Investment themes

Gene therapies

Gene therapies aim to provide a permanent cure rather than just managing a disease. Specifically, the goal is to fix an inherited genetic defect. The trigger of disease is an error in the genetic information that may for instance cause a certain protein to be non-functioning. Treatments such as enzyme replacement therapy remedy this deficiency. Certain virus types such as adeno-associated viruses or retroviruses act as messengers by inserting the desired gene into the cell so that the information is read and implemented.

In conventional gene therapies, a gene is inserted either episomally (not integrating in the genome) or randomly into the genome. In gene editing, the patient’s genome is cut at precisely the right location and corrected or embellished. A variety of «gene scissors» (endonucleases) are used for this purpose, including CRISPR, zinc finger nucleases, meganucleases and TALEN (transcription activator-like effector nuclease). An advantage of this approach is that integration of the genetic material means that only one treatment would be required for a potential cure, so a treatment’s long-term sustainability or tolerability would not be an issue.

After decades of research, a variety of gene therapy approaches have made it to market. CAR-T-cell therapies make use of the fact that our bodies are trained to automatically attack pathogens or cancer cells. The basic aim of this approach is the genetic reprogramming of T-cells. T-cells are taken from the patient, equipped with the gene for a specific artificial (chimeric) receptor in a laboratory and then replicated. These new CAR-T-cells are then infused back into the patient, where they track down the defined antigens on cancer cells and initiate their destruction.

Medical experts believe that the new gene therapy approaches will be useful in treating a growing number of diseases. Since tumor growth often has genetic causes, approximately two-thirds of all gene therapies are being tested for use in cancer medicine, according to recent estimates of the Journal of Gene Medicine. Other therapeutic areas are monogenic disorders caused by a single gene defect (>11%), infectious diseases (>5%), cardiovascular diseases (>5%) and neurological disorders (>1%). Many inherited diseases have a prevalence of 1 000 to 10 000 patients. Three gene therapies are currently approved in the USA and four in the EU. Approximately 2 800 such therapies are undergoing clinical trials worldwide. More than half of these candidates are in the first phase of clinical development, with only a few being tested in pivotal regulatory studies. The time-consuming and costly treatment process, which generally involves prolonged hospitalization, and the small patient population have their price. As an example, treatment with Luxturna, which transfers a functioning version of the RPE65 gene into the retina, comes with a price tag of USD 825 000 per patient per year.

Pioneers in the field of CAR-T therapy include our former portfolio investments Juno Therapeutics (2017 acquired by Gilead) and Kite Pharma (2018 acquired by Celgene). Kite received US regulatory approval for its Yescarta product in 2017 and EU approval in 2018. While T-cells are engineered in these CAR-T therapies ex vivo, in vivo gene therapies are delivered directly by the intravenous or intrathecal route. BB Biotech opened a position in Avexis, an in vivo gene therapy company, in September 2016 that yielded a handsome return. The US company, which is working on a gene therapy to permanently cure spinal muscular atrophy, was acquired by Novartis in April 2018.

RNA therapies

While most drugs so far are designed to block certain proteins that cause disease, RNA therapies intervene at an earlier stage. They target human DNA in the nucleus where enzymes produce these proteins, either by blocking the production of these proteins or by promoting gene expression. The substances thus developed can be tailored specifically for use in many therapeutic indications, ranging from metabolic disorders and rare genetic diseases to cancer, infectious diseases and neurological disorders.

Antisense, RNAi and small interfering RNA (siRNA) technologies have become established as genetic engineering techniques in drug development. They all work by blocking certain steps in the transfer and coding of genetic information. The antisense approach acts on the expression of certain genes that trigger disease in one of two ways: either by blocking gene expression, or by promoting gene expression through interference with the splicing apparatus that joins the substances to make fully-fledged mRNA. Our core holding Ionis Pharmaceuticals is a world leader in this technology with more than 30 candidates in its proprietary development pipeline.

siRNA technology is used to block the synthesis of certain proteins that trigger the onset of certain diseases. By contrast, substances based on the mRNA approach work by introducing a messenger RNA from outside to make specific proteins. 2018 was a very exciting year for the RNA specialists in BB Biotech’s portfolio. Akcea is an antisense specialist and its Tegsedi therapeutic was approved late in the year by the US FDA for hATTR, an inherited rare disease. Akcea is a spinoff of Ionis Pharmaceuticals and focused on developing antisense therapies for rare lipid disorders. The market capitalization of Akcea doubled during the course of 2018.

