By Jennifer Henderson
For one out of every 3,500 male babies born, there’s a debilitating disease lurking known as DMD.
DMD – or Duchenne Muscular Dystrophy – is a rare genetic disease that primarily affects boys. Its symptoms usually emerge in children between the ages of just 3 and 5 and include progressive muscle degeneration across the body as well as the heart and respiratory system.
But Pfizer has DMD on its radar, and the pharmaceutical giant is building a new weapon to attack it – a gene therapy out of North Carolina.
Earlier this year, the New York-based company made a critical step in its gene therapy program, less than two years after its acquisition of Bamboo Therapeutics of Chapel Hill in a deal worth up to $645 million.
Bob Smith, Pfizer’s senior vice president and leader of the company’s gene therapy business, says the company has initiated its “first new clinical trial from the Bamboo acquisition.” The trial is for a gene therapy candidate that could slow, or even stop, DMD.
“We’re really hopeful this will prove to be a transformational new therapy for boys suffering from the disease,” Smith says.
The U.S. Food and Drug Administration is watching closely as the new gene therapy technologies take root. According to the FDA, gene therapy is where scientists “replace a gene that causes a medical problem with one that doesn’t, add genes to help the body to fight or treat disease, or turn off genes that are causing problems.”
While there are less than a handful of gene therapy products approved by the FDA, it’s a potentially lucrative and life-changing market. Allied Market Research says the global gene therapy market could surge from roughly $600 million now to more than $4.4 billion in just five years.
With Bamboo Therapeutics – founded by Jude Samulski out of UNC-Chapel Hill in 2014 – leading the way, there are roughly 20 players now in North Carolina, targeting the likes of cancer, metabolic disorders and ALS, or Lou Gehrig’s Disease. They’re coming from both Triangle universities as well as from out of state and have the potential to bring tax and economic development benefits as a defined North Carolina-based cluster develops.
Even with challenges such as bringing payers on board and the high cost of manufacturing, there is a great opportunity for North Carolina, says Kate Holt, senior director of investments at the North Carolina Biotechnology Center.
That opportunity doesn’t only consist of the creation of jobs, she says, but also a tax base for the state and a new area of expertise in which “to shine” and become a “global leader.”
“It’s a great goal,” she says, “and it’s a worthy goal.”
Sprouting from universities
Smith says Pfizer started investing in the gene therapy space about four years ago.
Since that time, academic work out of North Carolina and continued development of Pfizer’s gene therapy program in the state have remained of critical importance.
“We had a view that this was an area of science that could translate into the potential for transformational medicines for patients,” Smith says, “with a particular focus on rare diseases.”
The approach, he says, was to “build, buy, partner.”
Smith points to Samulski as a “leading academic investigator in the space.” Soon after Samulski founded Bamboo he reached out to Pfizer.
Ultimately, Pfizer invested $45 million in Bamboo’s Series A funding round, and the agreement included “an option to acquire the company at a subsequent date,” says Smith, “assuming certain milestones were met.
Aug. 1 marked the two-year anniversary of Pfizer’s acquisition of Bamboo, with clinical work now underway.
“Since we completed the acquisition … we’ve significantly expanded on manufacturing capabilities,” Smith says. That includes a $100 million, 40-job gene therapy manufacturing expansion in Sanford announced last year.
“We feel really good about the prospects of the [Bamboo] acquisition, the way that it has been managed in the two years since we completed it, and the promising pipeline of candidates based on technology programs,” he says.
Judith Cone, vice chancellor for innovation, entrepreneurship and economic development at UNC, calls Pfizer’s continued investment in the region a signal.
“They would not put their plant here if they weren’t also trying to be close to the science,” she says.
Much of that science – as in the case of Bamboo – is coming out of the area’s universities.
Bill Bullock, senior vice president of economic development and statewide operations at NCBiotech notes that, “$1 of every $9 in NIH rare disease research funding flows through North Carolina.”
Universities across the state, including UNC, Duke, N.C. State, Wake Forest and East Carolina, are all attracting that funding.
“We have a longstanding commitment to that field from our research institutions,” including UNC’s gene therapy center and the work of Samulski and his colleagues as well as Duke’s enhanced efforts in the space, says Clay Thorp, a partner at Hatteras Venture Partners, which has invested in the gene therapy space.
Spinoffs from universities have grown, he says, and Pfizer’s manufacturing base “is a big win for the area.”
UNC started its Gene Therapy Center in 1993 and emerged as a pioneer in a type of gene therapy known as adeno-associated virus (AAV) viral vector therapy, notes Kelly Parsons, associate director of technology commercialization.
Along with Pfizer Bamboo, other companies attempting to move research out of UNC and into the clinic include the likes of Couragen Biopharmaceutics of Research Triangle Park and StrideBio of Durham.
This summer, StrideBio said it had banked $15.7 million in its Series A round led by locally based Hatteras Venture Partners. The funding closely followed a collaboration agreement with Switzerland’s Crispr Therapeutics and Casebia Therapeutics – a joint venture between Crispr and Bayer AG.
StrideBio was founded in 2015 out of technology from the labs of Aravind Asokan at UNC-Chapel Hill and Mavis Agbandje-McKenna at the University of Florida. Asokan – also among the scientific co-founding team at Bamboo – joined the Duke’s School of Medicine earlier this year as the new director of gene therapy in its Division of Surgical Sciences.
There continues to be an academic expertise in the area when it comes to the gene therapy space, says Richard Smith, chief operating officer at StrideBio.
