No way to tell on a short-term basis where this stock goes from here. It's a gene therapy company. I could be wrong, but with some additional successful FDA trials, this area may become a Wall Street darling like Genomics did last year. If you want to know more, read this long article on the subject.
Source: Chemical Market Reporter, March 20, 2000 v257 i12 pFR 15.
Title: Waiting for the Fruits of Gene Therapy.(Brief Article)
Author: Jim Papanikolaw
The promise of gene therapy has yet to he realized, but researchers are still hopeful that this next decade will see results.
Gene therapy is one of the many areas in biotechnology that can open new doors for patients, doctors and researchers looking to treat hereditary and non-hereditary diseases. However, whether gene therapy can meet expectations and emerge as a major health care sector remains to be seen.
"During the last 10 years, gene therapy has come closer to reaching its potential, and over the next five years, its viability will certainly be realized from both a clinical and commercial perspective," says Credit Suisse First Boston analyst Alex To.
The first products based on gene therapy are expected to hit the market by 2003, and revenue will initially be around a mere $171 million. However, as safety concerns are overcome and more products enter the market, sales are expected to grow to $4.77 billion by 2008, according to Foster City, Calif.-based Front Line Strategic Management Consulting.
Gene therapy involves the insertion of genetic material into cells to treat disease. Theoretically, genetic material can be used to replace or repair genetic anomalies that lead to disease. The technology can also make cancer and infected cells become specific targets of the patient's own immune system. The term gene delivery is also used to describe this field because of the increasing diversity of how the technology is being used.
The idea of genetic rewiring to improve human health sounds reasonable, but putting that idea into practice has been a challenge because the right amount of genetic material must be placed in the appropriate area. The genetic material also has to be protected from degradation before cell entry. To accomplish this, vectors are used to transport it into a cell.
Vectors can involve either benign and functional versions of infectious viruses, such as the adenoviruses and herpes simplex viruses, or non-viral methods, including lipids, electroporation (using an electric current through the injection site) and plasmids (naked DNA).
The main therapeutic areas of research currently include cancer, cardiovascular disease and HIV infection. Cancer will be the main market for gene therapy because of the large number of products in clinical development and the lack of effective treatments, according to Front Line Management. Because cardiovascular disease appears to be a good fit with gene therapy technology, leading to strong clinical data, this market is expected to grow at the fastest rate. Growth in the HIV market is also expected to be rapid as more products come to market and patients combine HIV gene therapy with the cocktail regimen.
The markets for monogenic diseases, where one genetic defect is directly related to a specific ailment, are considered small in comparison. However, the value of these markets, relative to the disease population, will be larger than other indications because of the inadequacies and cost of current treatments, according to Front Line Management.
The gene therapy industry includes both large pharmaceutical companies and small to mid-sized biotech firms that are developing different vectors for use in treatment. Large pharmaceutical companies, affiliated with gene therapy through either alliance or acquisition, include Schering-Plough, American Home Products, Novartis, Chiron and Rhone-Poulenc Rorer, now part of Aventis.
Among these companies, Aventis through Rhone-Poulenc Rorer is considered to be a major player in gene therapy through the establishment of RPR Gencell and multiple research alliances with biotech companies that include Enzon, Genetix Pharmaceuticals and Virogenetics. RPR Gencell was launched by Rhone-Poulenc to develop gene-based therapies for cancer and cardiovascular diseases.
Through a network of partners, Gencell is involved with a number of strategies within cancer and cardiovascular disease research, including p53 tumor suppressor gene research and antiangiogenesis, which involves inhibiting blood cell formation within tumors. The company is also working on treatments in cancer immunology and genes that code for antibodies that can bind to mutated Ras proteins, thus reducing uncontrolled cell division and overall tumor growth.
Areas of cardiovascular disease research by RPR Gencell include stimulating blood vessel formation to increase blood flow and antirestenosis, a process of controlling arterial smooth muscle cell division following angioplasty procedures.
Schering-Plough's Canji, acquired in 1996, is the company's center for gene therapy discovery, focusing primarily on cancer and other serious diseases. Canji's p53 gene therapy uses a genetically engineered adenovirus, a virus in the same family as the virus that causes the common cold, to provide normal p53 function to tumor cells deficient in p53 tumor suppressor activity.
Preclinical studies have demonstrated that the introduction of a normal p53 gene into a malignant cell, where the p53 gene is absent or mutated, can suppress the cell's malignant state or result in apoptosis (programmed cell death). This therapeutic approach may have a potential application in at least 50 percent of all human tumors, according to the company. Clinical trials involving p53 gene therapy are being conducted by Schering-Plough for ovarian cancer (Phase II/III), primary liver cancer (Phase II), and colorectal cancer metastatic to the liver (Phase II).
