The Chinese Gene Therapy Hotspot

If you’re into gene therapy, China’s the place to be. While this area remains, in the Western markets, a future promise (albeit one looking likelier to deliver than it ever has, as we reported in START-UP), in China’s it’s happening today. The only two firms with commercial gene therapy products are Chinese; both have had their drugs on the market for several years with, so far, no sinister effects—at least, none we’ve heard about.

Small wonder, then, perhaps, that Genzyme—one of the few larger players to have stuck doggedly with gene therapy where others fled—yesterday announced a tie-up with one of these Chinese pioneers, Sunway Biotech Co., to develop and commercialize Genzyme’s Phase II drug Ad2/HIF-1a, an engineered form of the HIF-1a gene designed to promote the growth of new blood vessels in patients with peripheral arterial disease.

Sunway will design, fund and run Phase I and Phase II trials in China in limb ischemia; the partners will share Phase III costs and eventual commercialization rights. There aren’t any disclosed financials, but it’s got to be good for privately-owned Sunway, which has been selling its own adenoviral-based head and neck cancer therapy H101 for two years. It gets Genzyme’s product manufacturing process (so that it can produce the drug in its Shanghai facility), a latish-stage CV product, and the kudos of a deal with an established Western player.

For Genzyme, the deal isn’t just about tapping the experience of a player who, for whatever reasons—let’s not get into Chinese regulatory standards--has been among the first to sell a gene therapy drug. It’s not just about getting a foot into the one market where Genzyme knows this particular drug has a fair chance of getting past the regulators.

No, this is about getting into China full stop. “Our work with Sunway represents one of many ways we hope to participate in the dynamic Chinese biotech industry and contribute to its growth,” confirms Genzyme EVP Duke Collier.

Now granted, for all the excitement over China, it’s not all good. US-based Introgen claims, for instance, that SiBiono, the other firm with a marketed gene therapy in China, copied its own lead candidate Advexin, which has been crawling towards US submission for the last few years. Gendicine, which uses an adenovirus to deliver the p53 tumor suppressor gene, does indeed look mighty similar to Advexin.

So sure, China’s not so hot on IP enforcement; the Asian dragon gave just a “diplomatic nod” towards patent rules when it the joined the WTO in 2001, according to one executive. And its bribery and corruption record isn’t squeaky clean either (whose is?); the fact that penalty includes the death sentence---a former top regulator was sentenced and executed earlier this year--doesn’t exactly make the picture any less sordid.

But the end market in China, comprising 1.3 billion people (and growing), is simply too big to miss out on—for gene therapy just like any other area of medicine. So is the prospect of a budding Chinese biotech industry. That’s why most Big Pharma have operations there—not just manufacturing or clinical trial centers, but increasingly, R&D. It's also why Genzyme wants in.

And in partnering with Sunway, Genzyme's taking in the early lesson from these forays: getting in with the locals. “If you don't have the right relationships [with locals] it's difficult to do anything," says Lee Babiss, head of pharma research at Roche. Roche claims the crown for establishing the first wholly-owned R&D center in China almost four years ago--an investment that, as well as giving it access to Chinese scientists, has brought Roche an influential 'in' with local lawyers, government officials and ministers in charge of steering the sector’s growth and upholding standards.

Tellingly, Introgen isn’t bothering to litigate against SiBiono (it has got enough on its plate); instead, “we’re in discussions with more mature pharmaceutical marketers in China,” says CEO David Nance. Expect more Chinese players to feature in our dealmaking databases, and not just in gene therapy deals.

Read More

The Next Big Thing...

... is gene therapy, according to London-based boutique investment bank Mulier Capital, which is raising a $500 million Ingeneous Fund to invest in late-stage, listed gene-therapy companies.

Are they mad?, you ask. Gene therapy? That area steeped in controversy, which elicits visceral public reaction like no other? That dirty word that promised the world, yet delivered nothing more than disappointments, SCID kids, and the tragic, overexposed story of Jesse Gelsinger?

Yes, that’s the one. Now granted, these days, gene-based medicine encompasses all kinds of DNA-based drugs, not just traditional integrative gene therapy; the Mulier group also include the ultra-hot yet earlier-stage gene silencing approach, RNA interference, in their definition. Still, they reckon, it’s all about to happen. “Gene-based medicine is now 8.5 months’ pregnant,” declares Mulier’s founder and CEO Pieter Mulier, previously head of sales at Nomura.

So in order to be in the right place at the birth of this next big thing, the Fund will pool a series of “significant” stakes (up to 28%) in what Mulier describes as the best third of gene-technology companies, thereby spreading risk across about ten Phase III programs and over 30 Phase I or II programs, in earlier clinical phases. Investors will have access to the expertise of the Fund’s advisory board, which includes George Poste (needs no introduction), James Rothman, Chief Scientific Advisor at GE Healthcare, and Max Talbott, a Big Pharma veteran who is now SVP worldwide commercial development and gene-therapy firm Introgen. Given the size of the stakes it plans to buy, Ingeneous will in theory have the negotiating power to achieve the right valuation when (and if) Big Pharma does come bursting in.

Now, there’s no doubt that significant progress has been made in gene-based medicine. Having solved many of the technological problems hampering the field (most notably around delivery vectors) and learnt from its mistakes, the field now boasts about 30 Phase III programs (including Introgen’s delayed p53 tumor suppressor therapy Advexin), over 200 in Phase II, and a somewhat more comfortable FDA. This year has seen gene therapy IPOs—like Holland’s Amsterdam Molecular Therapeutics, which went out at the top of its range in June—and Big Pharma deals, like Oxford BioMedica’s March tie-up with Sanofi-Aventis for Phase III renal cancer immunotherapy TroVax.

But the inherent complexity of gene-based medicine—delivery system, drug, target, breadth of effect, duration of action—and still unanswered commercial questions (can these kinds of therapy make money? Are they practical to administer?) mean not everyone’s calling this the next monoclonal antibody revolution. As we’ll discuss in a forthcoming feature in START-UP, plenty of Big Pharma are still steering well clear; others like Johnson & Johnson are dipping cautious toes in via corporate VC. They, and similarly tentative VCs, are anxious not to miss out completely just incase gene therapy does take off.

It’s this tantalizing ‘what if’ that Mulier is trying to exploit in pulling in its investors, a mix of institutions and high net worths that Mulier says have already made $300 million worth of ‘soft’ commitments. If the first gene-based medicine is approved in 2008, as optimists expect, then perhaps the sector’s value will explode. But if anything goes wrong—even just one SAE, for instance, as in the case of Targeted Genetics’ AAV-delivered inflammatory arthritis candidate, which the Recombinant DNA Advisory Committee is still pondering over)—then there’s a serious risk that investors will be left high and dry.

So gene therapy’s still a gamble. But IN VIVO Blog agrees with Mulier in believing the odds look better than ever before.

Read More