Biotech
Monday, September 19th, 2022 9:05 am EDT
Until this August, just two gene therapies for inherited diseases were available in the U.S. Now, in the span of one month, that count has doubled, with the Food and Drug Administration approving new treatments for a rare blood condition and a childhood brain disorder.
The agency’s decisions, delivered Aug. 17 and on Friday, represent a turnaround for the gene therapy field after a series of setbacks had slowed progress. They also offer a lifeline to the treatments’ developer, the Massachusetts-based biotechnology company Bluebird bio, which is running out of money and earlier this year warned investors it may not be able to stay afloat.
Selling the two gene therapies could help Bluebird survive. More broadly, the company’s success or failure launching the treatments will be a signal to other gene therapy developers nearing the FDA, among them CSL, BioMarin Pharmaceutical and PTC Therapeutics.
“We’ve had to cross this desert for years and, all of a sudden, we have the two-fer from Bluebird,” said Geoff MacKay, CEO of a gene therapy biotech called Avrobio. “For those of us who have been in the field for a decade plus, this is an incredible period of time.”
Bluebird’s development of its newly approved treatments dates back just as long, to when the company, then named Genetix Pharmaceuticals, was an early explorer of gene therapy. Renamed in 2010, the company came to be seen as a leader in the field, which after many lean years was benefiting from improved scientific tools and renewed investor interest.
FDA approvals of the first two gene therapies, a blindness treatment called Luxturna and the neuromuscular disease therapy Zolgensma, in 2017 and 2019 were a further proof point, spurring predictions of a coming wave of gene-based medicines.
More recently, though, gene therapy development has been marked by renewed questions around safety, manufacturing missteps and more conservative regulatory decision making. Bluebird hasn’t been immune. It has run into repeated delays due to disagreements with the FDA over gene therapy production, while cases of cancer in its clinical trials slowed testing further.
That Bluebird was still able to persevere and win back-to-back approvals is an encouraging sign for other companies in the field, according to MacKay. The FDA and its advisers were also willing to balance the cancer risk associated with Bluebird’s treatments against their benefits, suggesting a degree of comfort with gene therapy technology more broadly.
“The more clarity, the more this is a well-traveled path, the more it facilitates drug development [and] changes investor confidence,” MacKay said in an interview ahead of the most recent FDA clearance.
But as a result of its setbacks, Bluebird is arriving on the market in a precarious position. Its stock price has tumbled precipitously over the past five years and its funds have dwindled to such a low level that the company was forced to acknowledge the risk of insolvency. To save money, Bluebird laid off 30% of its staff and moved its headquarters. In March, it lost its chief financial officer and her replacement will depart this fall.
Neither of its new gene therapies, called Zynteglo and Skysona, are expected to become big sellers, despite prices that rank as among the most expensive for any drug. Bluebird will charge $2.8 million for Zynteglo and $3 million for Skysona, although it has offered to reimburse part of Zynteglo’s cost if patients don’t benefit.
The company expects to treat about 50 patients initially with Zynteglo, and eventually many more of the estimated 850 or so who are healthy enough to receive the treatment. The market for Skysona, which treats a brain disorder called cerebral adrenoleukodystrophy, is smaller still, with Bluebird anticipating it will treat about 10 patients each year.
The next step for Bluebird will be convincing insurers to cover its therapies, which would likely otherwise be out of reach for patients and their families. While it’s confident it can do so, the company ran into significant difficulties in Europe, where Zynteglo and Skysona were approved previously, and later withdrew both products from the market.
“With Zynteglo, we are several weeks into our launch now and we are getting a lot of positive feedback from payers,” said Tom Klima, Bluebird’s chief commercial and operating officer, on a call with analysts Monday. The company has signed multiple contracts so far.
“We feel confident that payers will support Skysona,” he added.
Crucially for Bluebird, the approvals of Zynteglo and Skysona both came with so-called priority review vouchers granted by the FDA. These vouchers can be used to shorten regulatory reviews for new drug applications and may be sold to other companies. Recently, they’ve commanded prices between $100 million and $110 million, giving Bluebird an opportunity to secure significant funding that’s not dilutive to its existing shareholders.
“We do not need them because the therapies we develop have priority review in general,” said Bluebird CEO Andrew Obenshain in an interview Saturday. “So we will sell both — sequentially, though, not all at once.”
Bluebird held $218 million in the bank as of June 30, and expects its restructuring efforts will bring its cash burn down to about $60 million per quarter by the end of this year. That level of spending will be sufficient to launch Zynteglo and Skysona, as well as prepare to file for approval of a third gene therapy for sickle cell disease next year, the company’s outgoing CFO Jason Cole said on Monday’s call.
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