Luxturna, approved in December 2017 in the US1 and November 2018 in the EU2, is a landmark in the history of gene therapy and a transformative3 treatment for patients with inherited retinal disease (IRD) caused by biallelic RPE65 mutations.
Luxturna’s approval kicked off a period of gene therapy optimism; there seemed to be an expectation at the time that a wave of gene therapies would soon follow, with a 2017 MIT report predicting 39 US gene therapy approvals by 20224 and the FDA saying in 2019 that they expected to be approving 10 to 20 cell and gene therapies a year by 20255. In the months following Luxturna’s approval the FDA issued statements and guidance supporting fast-track regulatory processes6, suggesting that gene therapies could qualify for the regenerative medicine advanced therapy (RMAT) designation.
Big pharma also started to buy into IRD gene therapies at the time, with back to back acquisitions in early 2019 of Spark by Roche for $4.8bn7 and Nightstar by Biogen for $800m8 (although the value of the Spark deal was principally driven by the haemophilia program). Janssen and Meiragtx also announced their $100m partnership in January 20199.
In theory, gene therapy has many advantages for the treatment of IRDs:
- There is significant unmet need; most IRDs have few or no effective treatment options
- The causal genes for many inherited retinal disorders have been identified and are well-understood10
- The eye is immune-privileged, which limits the potential for the immune side effects that have historically presented a major problem for gene therapy programs11
- Cells in the retina are generally post-mitotic (not actively dividing), allowing for sustained gene expression without the need for genomic integration of the transgene, with transgenes preserved over time11. This is in contrast to liver-directed programs like in haemophilia where transgene expression has faded over time12
- The eye is a small and enclosed organ, and hence local delivery is possible with relatively low doses of vector genomes compared to the amount required for systemic or liver delivery. This keeps manufacturing costs and side effect risk down11
- Being on the surface of the body, the eye can be directly visualized and accessed for local administration11
- Gene therapy can be administered to a single eye, and so patients can act as their own control groups in clinical trials which reduces enrolment size (at least in theory, we’ll come back to this)
Yet, nearly five years on from Luxturna’s first market authorization, and in spite of a rich pipeline of ophthalmology gene therapies, there have been no further approvals for ophthalmologic gene therapies and only a handful of approvals for gene therapies in other indications. Why is this the case? And when we see another Luxturna?
Luxturna had only modest commercial success
Despite Luxturna’s laudable technical, clinical and regulatory successes, Spark’s commercial rewards for developing the gene therapy were minimal - in large part because there are so few addressable patients. Quarterly US sales hovered around $10m prior to Roche’s acquisition, even with its high US list price at launch of $425,000 per eye.
Table 1: Luxturna US revenue by quarter
|Time period||US sales|
Source: Spark’s SEC filings
Spark was able to supplement their US revenue stream by licensing out Luxturna’s ex-US rights to Novartis for $105m upfront and $65m in milestones (plus royalties)13, as well as selling their paediatric priority review voucher to Jazz pharmaceuticals for $110m14. Although when taken as a whole Spark only made around $300m from Luxturna up until their acquisition, which hardly recoups the $568m in expenses they incurred from IPO up to Luxturna’s launch.
Table 2: Spark’s annual R&D costs and total operating expenses from IPO up to the Luxturna’s launch (note that this also includes expenses related to their haemophilia program, among others)
|Time period||R&D costs||Total operating expenses|
Source: Spark’s SEC filings
Following the acquisition public sales figures are not available as neither Roche nor Novartis breaks them out. It seems safe to assume that Luxturna is not generating meaningful revenues for either company. I suspect that the limited return on investment from Luxturna has been a factor deterring other companies from pursuing gene therapy programs for other IRDs.
The troubled clinical stage pipeline of IRD gene therapies
Outside of Spark, the situation is not hugely encouraging, with public ophthalmology gene therapy companies faring poorly relative to the broader biotech indices. The chart below shows the stock performance of listed ophthalmology gene therapy biotechs with programs in clinical stage since 2017 (including those with programs in IRDs and acquired diseases such as age-related macular degeneration). Outside of a few brief spells of outperformance relative to the XBI the cohort has not performed well on average (“AVG” line) and has quite substantially underperformed the XBI since mid-2020.