American Home Products is developing gene therapy treatments through its pharmaceutical division Wyeth-Ayerst. In May 1998, Wyeth announced the acquisition of Apollon Inc., which specializes in DNA-based vaccine technology that can be allied to gene therapy. Apollon's Genevax vaccine product development candidates are in development for the prevention and treatment of cancer and viral infections.
Genetics Institute, which was integrated into Wyeth in 1998, formed the Genetics Hemophilia Group, also in May 1998. Although the move was precipitated by commercial and clinical products, including BeneFix Coagulation Factor IX (recombinant), ReFacto factor VIII and Interleukin-12, the mission of the group is to develop gene therapy products for hemophilia patients.
Novartis is also involved in gene therapy. In 1998, Novartis announced its intent and later finalized plans to consolidate operations of its US cell and gene therapy subsidiaries, SyStemix, Inc. in Palo Alto, Calif. and Genetic Therapy, Inc. (GTI) in Gaithersburg, Md. GTI concentrates on delivery systems (vectors) for gene therapy, while SyStemix is developing cell-based gene therapies using its core capabilities in human hematopoietic stem cells for a variety of diseases, including cancer and AIDS. Both companies are involved in additional scientific activities, including vector development, scale-up and manufacturing, cell processing and transduction, and clinical evaluation of product candidates. Projects are underway in HIV, oncology, multiple sclerosis and other fields.
Chiron, through its 1995 Viagene acquisition, is pursuing the clinical development of multiple gene therapy products. Delivery systems include alpha virus replicon particles and plasmid DNA verions that are useful for short-term, high-level expression. Adeno-associated virus (AAV) systems are noted for their efficiency in delivering genes to non-dividing cells, such as muscle and brain tissue. Another approach under study involves the direct insertion of genetic material into cells without using a virus-derived vector, according to Chiron.
The company's Factor VIII gene therapy treatment for hemophilia is designed to treat patients with hemophilia A by providing a functional gene and restoring circulating levels of Factor VIII, a blood-clotting agent. The treatment is currently in clinical trial testing.
Chiron's TK Therapy for GVHD targets graft-versus-host-disease (GVHD), a potentially life-threatening disorder in which donor bone marrow cells used in leukemia treatment attack the host. In this therapy, Chiron's proprietary vector delivers the thymidine kinase (TK) gene into the donor cells before transfusion, making it possible to kill the transplanted cells as needed to stop the disease process. This product is also in clinical development.
Genzyme, through Genzyme Molecular Oncology, licensed to Schering-Plough Corporation its rights to the p53 gene. Schering-Plough is now conducting phase II trials of a p53 therapy that if successfully commercialized would provide milestone payments and Genzyme Molecular Oncology's first product revenue through royalties. The company is developing cancer products focusing on cancer vaccines, angio-genesis inhibitors, and cancer pathway regulators. It is shaping these new therapies through the integration of its gene discovery, gene therapy, small molecule drug discovery, and protein therapeutic efforts.
Front Line believes the rate of pharmaceutical companies acquiring gene therapy companies will decrease in the future because the explosion of new technologies will make it more difficult to predict which one will be the most successful. This will likely lead a pharmaceutical company to take a wait-and-see approach before committing to a particular company or gene therapy system.
The rate of partnership formations between pharma and gene therapy companies is expected to remain the same. The lack of major clinical successes will prevent partnerships from increasing and is expected to offset the growing diversity in technologies that will require pharmaceutical companies to update their links to the industry.
[Graphic omitted]However, the rate of collaborations forming between gene therapy companies is expected to rise in the future as technologies proliferate and increase the need to pool technologies and resources to produce the best products.
There are about 40 to 50 companies with some involvement in gene therapy, according to industry estimates. These companies are either developing clinical trial therapeutics or technologies with potential applications in gene therapy. Many of these firms have research collaborations with other gene therapy companies.
A case in point is San Diego, Calif.-based Vical Inc., which develops biopharmaceutical products based on its naked DNA gene transfer technologies treatment. The company refers to itself as a gene "delivery" company to include gene delivery applications beyond replacing defective genes. Vical has a handful of alliances in different therapeutic categories, but also internally develops cancer therapies designed to induce an immune response against cancer cells without causing serious side effects.
Vical's lead candidates, Allovectin-7 and Leuvectin, are both in late-stage clinical trials for multiple indications. Allovectin-7 for the treatment of metastatic melanoma is in Phase III trials for other therapies and in Phase II as a stand-alone therapeutic. Allovectin-7 for treating squamous cell carcinoma in the head and neck is in Phase II clinicals.
