Billions for gene therapy
Pharmaceutical companies invest billions of dollars in gene therapy
Igor Chernenkov, Finversia
According to a Reuters analysis, eleven drug manufacturers, led by Pfizer and Novartis, have committed about $2 billion in investments in the gene therapy industry since 2018 to better control the production of the world's most expensive drugs.
In a recent interview with the head of the company's gene therapy department, the full volume of Novartis' investment plan, amounting to $ 500 million, was announced to Reuters. According to public filings and interviews with other industry representatives, it is second only to Pfizer, which has allocated $600 million to build its own gene therapy plants.
Gene therapy is aimed at treating certain diseases by replacing the missing or mutated version of the gene found in the patient's cells with their healthy copies. Drug manufacturers claim that they are able to cure devastating diseases in a single procedure, and justify prices exceeding $1 million per patient.
But the treatments are also extremely complex, including growing live material, and yet pose a risk of serious side effects.
Pharmaceutical companies say building their own manufacturing plants is a response to the rising costs and delays associated with relying on third-party contractors who are also expanding their operations to capitalize on demand.
Pharmaceutical companies claim that owning their own industrial facilities helps protect patented production methods and more effectively solve any problems raised by the US Food and Drug Administration (FDA), which closely monitors production standards.
"Contract manufacturers have very little capacity and capacity for new gene therapy processes being developed by companies," said David Lennon, president of AveXis, Novartis' gene therapy division. "We need internal production capabilities in the long term."
Bob Smith, senior vice president of Pfizer's global gene therapy division, acknowledged that drug manufacturers take a "leap of faith" when they make large capital investments in new treatments before they are approved or, in some cases, even provide data demonstrating benefits.
Gene therapy is one of the hottest areas of drug research, and given the life-changing opportunities, the FDA is helping to accelerate the market entry of a new drug or treatment.
To date, the FDA has approved two of them, including the Novartis Zolgensma drug for a rare muscle disorder worth $2 million, and expects 40 new gene therapy drugs to enter the U.S. market by 2022.
Currently, about 30 drug manufacturers are developing several hundred drugs from hemophilia to Duchenne muscular dystrophy and sickle cell anemia.
The spread of these treatments expands the boundaries of existing production facilities in the industry. As the company's executives told Reuters, developers of gene therapy who need to outsource production have to wait about 18 months.
According to the developer of gene therapy RegenxBio, they are also charged a reservation fee, which amounts to millions of dollars, which is more than double the cost received a few years ago.
As a result, companies including Bluebird Bio, PTC Therapeutics and Krystal Biotech are also investing in the production of gene therapy, according to Reuters.
They follow Biomarin Pharmaceutical Inc, a developer of hemophilia gene therapy, which built one of the largest manufacturing plants in 2017.
The FDA closely monitors compliance with production and research standards in the gene therapy industry.
This happened against the background of the agency's disclosure in August that it was investigating alleged data manipulation committed by former heads of the Novartis – AveXis division.
AveXis has changed its method of measuring the activity of the drug Zolgensma in animal studies. According to the FDA and Novartis, when the results using the new method did not meet expectations, managers changed the data to hide them.
The scandal highlighted the importance of a consistent manufacturing process in the field of gene therapy, industry executives say.
According to some of them, the FDA at recent meetings emphasized the need for continuity of production processes all the way from drug development to its commercialization.
According to executives, drug manufacturers can avoid pitfalls, such as the need to move to a larger enterprise, if the capabilities of contract manufacturers are limited.
The FDA is expected to finalize the development of new guidelines for the production of gene therapy at the end of the year.
"The stability of the manufacturing process is always a major concern for the agency," FDA spokeswoman Stephanie Kakkomo told Reuters.
Underscoring the pressure on the industry, Sarepta Therapeutics, which mainly attracts third-party manufacturers to manufacture drugs, postponed clinical trials of its drug for the treatment of Duchenne myodystrophy in August, telling investors that it wants to avoid any questions from regulators regarding the sequence of production of its therapy on a commercial scale.
Krystal, which develops products for the treatment of rare skin diseases, has built one production facility and plans to invest more than $50 million in a new one, which it will begin building in December.
MeiraGTx, which specializes in gene therapy for eye diseases, estimates that it currently spends approximately $25 million a year on production, including the development process.
However, despite such steps, contract manufacturers such as Lonza and Thermo Fisher are confident that their business will continue to grow due to strong demand.
Thermo Fisher has told investors that its Brammer gene therapy unit, acquired in May, could soon generate revenue of $500 million a year, double the projected revenue in 2019.
Lonza CEO Mark Funk is also optimistic.
"The demand for gene therapy has increased," he told Reuters in an interview. "We believe that this will continue in the coming years."
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