Cell and gene therapies (CGTs) have finally come of age and are making a mark on the regulatory landscape. At the time of writing, the US Food and Administration (FDA) has approved 28 such products (excluding hospital-specific cord blood and scaffold products). 

With four more action dates potentially before the year’s end (Autolus’s obe-cel; Humacyte’s Acellular Tissue-Engineered Vessel; Abeona’s pz-cel; Rocket Pharma’s marne-cel), 2024 could see nine FDA-approved therapies, realizing the predictions made five years ago by former FDA commissioner Scott Gottlieb, who stated that there could be ten or more approvals per year by 2025. 

With his firm Dark Horse Consulting having supported most of these approvals and submissions, CEO Anthony Davies said at a bespoke summit in Milan, Italy earlier this month that the regulatory future is rosy. 

“We've been very pleased with the increasing quality of submissions,” he told delegates at the event run by contract development and manufacturing organization (CDMO) AGC Biologics, “and we're very pleased with the way that these submissions are being handled now [by the regulators].” 

(Not every) Tom, Dick, and Harry 

But while approval bottlenecks are widening, recent commercial launches have been “horrible,” Davies said, highlighting (or, rather, “picking on”) BioMarin’s rollout of the single-dose hemophilia A gene therapy Roctavian (valoctocogene roxaparvovec). 

Dark Horse's Anthony Davies spoke at the AGC Biologics CMO Summit in Milan, Italy

There are roughly 33,000 hemophilia patients in the US with about 20,000 of those living with hemophilia A. Roctavian uses the adeno-associated virus serotype 5 (AAV5) to transport functional Factor VIII genetic material, and with about half the population being seropositive to AAV5, there is – using cigarette-packet math – a pool of roughly 10,000 available patients. 

Yet while Roctavian received the FDA thumbs up in June 2023, in the first six months post-approval BioMarin treated just three patients: “Tom, Dick, and Harry,” Davies said glibly, before changing tone: “It hasn't gotten much better since then. To be honest, it's painful. We're not laughing here.” 

When contacted, BioMarin did not confirm that just three patients were treated in the first six months. However, it did tell us nine patients have received treatment as of its last quarterly earnings call on August 5, just over a year since US approval. This would imply a slight ramp up in the second quarter 2024 when three patients in the US and two in Italy were treated, generating $7 million in revenue. 

Pricing and COGS 

Roctavian’s list price of $2.9 million is an obvious factor to focus on. Davies and others have historically argued the need to reduce the cost of goods sold (COGS) to increase the commercial viability of CGTs (see here, here, and here).  

Significant platform improvements and technologies have helped increase efficiencies since the arrival of the first gene therapies, but these products are still difficult to produce cost-effectively compared to, say, a monoclonal antibody (mAb). Roctavian, said Davies, requires roughly 10 liters of cell culture to produce a single dose and while this is “not horrible” it is far off the multiple doses of Herceptin (trastuzumab) or Avastin (bevacizumab) that can be produced from a single liter.  

For gene therapies, “it’s a tough challenge to make the COGS work, but I don't think it's the whole story.” 

A cash flow problem, not a cash problem  

In fact, the high price is somewhat of a red herring in the overall narrative of the poor rollout. “Most of the price-point determination is clearly value based,” he said, comparing it with a conservative average lifetime healthcare cost for a hemophilia patient of upward of $20 million. “At a discounted price of $2 million, that's about a tenth of the lifetime care cost in the United States. Hemophilia A patients have almost a normal life expectancy at about 70, so Roctavian has to work for about seven years to break even.” It almost certainly works for four or five years, he continued, stating that it is very likely to work for a lot longer while also offering quality of life benefits.  

“I think that price is okay,” said Davies, but clearly the payers don’t. Referring to a recent article in Bloomberg by the journalist Gerry Smith, he said the immediate economic impact of these claims on smaller insurers is a major concern. “If you're a small insurer in Europe or America with maybe just 1,000 people in your plan, if you get two or three of these multi-million-dollar tabs in the same month, you can literally go under.”  