Allovectin is a DNA-lipid complex that has the genetic code for HLA-B7, an MHC Class I antigen that is injected into the tumor. Once Allovectin-7 enters the cancer cell, the antigen is displayed on the surface, like a red flag,
allowing the patient's immune system to recognize and attack the tumor. The other product, Leuvectin, is in Phase II testing in patients with kidney and
prostate cancer.
[Graphic omitted]The company says the advantages to using naked DNA gene transfer technology, which uses no viral components, include convenience, safely, ease of manufacturing, and cost-effectiveness. Vical recently announced a research agreement with Human Genome Sciences (HGS) that involves speeding the development of gene-based therapeutics. The deal combines Vical's naked DNA delivery technology with HGS' proprietary genomics database.
"We have identified the potential value in combining gene discovery and gene delivery, and we are pleased to enter into this strategic genes-to-drugs collaboration with an industry leader in the genomics revolution." says Alain B. Schreiber, Vical's president and CEO. "The expansive patent position of Human Genome Sciences and VGI's pioneering work in gene-based cardiovascular therapy provide excellent porduct pipeline growth opportunities for Vical."
In March 1999, GeneMedicine combined with Megabios to form Valentis. Valentis was in turn merged with PolyMASO Pharmaceuticals in August. During the year, the company put two new products into clinical trials, advanced one product into a Phase IIb trial, acquired an angiogenesis gene and the associated protein, initiated a DNA manufacturing business with Qiagen and DSM Biologics, and completed three product development collaborations.
The Burlingame, Calif.-based company says it has one of the broadest portfolio of delivery technologies for biologics in the industry, with technologies for the delivery of genes, proteins, peptides, antibodies, and replicating and non-replicating viruses. The company has five products in clinical development that are targeting half-billion dollar markets, and it is expecting to put three more products into clinicals this year.
Valentis also recently introduced a new family of products--gene medicines for secreted proteins. This new area incorporates Valentis's Protective Interactive Non-Condensing (PINC) polymer muscle delivery system, which is enhanced using electroporation. This allows for long-term systemic administration. The company believes the resulting products will provide long-term expression of therapeutic proteins at controllable levels with low manufacturing costs, the ability to redose, and normal storage characteristics.
[Graphic omitted]Richmond, Calif.-based Onyx Pharmaceuticals' focus is on cancer. The company formed a research collaboration with Warner-Lambert last October to jointly develop and commercialize Onyx's Phase III anticancer product, ONYX-015, plus two new armed anticancer viruses. ONYX-015 is a genetically modified adenovirus that replicates in and kills tumor cells deficient in p53 tumor suppressor activity ("p53-deficient" cells) and not in normal cells.
As part of the deal, Warner-Lambert will make an upfront payment and equity investment in Onyx over the next two years totaling $15 million and will also provide $40 million in funding for the Phase III clinical trials and other ongoing clinical development studies for ONYX-015.
Further, Warner-Lambert will provide support for the research and development of two new products. In addition to the committed funding, over $100 million could be payable to Onyx on the achievement of milestones for the products. The clinical development costs of the products will be shared 75 percent by Warner-Lambert and 25 percent by Onyx, after Warner-Lambert has provided the committed funding for ONYX-015.
Fremont, Calif.-based Cell Genesys Inc.'s therapeutic focus is on cancer, hemophilia, and cardiovascular disease. The company claims to have the largest patent portfolio in the gene therapy field. The company is co-developing its Gvax cancer vaccine with Japan Tobacco's pharmaceutical division for prostate cancer (Phase II) and lung cancer and (Phase I/II). The company also has preclinical studies in the areas of hemophilia, cardiovascular disease and Parkinson's disease. The product candidates utilize a "toolbox" of gene delivery systems based on adenoviral, lentiviral, and retroviral vectors.
In 1999 Genesys's potential acquisition by Geuzyme was terminated due to the significant increase of Cell Genesys' minority ownership of Abgenix, an antibody company that focuses on antibody research and markets XenoMouse technology, which can produce humanized antibodies against theoretically any disease target suitable for antibody therapy.
Oxford, UK-based Oxford Biomedica is a gene therapy company that was spun out of Oxford University in 1996. The company formed a cardiovascular research collaboration with RPR in 1998. The company focuses on developing gene vectors from viruses that are not known to cause disease in humans. One example is the LentiVector system, which is based on a horse virus, equine infectious anaemia virus (EIAV).
Oxford says it has made a detailed assessment of potential markets for its initial products. Market assessments are based on the clinical impact of a gene-based therapeutic, the published numbers of available patients and published estimates of costs of gene therapy products. Therapeutic areas include oncology, virus infection, neurobiology and genetic deficiency disease. Products in development include MetXia for breast cancer patients, BetOva for ovarian cancer, GlioStat for brain cancer, ImmStat for HIV infection, and ProSavin for Parkinson's disease.
