Partnering In Cell And Gene Therapy Is A Unique Endeavor

Industry and academic representatives shared viewpoints at Biotech Week Boston in September 2018, including what is unique about deal-making in the cell and gene field.

Partnerships in cell and gene therapy have grown dramatically over recent years, validating the investments that companies have made in foundational platforms and therapeutic programs. During 2012-2017, 271 alliances in this field were signed, together reaching an aggregate deal value of $30 billion. Nearly all big pharma players, and many mid pharma companies, have taken note and entered the market through key agreements.

Launches of current-generation gene therapies Kymriah (tisagenlecleucel; Novartis AG), Yescarta (axicabtagene ciloleucel; Kite Pharma Inc.), and Luxturna (voretigene neparvovec; Spark Therapeutics Inc.) within the last year have made this a commercially viable class of products. As a result, the therapeutic hypothesis that cell and gene therapies can lead to transformative medicines has been cleared, says Philip Gotwals, head, search & evaluation, business development & licensing, at Novartis Institutes for BioMedical Research Inc.

During several panels at Biotech Week Boston, including Cell & Gene Connect, Cell & Gene Therapy Bioprocessing & Commercialization, and BioPharm America, which took place between September 4-7, 2018 in Boston, Massachusetts, industry executives, representatives from academia, and other stakeholders reflected on cell and gene therapy partnering and the challenges of forming such collaborations – some of which are taking on new models. Often these attributes are similar to pharma business development in general, while some are unique to the field.

Big Pharma Companies Highlight Key Partner Attributes

From the big pharma perspective, there are many key considerations when looking for a cell and gene therapy partner. Knowing which companies have expertise in cell and gene therapy, and which of those can move programs to the clinic fastest, are the most important in identifying a strategic biotech partner in this area, says Eli Lilly & Co.’s Kathyrn McCabe, director of business development, emerging technology, and innovation. At the onset of the deal, discussion of gene therapy cost and patient affordability should be factored in. McCabe also stressed it was important to know what other agreements, namely in manufacturing, will need to be put in place down the road as well, exemplifying how complex cell and gene therapy deal-making can be.

Lilly has been slower to this market than other big pharma firms, but McCabe indicated that the company might be forging cell and gene therapy deals in a more active way over the next two-to-three years. She did highlight an April 2018 alliance with Sigilon Therapeutics Inc. (in which Lilly got exclusive worldwide rights to develop encapsulated islet cell therapies for type I diabetes), and also pointed out that Lilly has participated in indirect equity deals as a limited partner in the funds investing in cell and gene biotechs. The company has also made direct equity investments, such as being a member of the syndicate (through Lilly Asia Ventures) in T-cell therapy company Tmunity Therapeutics Inc.’s $135 million series A venture round in 2018 [See Deal].

Prior experience in a certain therapy area or market may strongly influence the choice of a cell and gene therapy partner or target. Pfizer Inc. has made some important strides in cell and gene therapy, namely putting a stake in rare neuromuscular diseases through the 2016 acquisition of Bamboo Therapeutics Inc. [See Deal], and by focusing on hemophilia A and B through alliances with Sangamo Therapeutics Inc. [See Deal] and Spark Therapeutics [See Deal], respectively. Rare disease has been a priority for Pfizer for 25-30 years, says Greg Di Russo, vice president, asset team lead at Pfizer. When evaluating a cell and gene therapy asset for a deal, Di Russo says it is important to leverage that knowledge.

Building A Strong Value Proposition

From the smaller cell and gene therapy company perspective, there can be many advantages to having a larger partner. It is imperative, though, to know what to do to attract such an investment. Voyager Therapeutics Inc., for instance, works on adeno-associated virus (AAV) vector gene therapies in neurological diseases, and has deals with AbbVie Inc. [See Deal] and Genzyme Corp. [See Deal]. According to Elisabeth Fine, Voyager’s director of medical affairs and operations, a larger partner is a big benefit given that development timelines in cell and gene therapy can be accelerated, and the time toward commercialization is now a lot shorter.

Having an experienced commercialization partner that can put proper resources behind marketing and sales is a plus. As of early September 2018, 21 therapies have been granted the FDA’s Regenerative Medicine Advanced Therapy (RMAT) designation, making them eligible for expedited regulatory pathways. Even without RMAT, cell and gene therapies qualify for traditional expedited pathways such as priority review, accelerated approval, fast track, and breakthrough therapy designation (recent approvals for Kymriah, Yescarta, and Luxturna were all done under expedited pathways). Taking advantage of a large pharma partner’s existing marketing and sales infrastructure is also a plus, according to Fine, given that building a value proposition for a cell or gene therapy is different than for other modalities. Leveraging a larger partner’s expertise in certain diseases is also a key advantage, says Fine.

