it will be shown conclusively to do it. This uncertainty often drives investors to pursue near-term milestones: their goal is not to take a technology to market, but to sell on at an intermediate stage to major pharma or biotech who will take the long-term risk.

The United States is far better than Europe in getting round the problem. The Nasdaq market often provides promising companies with the investment they need, without having to target an early sale. It is proving extremely valuable in gene therapy, a field in which pharma and biotech majors generally lack experience and are reluctant to make acquisitions. By way of example, BlueBird Bio, a development-stage gene-therapy company raised $116 million on NASDAQ in June 2013, an amount which should finance their lead programme all the way to market. An even earlier stage rare-disease company, Ultragenyx, raised $122 million at the beginning of 2014.

The European equity market has been less responsive to early-stage life-science companies. With trade-sale exit the only viable option, European life-sciences groups face a financing challenge that holds back the development of a thriving sector. Syncona has been established to be a long-term investor supporting companies not just to the next milestone, but to the clinical marketplace and beyond. Such an approach should deliver financial returns for the Wellcome Trust and build innovative standalone European biomedical companies that benefit patients and healthcare systems.

Investors have to get used to riding the cycle of hype, disappointment and delivery, responding with balance to the exuberant claims made for young technologies or the disappointment when initial promise is not realised. History shows us that the flexibility of long investment horizons matter – they’re good both for business and for medical progress. If Europe is to capitalise on its strong academic foundation and share in the industrial future of gene therapy, such long-term financing solutions will be needed.


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