According to Janet Lambert, CEO of the Alliance for Regenerative Medicine (ARM), in her delivery of the international advocacy group’s state of the industry briefing at Biotech Showcase in San Francisco, 2019 proved to be a significant year of growth for the regenerative medicine sector. From ARM’s analysis, there are now 987 companies worldwide actively involved in cell and gene therapy as well as tissue engineering, a total that has grown about 9% from the 903 firms that were operating in 2018.
Regionally, there was 5% annual growth in companies located in North America to 534, or approximately 54% of the global total, with 237 companies operating in Europe and Israel and 180 companies located in Asia, up about 30%, representing the fastest regional growth among the community of global companies, Lambert noted.
The growth of the sector is further reflected in heightened clinical development. The pipeline of regenerative medicine products is robust and continues to grow, with ARM identifying 1,066 ongoing clinical trials around the world. In terms of therapeutic focus, approximately 62% of the products being tested are targeting oncology indications, including rare forms of cancer, well ahead of the 5% of experimental therapies targeting CNS disorders and about 4% that are focusing on cardiovascular diseases.
Among those ongoing studies, 64% have advanced to the mid- and late stages of development, including 94 products in phase III testing, comprising 32 gene therapies, 15 gene-modified cell therapies, 30 cell therapies and 17 in tissue engineering, the ARM data found. In terms of technologies, 42% of the global trials involve gene-modified cell therapies and 33% are utilizing gene therapies.
It was also a significant year for product approvals, with Novartis AG gaining the FDA’s green light for Zolgensma (onasemnogene abeparvovec), for the treatment of all types of spinal muscular atrophy in children under 2 with biallelic mutations in the SMN1 gene, a little over a year after acquiring Avexis Inc. for $8.7 billion. The drug uses an AAV9 vector to deliver a functional SMN1 gene, which is mutated in SMA patients. The Basel, Switzerland-based company is charging $2.1 million for the treatment.
Cambridge, Mass.-based Bluebird Bio got a positive opinion from the EMA's Committee for Medicinal Products for Human Use for Zynteglo (lentiglobin) in late March followed by the European Commission signing off in June. Combining gene and cell therapy, Zynteglo involves taking stem cells from patients, transfecting them with a lentiviral vector to express a working copy of the beta-globin gene and putting the repaired cells back into the patient.
No shortage of financings
Although companies in the sector raised $9.8 billion in 2019 from financing transactions and corporate partnerships, the second highest, it fell 26% short of the record $13.4 billion that was generated in 2018.
Deal flow, however, was robust, with Lambert highlighting 33 partnership and public and private financing transactions that generated more than $100 million. Examples included Crispr Therapeutics AG, of Lug, Switzerland, grossing $274.1 million from a follow-on offering. The company was also involved in a deal with Boston-based Vertex Pharmaceuticals Inc., expanding their existing partnership to include Duchenne muscular dystrophy and myotonic dystrophy type 1 (DM1).
Vertex payed Crispr $175 million up front, with the deal having the potential to reach $1 billion, including development, regulatory and commercial milestones for the two programs. Crispr has the option, at the time of IND filing, to forego the milestones and royalties for the DM1 products and choose to co-develop and co-commercialize all DM1 products globally.
Vertex also paid $950 million to acquire Semma Therapeutics Inc. and bring on board a stem cell-based approach for generating insulin-producing pancreatic beta cells. Semma’s technology has demonstrated in animal models the ability to produce large quantities of functional human pancreatic beta cells encapsulated in a device that protects those cells from the immune system, restoring insulin secretion and ameliorating hypoglycemia.
Among the 13 private companies receiving more than $100 million in venture financing last year was Philadelphia-based Century Therapeutics Inc., which attracted a total of $250 million in a financing led by Leaps by Bayer, committing $215 million, with founding investor Versant Ventures and strategic partner Fujifilm Holdings Corp. also participating. The proceeds will enable the company to advance its genetically engineered immune effector cell therapies, derived from induced pluripotent stem cells (iPSC) from healthy adults. Multiple programs are currently in development to target hematologic and solid malignancies.
Century explains its technology is built on iPSCs that have unlimited self-renewing capacity. That enables multiple rounds of cellular engineering to produce master cell banks of modified cells that can be expanded and differentiated into immune effector cells to supply vast amounts of allogeneic, homogeneous therapeutic products.
Another deal of note involved Maze Therapeutics Inc., which secured $191 million in initial startup funding to work on genetic modifiers and their role in the severity of diseases. According to the company, genes situated elsewhere in a patient's DNA and not in proximity to a mutant disease-causing gene can impact the severity of disease and often provide a natural form of protection. By conducting large-scale genetic screens studying natural human genetic variation, the company hopes to uncover the genes that provide protection from disease and determine their mode of action and then translate that knowledge into new therapies.
Those deals helped push up the amount of venture capital raised by 32% year-over-year to $4.1 billion. It was certainly a bright spot, Lambert explained, since all other financing vehicles – corporate partnerships, follow-ons and IPOs – raised less than what was generated a year earlier.
The pace of M&As also slowed, although the number of deals still reflects the intense corporate interest in cell and gene therapy. The total deal value of M&A transactions reached $11.28 billion, 40% off the $18.94 billion in 2018, and almost 17% down from the $13.54 billion in 2017.
Headline deals in the year involved Astellas Pharma Inc. acquiring gene therapy specialist Audentes Therapeutics Inc., of San Francisco, for $60 per share in cash, representing an equity value of about $3 billion. The deal, which closed in January, brings on board lead candidate AT-132 for the treatment of X-linked myotubular myopathy, with a BLA submission slated for this year.
Roche Holding AG also completed its $4.8 billion acquisition of Spark Therapeutics Inc., which in 2018 gained FDA approval for its Luxturna (voretigene neparvovec-rzyl), a one-time gene therapy for individuals with an inherited retinal disease due to mutations in both copies of the RPE65 gene.