Disease-Focused Organizations Are Important Partners Too

For both big pharma and biotech players in cell and gene therapy, having ties to disease foundations or patient organizations can provide many advantages. Fine says relationship-building with patient advocacy groups is important not only because patients trust these organizations most of all, but also because of educational needs. “Companies need to speak their language,” says Fine, and need to be able to talk with patients on a level they understand, especially in rare diseases affecting children.

What patients need and want may not always be understood through clinical endpoints, and patient organizations might help gene therapy developers in gathering real-world evidence, according to Mike Druckman, partner and chair, cell, tissue, and gene therapies team, Hogan Lovells.

New Models Could Play A Role In Deal-Making

Given the novelty of the cell and gene therapy modality, there will be a need for new partnering models, and one key example is the gene editing deal between Bayer AG and CRISPR Therapeutics AG, established in late 2015 [See Deal]. The companies teamed up to form a 50/50 joint venture to use the clustered regularly interspaced short palindromic repeats (CRISPR)/CRISPR-associated protein 9 (Cas9) technology in developing cures for hemophilia, blindness, and congenital heart disease. Bayer pledged $300 million in R&D funding to the joint venture, called Casebia Therapeutics, along with protein engineering capabilities.

According to Lawrence Klein, vice president of strategy and corporate development at CRISPR Therapeutics, the Bayer agreement is a great deal and multiplies the startup’s efforts in gene editing. From Bayer’s point of view, the creation of Casebia separates that work from the “mothership,” allowing development to proceed outside the bureaucracy of big pharma.

Klein says Casebia is an interesting case because of the intellectual property (IP) arrangements involved. The foundational CRISPR/Cas9 IP is licensed from CRISPR Therapeutics to Casebia. But a critical discussion point in these types of negotiations, especially with a joint venture structure, is the ownership of newly generated or improved IP. Bayer will hold rights in the three core areas of blood disorders, blindness, and congenital heart disease, while IP outside of those indications for human use will be owned by CRISPR Therapeutics (Bayer will be able to develop in non-human applications, such as in the agricultural area).

According to Klein, there are generally solutions that can be used to address IP issues like this in new deal models. Casebia has gone on to sign separate alliances with MaxCyte Inc., gaining a nonexclusive license to its Flow Electroporation gene modification technology [See Deal], and with Seattle Children's Research Institute, to study gene-edited regulatory T-cells for autoimmune diseases [See Deal].

Academic Institutions Will Be Important Manufacturing Partners

Another recent driver of new partnering models in cell and gene therapy is the push from the academic side, which has realized that it cannot move forward in the field on its own, says Abeona Therapeutics Inc.’s president and chief scientific officer, Timothy Miller. It is just this type of arrangement that led to the development and commercialization of Kymriah, which was advanced under a 2012 collaboration between Novartis and the University of Pennsylvania [See Deal].

According to Gotwals, the structure of their agreement felt much like a small biotech company made within the walls of an academic institution. Gotwals believes that it is easier to develop cell and gene therapies in an academic setting, and that this provides optimal access to patients.

Academic centers can also provide a unique advantage in manufacturing of cell and gene therapy. A time-consuming, expensive, and custom process, manufacturing in this market is just as important as the therapeutic itself, and the risk of having manufacturing demand exceed supply is real, as is the risk of investing in technology that may become obsolete in the near future. Many cell and gene therapy developers weigh the pros and cons of building out internal manufacturing capabilities, alongside outsourcing manufacturing with a contractor, with the consensus that there is not one perfect solution. Academia may be well suited to help in that capacity.

Historically, early-stage manufacturing (Phase I and II) has been done in academic labs, with later-stage manufacturing shifting to a contract manufacturer as the cell and gene therapy developer advances a therapy toward commercialization. But this model has shifted with expedited development pathways, and moves the importance of good manufacturing practice (GMP) to the academic setting, according to Linda Kelley, senior member, cell therapy facility director at H. Lee Moffitt Cancer Center & Research Institute, which has manufacturing partnerships with Intrexon and Iovance [See Deal].

Likewise, the Connell and O'Reilly Families Cell Manipulation Core Facility (CMCF) at Dana-Farber Cancer Institute serves as a contract manufacturer for small biotech companies, says administrative director Olive Sturtevant. According to Sturtevant, manufacturing rooms at CMCF are booked solid for the next two years, as gene therapy developers secure and store up manufacturing capacity.