The absence of a commercially available treatment and recent negative press coverage (see related sidebar) represent some of the challenges that lie ahead for gene therapy. However, based on the rich pipelines of so many companies, both big and small, analysts believe gene therapy today is poised to go from an industry with potential to an established method of health care.
Assessing a Setback in Gene Therapy
The decade-old field of gene therapy represents a new approach to diseases that are inadequately treated, if at all. However, an investigation by Food and Drug Administration and a wave of press coverage stemming from a failed University of Pennsylvania gene therapy trial has casted a cloud of doubt over the industry.
On September 17, 1999 Jesse Gelsinger died at U Penn, four days after receiving a dose of gene therapy for ornithine transcarbamylase deficiency (OTCD), a rare inherited liver disease that causes ammonia build-up in the blood. The death has been said to be a result of an adverse immune reaction to the modified adenovirus used to deliver the genetic material into the liver cells. Wild strains of the adenovirus can cause common cold-like symptoms. The eighteen year old became the first know person to die from a negative reaction to a gene therapy treatment.
The trial was halted after an FDA inspection revealed problems with the trial. Issues related to the trial currently under review by the FDA include implementing patient exclusion criteria, following stopping rules, initiating protocol changes, informed consent, and submitting reports of animal deaths.
Recently, questions were raised about another clinical trial that may have used gene therapy contaminated with hepatitis C virus (HCV) and HIV. This trial involved treating children with advanced cases of neuroblastoma, a nervous system cancer, in a Memphis and Houston hospital.
However, additional testing by the FDA found that the treatments were not contaminated with HIV and HCV and the children were not exposed to infection. FDA said the lab tests used in the trial were error prone.
Although the neuroblastoma trial was a false alarm, the long term impact of the U Penn project is still being determined. Analysts say the regulatory process may become more stringent on gene therapy trials to prevent this from happening again, but overall progress in the field is not expected to be halted in its tracks.
"The death of Jesse Gelsinger, attributed to a gene therapy experiment, is a tragedy. So was the crash of an Alaska Airlines plane recently. While these events will heighten safety concerns by regulators, neither event alone will prove to be a major setback for their respective industries," says Jim Thompson, partner at Foster City, Calif.-based Front Line Strategic Management Consulting.
"The genomics industry is generating mountains of novel information, and among the beneficiaries of that information will be researchers looking to discover and develop novel gene-based therapies."
Despite reports of other trials being halted following the U Penn case, analysts say the rigorous manner of current trials being conducted and monitored, along with the diversity of treatment methods, can act as a buffer to one isolated, tragic incident becoming a roadblock for the industry.
Even though the U Penn trial raised concerns over gene therapy studies using adenoviral delivery systems, any postponements were temporary and not considered disruptive to the overall effort.
"The U Penn study raised concerns over patient saftey,." says Robert Consalvo, a Schering-Plough spokesperson, who stressed the importance of strictly following FDA-approved protocols and presenting concise data to ensure patient safety, which will eventually lead to new therapies for people with diseases for which there are currently not a lot of options.
Schering-Plough, with its Canji subsidiary, is conducting gene therapy studies on patients with liver cancer. Although different from the U Penn trial, both studies do involve treating a liver disease using an adenoviral vector delivered through the hepatic artery.
Because of similarities of treatment administration, the company's patient enrollment for the study was put on hold by FDA, but patients previously enrolled continued treatment. However, enrollment in the trial resumed on December 15, 1999 following precautionary review of data by the FDA.
At the time of the U Penn study, Schering-Plough revised its consent letter for its patients both in the gene therapy program and considering enrollment. Included in the revision was a notification of the U Penn trial death related to gene therapy. Although nobody enrolled dropped out of the trial, a few people interested in enrolling backed out during the height of media coverage.
Gene therapy offers many promising treatments, but this embryonic market may be faced with additional growing pains. As with many new therapeutic fields, science and responsible research will be crucial for product approval and commercial development "Gene therapy has the potential to revolutionize the treatment of diseases that currently are incurable or have inadequate treatments," said Jay Siegfel, director of the Office of Therapeutics Research and Review, Center for Biologics Evaluation and Research (CBER), in a statement given before a committee on public health in early February. The
Office of Therapeutics Research and Review is the office within FDA responsible for gene therapy regulation.
"The relative newness and complexity of the science of gene therapy presents considerable challenges in accomplishing product regulation," says Dr. Siegfel. "Whereas many biotechnology products consist of single purified proteins and antibodies, these novel therapies combine cells, tissues, and even organs with genetic alterations, novel device delivery systems and use of specialized growth factors." |
