The field of Gene Therapy has made some significant strides in 2023, and the result has been the introduction of truly novel therapeutic options for patients who desperately needed them. These advancements are in spite of a down year for the industry overall, and are the culmination of long, arduous research and development journeys. Our consultants in this field tell us that this recent string of approvals marks a turning point for therapies that have their share of risk and controversy surrounding them, as well as signals a potential upswing in the biotech market sector overall. We can’t help but see it as a positive for businesses, investors, and most importantly, for patients.

At Conjugate Group, we supply the expertise of consultants who have worked in this space for decades, in the functions responsible for planning and executing clinical trials. They all say that Gene Therapy is two things – the future of treatment, and a considerable risk. This year showed both sides of that coin, but the net result has been a big win for providers, advocacy groups and investors. How well the current slate of Gene Therapy products perform in the market will largely determine how much focus is put on development in the future.

2023 alone has seen the US approval of three major gene therapy products – Krystal Biotech’s Vyjuvek™, Sarepta Therapeutics’ Elevidys™, and BioMarin’s Roctavian™. Elevidys™ was granted accelerated approval and is undergoing confirmatory studies, while Vyjuvek™ and Roctavian™ have been granted full approval. In a year when FDA approvals have been delayed and harder to achieve in general, this is positive news for a sector that faced some major concerns about its viability overall. The headwinds faced by the industry in the first half of this year center around the financial backing of new products. Without the ability for drugmakers to sell their products, particularly given the massive cost to get a drug approved in the first place, the industry risked seeing the bottom drop out of investor enthusiasm.

There is significant risk in the industry for even traditional small molecule or biologic drug candidates, and many fail in early phases of testing. Despite this, the rise in contract manufacturing led to smaller, less diversified companies going public and attempting to produce and market their own drugs, rather than simply de-risking to the point they can sell out to a large pharma company. A Major trial failure or other disruption in one of these can be a company killer. Investors panic and flee the security causing a depletion of funds to develop the next product in the pipeline, the company has to lay off large swathes of its workforce to reduce burn rate, and ultimately the company may sell off its assets and shutter or be acquired in its entirety. Add in the inherent risk specific to Gene Therapy products, and you amplify the potential for this kind of outcome.

In fairness, all these companies began developing their products well before the pullback of the past nine months. They all had proof-of-concept data that already had de-risked the assets in a big way. But there have been plenty of failures in late phase testing as you broaden your inclusion/exclusion criteria, and all three companies had broad enough pipelines that they could have pivoted. However, their management teams and boards pushed forward, and in doing so they scored a major victory for the patients waiting for options. They also scored an important victory for the industry at large, whether they were aiming for it or not.

With these new approvals also comes the proof of concept that Gene Therapy drugs can be both effective and safe, and they pass the risk-benefit analysis not just of patients who in some cases may be willing to take a significant risk in their suffering, but of investors who have the luxury of cold calculation. The high price tags help – these treatments range from $631,000 per year to nearly $3 Million per dose (albeit for a one-and-done drug). There is a high likelihood that reimbursement will be robust given the systemic treatments avoided with these therapies. The market share will continue to increase – there are now over 30 marketed Gene Therapy products – and the overall spend on these drugs will bring in much-needed profits to the companies on the cutting edge of innovation in this field. This will spur more investor enthusiasm, drive more funding, and result in more innovation, and this cycle will continue in a positive way. As our consultants work on more of these products, we are able to take the lessons learned to new clients, and help drive this innovation faster, pushing forward our mission to get novel treatments to patients who need them right now.