The growth of cell and gene therapies has been dramatic over the past 12 months, catalyzed by the FDA approval of three gene therapies last year. Since then the flood gates have opened and the field has attracted considerable attention from investors and industry alike.

We have witnessed during this period a veritable venture capital investment stampede to support private companies in the space. Already this year, according to BioWorld data, almost 40 percent of the more than $8 billion invested in private companies is going to cell and gene therapy-focused firms.

Last week, for example, Stevenage, U.K.-based Freeline Therapeutics Ltd. closed on an £88.4 million (US$116.5 million) series B round, which will support its clinical development of treatments for hemophilia B and Fabry disease, and to add other programs using its adeno-associated viral (AAV) vector to its product portfolio. The AAV vector technology uses human-adapted capsids and highly optimized expression cassettes, designed to deliver a functional copy of a therapeutic gene into the human liver, which the company said offers durable secretion of therapeutic proteins into the patient's blood.

The lion's share of the investment was provided by London-listed biotech investment firm Syncona Ltd., an evergreen fund that is making significant investments in cell and gene therapy startups. The balance came from UCL Technology Fund, the venture arm of University College London (UCL), where Freeline's technology originated. (See BioWorld, June 20, 2018.)

Freeline's investment represents one of nine investments this year that have been able to attract more than $100 million in the round.

Valuations soar

Public companies have also seen their coffers swell and share values soar this year. A dramatic example was the 59 percent jump this month in the share price of Cambridge, Mass.-based Sarepta Therapeutics Inc. (NASDAQ:SRPT). The seismic move was catalyzed by positive preliminary results from its phase I/IIa gene therapy trial assessing AAVrh74.MHCK7.micro-dystrophin in individuals with Duchenne muscular dystrophy (DMD).

Although the data were from just three children, they were well ahead of expectations. Evercore ISI's Josh Schimmer called the company's report "some of the most dramatic gene therapy results we've seen to date" in DMD, adding, "If results are sustained (and so far durability to 12 weeks is very encouraging), they appear poised to transform care of these patients." (See BioWorld, June 20, 2018.)

Sarepta has certainly been on a roll this year, and year-to-date its shares have gained a whopping 169 percent. That performance is one of the reasons the new BioWorld Gene Therapy index is up in value by 47 percent (14 percent so far in June). The growth demonstrates just how hot this sector is right now even in an uncertain and volatile capital market environment where the Dow Jones Industrial Average is underwater by 1 percent in 2018. (See BioWorld Gene Therapy Index, below.)

Group member Krystal Biotech Inc., a gene therapy company developing topical and intradermal off-the-shelf treatments for rare dermatological diseases, has also seen its shares (NASDAQ:KRYS) perform exceptionally well this year, recording a 39 percent increase in value.

The Pittsburgh-based company is relatively new to the public ranks, pricing an upsized IPO at $10 per share, raising gross proceeds of $45.5 million in September last year.

Krystal was recently granted FDA fast track designation for its lead product, KB-103, targeting the treatment of dystrophic epidermolysis bullosa (DEB), the first-ever topically applied herpes simplex virus (HSV-1)-based gene therapy engineered to deliver a human collagen protein to patients suffering from this serious and debilitating skin disease caused by mutations in the gene coding for type VII collagen, or COL7.

The company reported that a single-site phase I/II study of KB-103 is underway at Stanford University. The study is designed to evaluate the safety and tolerability of KB-103 using wound imaging, analysis of COL7 expression and anchoring fibril formation.

KB-103 is a product that has been engineered employing the firm's STAR-D platform, consisting of an engineered viral vector and skin-optimized gene transfer technology being employed to develop off-the-shelf treatments for dermatological diseases for which there are no effective treatments.

Rockville, Md.-based Regenxbio Inc. has also seen its shares (NASDAQ:RGNX) double in value year-to-date. The company is levering its NAV technology platform to develop gene therapy product candidates.

This month it was granted FDA fast track designation for lead product RGX-111, a one-time investigational treatment for mucopolysaccharidosis type I (MPS I), designed to deliver the human iduronidase (IDUA) gene directly to the central nervous system (CNS) using the NAV AAV9 vector.

The product will shortly enter a phase I dose-escalation study in children and adult subjects with MPS I. The aim of the study is to assess the safety and tolerability of RGX-111 at 24 weeks.

Welcoming markets

There has been a rush of cell and gene therapy companies to go public. They have taken advantage of a prevailing positive investor climate to graduate to the public ranks this year.

Gene therapy-focused Avrobio Inc., of Cambridge, Mass., was among the record five companies to complete IPO's during a 24-hour period last week. It raised almost $100 million from an offering of 5.25 million shares priced at $19, well exceeding its original plan to offer 4.4 million shares priced in the range of $16 to $18. The company has also granted underwriters a 30-day option to purchase up to approximately 787,000 additional shares, potentially adding another $15 million for the company. (See BioWorld, June 22, 2018.)

The Cambridge, Mass.-based company, formed in 2015, is using a lentiviral-based ex-vivo gene therapy platform in-licensed from Toronto's University Health Network.

It completed a $60 million series B financing in February and is advancing lead gene therapy candidate AVR-RD-01 in phase I testing for Fabry disease. Other gene therapy candidates targeting cystinosis and Gaucher disease are next in line. (See BioWorld, Feb. 2, 2018.)

In patients with Fabry disease, CD34-positive stem cells are extracted and isolated. The cells are then transduced with lentiviral vector carrying a normal GLA gene to create AVR-RD-01 gene therapy, a process that the company said has been streamlined down to just three days. AVR-RD-01 is then infused back into the patient on an out-patient basis, with the goal of restoring normal GLA gene expression so that alpha-gal A enzyme is produced by the patient's own body.

Eidos Therapeutics Inc. priced a day earlier than Avrobio. The San Francisco-based firm priced 6.25 million shares at $17 each. In addition, Eidos has granted the underwriters a 30-day option to purchase up to an additional 937,500 shares of common stock at the IPO price.

The company is developing an oral therapy to treat transthyretin (TTR) amyloidosis (ATTR), and in May dosed the first patient in a phase II trial of AG-10 in patients with ATTR cardiomyopathy that will eventually enroll approximately 45 patients, with top-line results scheduled for the end of the year. Eidos said it expects to launch a second phase II trial in patients with ATTR polyneuropathy later this year.

Also this month, shares (NASDAQ:MGTX) of London-based gene therapy company Meiragtx Holdings plc began trading. It closed its IPO of 5 million ordinary shares at $15 each.

The FDA has granted fast track designation for its AAV-RPGR for the treatment of X-linked retinitis pigmentosa (XLRP) due to defects in the retinitis pigmentosa GTPase regulator (RPGR) gene. The company is currently conducting a phase I/II trial for the product in adult and pediatric patients diagnosed with XLRP caused by mutations in the eye-specific form of the RPGR gene called RPGR open reading frame 15 (RPGR-ORF 15).

The eight companies in this space that have graduated to the public ranks so far this year have raised a collective $890 million, and the average share price appreciation among that group is 40 percent. (See Public cell and gene therapy companies 2018, right.)

Immuno-oncology company Armo Biosciences Inc. has seen its shares soar almost 200 percent on the strength of its pending acquisition by Eli Lilly and Co. for about $1.6 billion, in an all-cash transaction.

The company's lead product candidate is AM-0010, a long acting form of human interleukin-10 that is in phase III testing for the treatment of pancreatic ductal adenocarcinoma.

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