Gene therapy: the challenge and the opportunity
Gene therapy is an experimental and therapeutic technique involving the engineering of genes with the hope to cure disease at its root cause. This has become an increasingly buoyant area for investment and although still at an early phase of development, there have been recent approvals of clinical and commercial gene therapies for use in humans.
Genetic engineering is not new to scientific research. The first artificial genetic modification was back in 1972 when H. Boyer and S. Cohen introduced a bacteria gene into an organism to produce protein. This eventually led to the first ever insulin being synthesised from genetically modified bacteria. This was the basis of protein therapeutics, which are now common-place therapeutics.
After nearly five decades of evolution, not only are genetic modification techniques widely used in laboratory research, they are brought into clinical therapies. To-date, six gene therapies have been approved by the FDA. These therapies either correct a defective gene (usually a single point mutation) or potentiate natural immune responses to fight against diseases. Although, inevitably, there will always be a debate around ethical issues, gene therapies have unlocked a whole new era in medicine.
Gene therapies fall into three categories:
- Gene augmentation
- Gene suppression
- Gene editing
Practices in the first two categories will not change the DNA sequence of a target gene – only restore or suppress the original function. Gene editing tools on the other hand, will ultimately change the sequence, thus producing a new gene. Currently, all gene editing tools are still at the clinical stage and not in practice.
Gene augmentation is used to correct a mutated gene. A normal copy of the mutated gene can be delivered using integrating vectors. The goal of the delivery is a long-term expression of the transferred gene at levels high enough to be therapeutic. The most commonly used vectors are lentiviral vector and adeno-associated viral (AAV) vector. Lentiviral vectors target stem cells that will undergo cell division, so that the gene delivered can be passed onto daughter cells. The vectors are efficient in integrating a genome into the target cells. However, they can be pathogenic and cause immune responses. AAV vectors target postmitotic cell types. These vectors have a poor genome integration feature, but the main advantage is safety; the vectors elicit few inflammatory responses and are non-pathogenic.
Gene suppression is another type of gene therapy. As the name suggests, target genes are “silenced” by employing an inhibitory sequence, such as miRNA or shRNA.
Gene editing compared to the previous types, has a shorter history but has attracted greater attention in recent years. This is because gene editing has an incomparable advantage – its precision. Gene augmentation and gene suppression often lead to off-target effects. However, gene editing, especially the later generations of editing techniques, can precisely “rewrite a sequence as defined” (David R. Liu, Harvard University). These gene editing techniques are guided by a short sequence to locate the target point, cut out the undesired portion, and attach back the desired portion. CRISPR is one of these techniques.
It is worth mentioning that CAR-T therapies, which are often confused with CRISPR, is strictly speaking, not a gene therapy. CAR-T are engineered human immune cells (T cells). These are engineered with genetic modification tools, usually lentiviral vectors and AAV vectors. These vectors help to augment a particular protein on T cells so that T cells are potentiated. Recently, CRISPR was also used to engineer CAR-T, which generates long-lasting potentiating effects.
Broadly speaking, there are three types of companies in this field:
established pharmaceutical companies that have both R&D and an in-house manufacturing supply chain
biotech and start-ups that develop innovative therapeutics
CDMOs that streamline the manufacturing of clinical and commercial volume gene therapy materials
In the past few years, there has been a growing wave of transactions happening across the space.
THE CHALLENGE AND THE OPPORTUNITY
While technologies are quickly advancing, one of the challenges for gene therapy is the manufacturing capability. There are at least two essential elements that need to be manufactured in gene therapy: the viral vector and the gene.
Viral vectors are manufactured from cell line expansion. However, the batch-to-batch variability impacts the quality of the vectors significantly – vectors might even become oncogenic in severe cases. To work around this issue, some companies manage to enable vector free gene delivery. One example is Indee Labs, founded in 2015 and based in San Francisco, the company employs microfluidic vortex shedding to deliver a target gene without any vectors. Products are still at “proof of concept” stage. Indee Labs has obtained VC investments totalling $5m from the Founders Fund, YCombinator, and Financial Services Pty.
The target gene is another key material. Plasmid DNA is manufactured from bacteria fermentation. The plasmid DNA will then be transiently transfected into the viral vector. Transfection efficiency is a bottleneck in the process. Current optimisation focuses on reducing the amount of plasmid DNA required and strict quality control of cGMP grade plasmid. An innovative approach to improve transfection efficiency is through micro-electro-mechanical systems. Mekonos, a US start-up developed the system that allows for controlled transfection. Mekonos has attracted investors such as Novartis.
In the manufacturing capacity space, there have been a few major buyouts since 2019. Catalent acquired Paragon for $1.2 bn. This transaction not only integrated Paragon’s commercial-scale manufacturing facility near Baltimore, but also its CAR-T manufacturing capabilities. Comparable to this, Catalent’s competitor – Thermo Fisher – acquired Brammer Bio for $1.7 bn. Brammer Bio is a larger scale manufacturer comparing to Paragon. It is also a comprehensive cGMP manufacturer for viral vectors.
These innovative technologies and the high value transactions point to a scarcity of both manufacturing capacity as well as appropriate manufacturing expertise. The development of therapeutics and the infrastructure to manufacture these drugs is currently in short supply and the focus of VC and PE investment.