Alnylam received regulatory approval for Onpattro, the first drug ever to be developed using RNAi technology. Alnylam has more products in late-stage clinical trials, Fitusiran, for example, with which it is taking a completely new approach in the treatment of hemophilia and rare bleeding disorders. In addition, Alnylam is collaborating with The Medicines Company to develop a cholesterol- lowering drug.

Wave Life Sciences, which has been publicly traded since the end of 2015, presented initial clinical data in December for its most advanced product candidate, which targets Huntington’s disease, an inherited progressive brain disorder. The company is investigating a proprietary stereochemistry technology that enables the precise three-dimensional arrangement of molecular structures so to modify their chemical and pharmacologic properties. Moderna Therapeutics is a pioneer in the new class of mRNA therapeutics. This US company raised USD 606 mn through its IPO on December 6, 2018, making it the largest IPO in the history of the biotech industry. However, the ten vaccines in Moderna’s pipeline targeting various indications are still in very early stages of development.

Neurological diseases

Neurological diseases span a broad spectrum of brain and peripheral nervous system dysfunction, including conditions such as Alzheimer’s, Parkinson’s, depression, migraine and multiple sclerosis. Rapid aging of the global population poses growing challenges to healthcare systems. On top of the increasing cost of medicines, the cost of residential care adds to the burden. The demand for new therapies that modify disease outcome instead of just relieving symptoms is all the more urgent.

New drugs to treat conditions such as depression, schizophrenia and Alzheimer’s commonly require clinical trial programs involving large patient populations. These medical areas continue to be the domain of primarily large pharma and biotech firms because of the associated high costs. Exceptions include two BB Biotech portfolio companies. Intra-Cellular Therapeutics owns lumateperone, an investigational medicinal product that has successfully completed two Phase III trials for the treatment of schizophrenia. The substance is novel in being able to simultaneously target multiple pathways for neurotransmitters like serotonin and dopamine. The target action date for a decision by the relevant FDA panel on approval of the drug in this therapeutic indication is September 2019. Voyager Therapeutics develops gene therapies, one of which is VY-AADC, an agent to treat Parkinson’s. It works by promoting the synthesis of an enzyme designed to promote the production of an important neurotransmitter, dopamine, in the brains of patients with advanced disease.

A migraine drug developed by Alder Biopharmaceuticals is in the final preapproval stage. The antibody eptinezumab is the only drug from the class of CGRP inhibitors that involves just four infusions a year. Alder plans to file a new drug application for approval in the US in the first quarter of 2019. Sage Therapeutics made for another highlight in 2018 with its drug Zulresso for the management of postpartum depression. Up to 20% of mothers experience this psychological disorder to a greater or lesser degree. It occurs immediately after childbirth and is attributable to hormonal changes. The agent stands out from all the other treatments available through its combination of rapid efficacy and good tolerability. The FDA’s decision on approval of the injectable version is expected by March 2019. In January, the company also presented good data from its study of SAGE-217 in postpartum depression. SAGE-217 is a next-generation product for oral use.

Neurological diseases increase in frequency with age and are the most common cause of work disability. In the United States alone, neurological diseases affect one-quarter of the population and cost the country an estimated USD 800 billion a year. Approximately 15% of people in the world today can expect to experience neurological injury of one kind or another during their lifetime. The biopharmaceutical industry is correspondingly keen in its efforts to develop new forms of treatment. 537 agents for the treatment of neurological disorders were under clinical development in 2018, according to surveys by PhRMA, the trade group representing the pharmaceutical industry in the US. That is the third highest number after cancer (1 120) and rare diseases (566). The growing costs of health care for neurological and other diseases were the major impetus for the implementation of the Affordable Care Act, but it is not clear the proposed measures of this program will be sufficient to meet the daunting fiscal challenges of the near future. Given the extraordinary and rapidly growing costs of neurological disorders themselves, a concrete strategy is urgently needed to reduce the burden of neurological disease.