Interview: Orchard's Gene Therapies Bear Fruit With $110m Financing
Executive Summary
The UK firm has attracted more top-tier investors who are clearly impressed with its gene therapy for bubble baby syndrome and a high-quality pipeline in other very rare diseases.
The desire of the UK's Orchard Therapeutics to become a key player globally in the gene therapy space has received a major boost this morning (Dec. 20) with the completion of an oversubscribed $110m financing, backed by powerhouse healthcare investors.
"It is a serious fundraise," CEO Mark Rothera told Scrip in an interview, and the Series B round, co-led by Baillie Gifford and ORI Capital, has attracted significant new investments from Singapore's Temasek and Cowen Healthcare Investments, alongside Juda Capital, Pavilion Capital, RTW Investments, Agent Capital and 4BIO Capital, as well as existing investors F-Prime Capital and UCL Technology Fund. He added that the caliber of investor involved in the financing, which comfortably exceeded its initial goal, showed that top-tier backers are supportive of companies with disruptive offerings.
CEO Mark Rothera
Orchard Therapeutics
In Orchard's case, investor excitement stems from OTL-101, its autologous ex-vivo lentiviral gene therapy in development for the treatment of adenosine deaminase severe combined immunodeficiency (ADA-SCID). Better known as bubble baby syndrome, the very rare inherited disease leaves children without a fully functioning immune system and extremely vulnerable to infections - without treatment, they usually do not survive past the age of two.
The current treatment is a stem cell transplant, but closely matched donors are hard to find and the transplants may not be successful, while those not on any treatment need to be kept in isolation. Orchard notes that enzyme replacement therapy with pegylated-ADA can be highly effective in the short term, but chronic use involves lifelong weekly injections and the long-term survival rate (78% at 20 years) is less promising.
The latter can slow progression and help quality of life, Rothera said, "but I've never seen the sort of outcomes we get now through gene therapy." With OTL-101, "we have treated 50 patients up to five-and-a-half years and so far we have seen 100% survival rate and 96% event-free survival," he stated, showing that patients who would die very young can lead a normal life "and investors are interested in investing in that sort of future."
The firm has only been existence since September 2015 and the speed with which it has been able to start thinking of filing and launching OTL-101 is "a great example of how UK innovation has enabled the formation of a company like Orchard," Rothera says. The initial licenses it got for ADA-SCID came through partnerships with University College London, Great Ormond Street Hospital, the University of Manchester and Central Manchester University Hospitals. These alliances, as well as close collaboration across the Atlantic with the Boston Children Hospital and the University of California Los Angeles (Orchard and UCLA were awarded a $19m grant from the California Institute of Regenerative Medicine in 2016) has helped the company hit the ground running.
"Normally it takes years of R&D before you know whether you even have something that might works but we already knew ex-vivo lentiviral gene therapy was making a tremendous difference with ADA-SCID," Rothera said. The next step is to get regulatory approval and "in a timely manner," he added, as given the high mortality rate of the disease, "we have to do this expeditiously."
He believes that regulators are sometimes understandably anxious about risk/benefit ratios, "especially when the benefit is relatively minor and has to be quantified," but when they see something working like this in these patients, they are happy working with us to find the right pathway."
OTL-101, which has been granted Breakthrough Therapy Designation by the FDA, will be filed by the end of next year, Rothera told Scrip. "There is a route to regulatory approval that we are pursuing", he said, adding that Orchard would not be seeking a commercial partner. "Smaller, highly focused companies do a better job when it comes to treating a small population (the incidence of ADA-SCID is between one in every 200,000 to 1m live births), you need the right people not a large organization."
Earlier this year, OTL-101 was granted a "promising innovative medicine" designation, the first stage of a two-part process for the UK's early access to medicines scheme, under which patients with life-threatening or seriously debilitating conditions are allowed access to medicines that do not yet have a marketing authorization when there is a clear unmet medical need.
The Orchard chief went on to say that the company's goal was to be a fully integrated company, from R&D, through manufacturing and commercialization. It has two facilities in California (Foster City and Menlo Park) which act as hubs to manage the company's contract manufacturing partnerships with the likes of Oxford BioMedica PLC (for the supply of lentiviral vectors) and Lonza Group Ltd. (cell manufacturing).
The ADA-SCID market is a very small one and Orchard will not even be the first gene therapy to tackle it. GlaxoSmithKline PLC's Strimvelis, which was approved in Europe in May 2016, is a gene therapy in which a patient’s bone marrow cells are removed and modified outside the body to produce working ADA enzyme. The modified cells are then returned to the patient via an infusion drip into a vein.
Rothera had warm words for GSK and its Italian partners on Strimvelis, Fondazione Telethon and Ospedale San Raffaele. He told Scrip they were "pioneers who have done an outstanding job in creating a platform and a route to getting approval for gene therapy: they deserve tremendous kudos."
He added that "we are basically building off that heritage, but taking a lentiviral approach with a cryo-preserved product." This means that if approved, patients may be able to be treated with transportable OTL-101 in their home countries – European patients have to travel for Strimvelis as it is only administered at a hospital in Milan.
In addition to ADA-SCID, Orchard is looking at rare immune deficiencies, having signed an alliance earlier this month with France's Genethon to develop gene therapy for X-linked chronic granulomatous disease (“X-CGD”). It is also looking at metabolic diseases, including mucopolysaccharidosis type III.
When gene therapy is mentioned, pricing comes quickly into the conversation. Rothera, who has nearly 30 years of experience and has launched seven orphan drugs during a career that has seen him hold key posts at PTC Therapeutics Inc., Aegerion Pharmaceuticals Inc. and Shire Human Genetic Therapies Inc., concluded by saying society needed to find the right balance.
"As I mentioned before, enzyme replacement therapies have helped but they are chronic therapies and they have to be paid for year-in and year-out but they don't generate the same level of extraordinary outcomes. With gene therapy, we are talking about curative, transformative treatments and the medical value is extraordinary."