Amid Shire plc's second-quarter earnings, in which the Dublin-based firm posted encouraging full-year guidance associated with the recent close of its $32 billion buyout of Baxalta Inc., was the noteworthy disclosure that it plans to discontinue development of BAX 335, its most advanced factor IX gene therapy program for hemophilia B in favor of a next-generation candidate.

The reason was pretty straightforward. While BAX 335, delivered via an AVV8 vector, delivered "excellent" expression, "it was a little inconsistent between different patients and with time for some patients, the level of expression decreased," explained Phil Vickers, Shire's executive vice president and head of R&D, during the Tuesday earnings call with analysts. "And we think that's a very important thing to factor in when considering all gene therapies – is the expression going to down over time."

It is also what competitors and analysts are looking for in other ongoing trials. So far, Spark Therapeutics Inc.'s hemophilia B gene therapy, SPK-9001, is showing good signals. At the European Hematology Association meeting in Copenhagen, Denmark, earlier this year, the Philadelphia-based firm reported that a single dose of SPK-9001 – a 5 x 10^11 vector genome (vg) copies per kg of bodyweight – of its engineered, liver-tropic AAV vector resulted in factor IX (FIX) activity levels that ranged from 28 percent to 39 percent of normal, with data from one of the four patients reading out to 26 weeks. (See BioWorld Today, June 13, 2016.)

At the World Federation of Hemophilia meeting last month, Uniqure NV also posted positive data from its ongoing phase I/II trial testing gene therapy AMT-060, showing that patients in the low-dose cohort had sustained improvements in their disease phenotype and maintained durable levels of FIX gene activity – most of them in the range of 5 percent of normal – for up to 39 weeks following treatment. (See BioWorld Today, July 29, 2016.)

Prior to the acquisition by Shire, Baxalta observers had anticipated announcement of phase III trial plans in the near term. While shelving BAX 335 will leave Shire trailing the vanguard for gene therapy in hemophilia B, Vickers noted that "we think it's very important for the community out there . . . to bring forward the highest quality asset we think we possibly can in this space." He added that the move is in no way indicative of "any decrease in our commitment to the program."

And, despite the seemingly crowded space, analysts are predicting room in the market for more than one gene therapy. Leerink Research analyst Michael Schmidt, for example, wrote in an Aug. 2 research note on Uniqure that "we believe it is unlikely that one single gene therapy product will be used to treat all hemophilia B due to the product-specific limitations" such as neutralizing antibodies."

In an Aug. 1 industry note, Piper Jaffray analysts cautioned that despite early promising data, "durability and safety over a larger patient population will ultimately prove key. As well, defining who will respond may be important for honing in on the optimal treatment candidates."

That goes for gene therapy candidates targeting hemophilia A as well. Leading the pack in that indication appears to be Biomarin Pharmaceuticals Inc.'s BMN 270, which wowed at the recent World Federation for Hemophilia meeting. Data from an open-label phase I/II study showed the therapy bested expectations in terms of both efficacy, as measured by factor VIII expression and clinical improvements, and safety, as measured by alanine aminotransferase level. (See BioWorld Today, July 29, 2016.)

Shire also has a factor VIII gene therapy, gained from the Baxalta deal, which remains unaffected. Clinical studies are slated to start this year.

FACTOR SUBSTITUTION STILL 'CORNERSTONE'

Company management also took pains during the earnings call to emphasize the commercial hemophilia assets added in the Baxalta deal, namely Adynovate (antihemophilic factor [recombinant], pegylated), which was built around Baxalta's existing hemophilia A treatment, Advate, but offering a less frequent dosing schedule. Adynovate was approved in November. Estimates compiled by Cortellis Competitive Intelligence predict 2016 sales of Adynovate to be about $192 million, with sales growing to $600 million by 2021. (See BioWorld Today, Nov. 17, 2015.)

Adynovate goes up against Biogen Inc.'s Eloctate (antihemophilic factor [recombinant], fusion protein). Cortellis estimates that 2016 revenue to Biogen will be $497 million. The product is partnered with Swedish Orphan Biovitrum AB.

"I think one of the things we're keeping a close eye on is factor VIII market share in the U.S.," said Jeffrey Poulton, Shire's chief financial officer. "And I think that we'll see that fully stabilizing this year, and we think that has to do, at least partially, with the successful launch of Adynovate." He added that the product gained approval in April in Japan, which represents "another attractive market."

Shire is banking on those factor replacement products remaining an important part of the hemophilia treatment paradigm even if gene therapy or other non-factor products win approval. "We think that factor substitution . . . is still going to be the cornerstone," said CEO Flemming Ornskov, adding later that the company will remain "incredibly committed" to that cornerstone.

To that end, it will continue advancing a second extended half-life hemophilia A treatment, BAX 826, a recombinant factor VIII treatment that was developed using polysialic acid technology. Baxalta launched a phase I study in March, with enrollment of 30 patients in three dosing cohorts expected to be complete by the end of this year.

Besides gene therapy, other non-factor hemophilia products are moving into the space, including Roche Holding AG's bispecific antibody emicizumab in hemophilia A and an RNAi-based therapeutic, fitusiran, from Alnylam Pharmaceuticals Inc., which recently reported data from an ongoing phase I trial in hemophilia patients with inhibitors, along with hemophilia A and B patients.

Ornskov acknowledged the newly merged Shire's interest in non-factor products as well. While he declined to comment specifically on any of those plans during the earnings call, he said "Shire is participating in all of those aspects."

For much of the remainder of its merged pipeline – more than 40 programs currently in clinical development – company management did not go into detail. But Ornskov noted that the thorough pipeline review resulted in the discontinuation of eight programs in total, including BAX 335.

Overall, the second quarter was a solid one for Shire, which reported non-GAAP earnings per share (EPS) of $3.38, with revenue coming in at $2.43 billion. Street estimates had predicted EPS of $3.11 and revenue of $2.28 billion. The company also raised its cost synergy target for the Baxalta deal, expecting savings of $700 million within three years of closing the deal. The combined firm expects product full-year 2016 product sales in the range of $10.8 billion to $11 billion.

Next up for the company will be the U.S. launch for recently approved dry eye drug Xiidra (lifitegrast), becoming the first new drug for the indication since Allergan plc's Restasis (cyclosporine) was approved 14 years ago.

Calling it "probably the most significant advance we've made in our pipeline recently," Ornskov confirmed that the price would be similar to that of Restasis and said the launch strategy would focus on removing "any barriers for this product being prescribed and being available for the many patients that would like to see another option for dry eye disease."

Analysts are predicting blockbuster potential, though Jefferies' Peter Welford cautioned that the "initial trajectory may not be steep given heavy sampling and securing positions with payers."

Jefferies is forecasting 2016 sales of $20 million and 2017 sales of $152 million but noted physician surveys suggesting Xiidra sales could reach $1.5 billion to $1.7 billion in the U.S. after five years and hit $2.5 billion peak sales worldwide.