This was a concern among payers in the nascent days of CGTs when prostate-cancer therapy Provenge (sipuleucel-T) had a price of $93,000, and the mindset is yet to change. “A lot of these smaller insurers are writing gene therapies out of their plans; they're excluding these gene therapies specifically. Societally disturbing, but hard to blame them,” he said. 

“This is a cash flow problem, not a cash problem.” A paradigm shift in reimbursement thinking is clearly key to improving access, especially as Davies stressed biopharma cannot reduce prices. “Even at the current price levels, these would leave [CGT] companies far from break even in most cases, due to development costs, process development costs, clinical development costs, and manufacturing costs.” 

Heart not in it 

But what is apparent is BioMarin failed to fully prepare for launch.  

“They could have tested every single hemophiliac in the United States and in Europe, pro bono. What they needed to do is provide the test for free, which is a pin prick, and an Uber, and a cup of coffee, right? They could have had everyone's cell phone number in a patient directory by then, and on day one post-approval got on the phone to every single patient. They didn’t do it.” 

Furthermore, there were relatively few clinics prepared to handle and infuse the product, he added, and while the numbers are increasing, there remain logistical issues around patient administration. 

BioMarin has since adapted its strategy for Roctavian, announcing in a press release in August that it is restricting its launch to just three countries and placing manufacturing at its facility in Novato, California “in an idle state until such time when additional production is necessary.”  

The goal, according to the firm, is to relieve $60 million per year. “That's a really sad position,” said Davies. “If any of you know a pharmaceutical company with a good hematology franchise experienced in early-stage commercial products, you should advise them to give BioMarin call. Their heart is not in this product anymore, which is sad.” 

In a statement, BioMarin told us: “We continue to believe that Roctavian offers an important option for people with severe hemophilia A based on the medicine’s durable and sustained bleed control demonstrated following one-time treatment in more than 500 patient years of observation as demonstrated in our pivotal program.” 

The firm added: “We recently announced changes to our strategy to give Roctavian the time needed to reach its potential for patients and for BioMarin by focusing on the three markets where it is currently approved and reimbursed: the US, Germany, and Italy.” 

Beyond BioMarin 

This commercialization crisis goes beyond BioMarin and Roctavian.  

Vertex, which commercializes the sickle cell disease CRISPR-based gene-edited therapy Casgevy (exagamglogene autotemcel), reported in its second quarter that six months after approval none of the estimated 35,000 potential patient population in the US and Europe have been treated. However, the firm stated: “We continue to see a growing number of patients beginning the treatment journey” and “approximately 20 patients have already had cells collected.” 

Bluebird Bio also received approval for a sickle cell disease advanced therapy in December and similarly has seen a muted launch. The firm said in its second quarter results in August that no patients had so far been treated with Lyfgenia (lovotibeglogene autotemcel) though it has “recently completed the manufacturing and release testing for the first commercial Lyfgenia patient, and the first infusion is being scheduled.  

Bluebird, which has seen approval success with two other gene therapies Zynteglo (betibeglogene autotemcel), and Skysona (elivaldogene autotemcel), was also relatively upbeat about reimbursement for Lyfgenia (which has a list price of $3.1 million), telling investors it is “extremely encouraged by the speed which both commercial and government payers are approving pathways to patient access.”  

According to the firm, in the seven months since launch, half of sickle cell patients insured by Medicaid live in a state that has affirmed coverage to Lyfgenia, while multiple outcomes-based agreements with national commercial payers have been set up. “Additionally, timely access to Zynteglo and Skysona has continued with zero ultimate denials for either therapy across both Medicaid and commercial payers.” 

Thus moving forward, the opening up of payment pathways is a good sign for the future of CGT commercialization, as is reducing COGS. But beyond that, even the ever-perspicacious Davies was “genuinely open to suggestions” as to overcoming these hurdles. “These are all for rare or ultra-rare rare treatments. If we can't put it together for these, forget about it for blockbuster indications.”