Locus Biosciences was formed in 2015 out of research work at the N.C. State. The company – focused on developing technologies to fight bacterial infections that resist antibiotics – has since attracted major investment dollars. That includes about $24 million over the course of last year from the likes of Chinese tech titan Tencent and West Coast-based Artis Ventures.
Increasingly, says StrideBio’s Smith, there is “money coming in from companies who are looking to get into gene therapy.”
Gene therapy company AveXis recently celebrated the “wall breaking” of its new Durham facility, where the Illinois company expects to bring 200 manufacturing jobs to the Triangle with an annual payroll rising to more than $20 million.
AveXis is receiving state and local incentives for the Durham expansion, which is expected to grow the state’s economy by just shy of $920 million, according to Gov. Roy Cooper’s office. A state Job Development Investment Grant is slated to provide up to about $2.2 million in reimbursement to AveXis over 12 years.
In 2015, AveXis acquired gene therapy technology from Asklepios BioPharmaceutical of Chapel Hill. In shifting to the Triangle, Andrew Knudten, senior vice president of technical operations and chief technical officer of AveXis, says, “We certainly did consider expanding operations in the Chicago area as well, but there’s a rich history in the Raleigh-Durham area around biologics production.”
AveXis – acquired by Novartis for $8.7 billion – is developing treatments for Spinal Muscular Atrophy (SMA), a leading genetic cause of infant mortality, as well as for Rett Syndrome – an autism spectrum disorder. The company is also targeting ALS.
A primary goal for the company, Knudten says, was “additional manufacturing capacity that geographically diversified our operations.”
Knudten says, “An already well-established biotech hub, the further development of this cluster will continue to draw highly specialized talent to the area.”
“There are a number of similarities between biologics manufacturing and gene therapy manufacturing,” he says, adding, “We plan to continue to leverage the strengths of that common expertise.”
While AveXis plans to submit a biologics license application to the FDA for its lead gene therapy candidate for the treatment of SMA in the third quarter, the company isn’t the only out-of-state entrant to North Carolina’s gene therapy cluster recently.
Last year, Bluebird Bio of Cambridge, Massachusetts, said it would fly south to Durham for its third U.S. site.
Bluebird went public in 2013, raising about $116 million, and trades on the Nasdaq exchange.
Derek Adams, chief technology and manufacturing officer, says the company expects to expand to about 50 people in Durham over the next couple of years.
For its Triangle expansion, Bluebird – which is developing a pipeline of gene therapy products for the treatment of genetic diseases and cancer – acquired the roughly 125,000-square-foot manufacturing site at 1733 T.W. Alexander Drive for about $11.4 million, according to Durham County deed records.
“As part of our manufacturing strategy we’ve been working on executing over the last year or so, we decided that we need both internal manufacturing efforts and external partnerships,” Adams says.
Along with North Carolina, Bluebird considered Massachusetts and Maryland and foreign locations for its new facility. But Durham provided a significant talent pool, convenient access to the company’s headquarters in Cambridge and a facility that fits with the company’s timeline.
Also, research talent from local universities and a rising gene therapy community contributed to Bluebird’s selection of Durham, the company says. Financial support from NCBiotech includes up to $100,000 for job creation milestones.
To date, the FDA has approved just three gene therapies – and all came last year.
The latest was awarded to Spark Therapeutics in Philadelphia for the treatment of inherited vision loss.
“I believe gene therapy will become a mainstay in treating, and maybe curing, many of our most devastating and intractable illnesses,” said FDA Commissioner Scott Gottlieb in a statement at the time of the approval, adding, “We’re at a turning point when it comes to this novel form of therapy and at the FDA, we’re focused on establishing the right policy framework to capitalize on this scientific opening.”
The FDA followed through on those remarks by issuing new guidance, but there are still significant challenges.
Hatteras’ Thorp says North Carolina is a “top-tier location” when it comes to gene therapy, competing with Boston and San Francisco.
While North Carolina has kept pace in terms of manufacturing, there is more investment needed. Thorp says companies “normally think about manufacturing later.” But with the complexities of gene therapy, he says, “that has to be thought of sooner.”
“Traditional pharmaceutical manufacturing grew into biologics manufacturing, which grew more and more complex,” says NCBiotech’s Bullock. “At each inflection point, North Carolina kept pace with advances in science, manufacturing, supporting services and talent.”
“Now,” says Bullock, “when gene and cell therapies are the cutting edge of medicine, North Carolina’s foundation is again ready to propel these therapies toward market. This happened because of three decades of attention to building research infrastructure, putting the right programs in place to train talent, and nurturing technologies on their winding path to market.”
Hatteras recently led StrideBio’s Series A round, and StrideBio plans to complete “clinical manufacturing internally,” says Thorp. “We’ve hired the right talent for it.”
Gene therapy companies need to do this type of manufacturing “in areas where you can scale it, and North Carolina is definitely one of those areas,” he adds.
There’s also the challenge of bringing payers on board, says Holt of NCBiotech. She says, “The health insurance industry and pharma companies are coming to the table around performance-based payments.”
One example may include negotiating for reimbursement when it comes to patients’ responses to gene therapies, according to Holt.
As the technologies mature, international competition is expected to be strong.
“North America is the highest contributor in the gene therapy market in 2016; however, Asia-Pacific is expected to witness the highest growth rate during the forecast period,” states the February report from Allied Market Research.
But whether large or small, the players in North Carolina’s gene therapy space are optimistic.
Pfizer’s Smith says the goal is to create therapies that can be commercialized – and transformational – for patients.
“We’re hoping that the infrastructure and expertise that we built – in large part in North Carolina – is going to enable us to do that.”