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 

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

  1. Hi ohad, which Main catalysts/readouts do you See for gene Therapy in 2018/II? Thanks

  2. Hi Ohad,

    Does GenSight failure have any readthrough to ADVM amd program? I realize different disease but you mentioned calling into question “intravitreal administration with AAVs” which ADVM is doing with their AMD program in contract to RGNX’s sub-retinal approach?

    Thanks for great insight as always!

  3. Hey Ohad
    Thanks for the reply. Seems to me that TRIL is making progress while their valuation is still low.

  4. Hi Ohad. AGTC has finally made an upside move and issued two press releases updating full enrollment of XLRS and first dosage in XLRP. Are u still bullish on AGTC? I see u are still holding. Like u said GT is hot now and AGTC does have a few shots on goal with their pipeline.

  5. Ohad, I see you have a fairly large position in XENE? Does that reflect your confidence in XEN1101? If XEN1101 can replicate Ezogabines efficacy without the pigmentation issue, they’ll have a very attractive drug. Thank you

  6. Hey Ohad,
    How would you compare NITE and AGTC considerid they are pursuing this same indication? Is there room for two or three x-linked retinitis pigmentosa therapies, or is the market too small?

  7. Ohad
    Do you have an opinion about MOR?
    They have antibody targeting amyloid plaques- Roche is running 3 Phase 3 trails for Alzheimer’s disease.

  8. Hi are you familiar with ALBO? not ‘cheap’ but they have cash. very rare disease.

  9. Ohad

    The sell off of SAGE yesterday seems like a overreaction.Its been attributed to Biogens deal with IONS. Do you view this as a buying opportunity, or is the valuation to high to commit further funds too?

  10. Biohero – A lot of updates from existing programs, I think most companies should have updates. The ones I am most intrigued about are for muscle diseases BOLD and preliminary update from SRPT. ONCE should have important data in HemA and ABEO for their 2 Sanfilippo programs. Also curious to see RGNX’s AMD data as they state they see dose dependent expression of their protein.

    Mike (ADVM) – Indeed different indications but it adds risk on an already risky program (even subretinal admin didn’t work so far).

    steve (FMI) – Good question. I completely missed the IO applications of their technology especially as liquid biopsies. Valuation is kinda high though…

    DAn (TRIL) – Yes, but they still need convincing clinical data…

    Luigi (AGTC) – Exactly, it’s all about a broad exposure to the field. Hard to predict who will be the next AVXS… Personally I like RPGR as an indication but follow up takes more time. NITE also has a program in P1.

    Shane (XENE) – Agree, which is why I am still holding. Hope to publish something on them next week.

    Christian (ARNA) – No strong opinion, definitely a great turnaround move.

    DAn (NITE/AGTC) – There is some overlap but the two companies have additional programs so I prefer to own both. XLRP is relatively big so there is room for more than one product, I just hope at least one of them will be clinically beneficial.

    andre (MOR) – I wouldn’t hold my breath for an A beta antibody…

    don (ALBO) – Wasn’t aware of them, just got the Jefferies initiation so need to dig deeper.

    Dave (SAGE) – I also think the market over-reacted. I plan on holding as the commercial opportunity in depression is huge.


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