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Gene Therapy in Limelight on Novartis Deal: 3 Stocks in Focus

Zacks

The gene therapy space has once again hogged the limelight following the Swiss pharma giant NovartisNVS announcement of the acquisition of AveXis, Inc. AVXS.

Per the agreement, Novartis will pay $8.7 billion for the buyout of this clinical stage gene therapy company. AveXis lead product candidate, AVXS-101, is being evaluated as one-time gene replacement therapy for spinal muscular atrophy, a disease which results in early death or life-long disability with considerable healthcare costs. The acquisition will poise Novartis in the promising gene therapy space. The acquisition will be completed in mid-2018.

Post the announcement, share price of major players in this space moved up. Shares of AveXis have skyrocketed 200.2% in the last 12 months.

Novartis is trying to develop a gene therapy portfolio. In January 2018, Novartis signed a license and commercialization agreement for the development and commercialization of investigational voretigene neparvovec outside the United States with Spark Therapeutics. Novartis obtained FDA approval for the first CAR-T therapy, Kymriah, in 2017.


Pfizer PFE recently initiated a phase Ib clinical trial for its mini-dystrophin gene therapy candidate, PF-06939926, in boys with duchenne muscular dystrophy.

What is Gene Therapy?

Gene therapy helps to mitigate the adverse effects of a malfunctioning disease-causing gene. The therapy intends to add a functional gene back in a person's system replacing the malfunctioning one to cure diseases. The therapy has a different approach from the traditional drug ones wherein the underlying cause is getting treated unlike symptoms.

Gene therapy is set to become one of the most promising space in the volatile biotech sector which continues to grapple with increasing threat from biosimilars. Notably, the Medical – Biomed/Genetics sub-industry carries a Zacks Industry Rank of 173, which places it at the bottom 35% of the 265 plus Zacks industries.

Medical – Biomedical and Genetics Industry 5YR % Return

Medical – Biomedical and Genetics Industry 5YR % Return

Stocks in Focus

Given the potential the market holds, a number of companies have started to develop the therapy with several of them having promising candidates in their pipelines.

Spark Therapeutics ONCE is one of the prominent players in the gene therapy space. The company obtained FDA approval for its lead gene therapy drug, Luxturna (voretigene neparvovec-rzyl), for the treatment of patients with viable retinal cells and confirmed biallelic RPE65 mutation-associated retinal dystrophy.

Luxturna is the first FDA-approved gene therapy for inherited retinal disease and the first adeno-associated virus (AAV) as well as for vector gene therapy approved in the United States. The company has built a pipeline of gene therapy product candidates that are directed to the retina, the liver and the central nervous system. The pipeline includes an ocular program consisting of SPK-7001, targeting choroideremia currently in phase I/II. Its hemophilia programs consist of SPK-9001 for hemophilia B and SPK-8011 for hemophilia A, both currently in phase I/II clinical trials.

The company’s shares have rallied 49.1% in the last three months, as against the industry’s decline of 9.0%. Spark Therapeutics currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

uniQure N.V. QURE is another promising player in this space which is creating a pipeline of innovative gene therapies that have been developed both internally and through its collaboration, focused on cardiovascular diseases, with Bristol Myers-Squibb.

The lead product candidate, AMT-061, is being evaluated for the treatment of patients with severe and moderately-severe hemophilia B. The company also announced plans to advance AMT-061, which includes an AAV5 vector carrying the FIX-Padua transgene, into a pivotal study. The company has already obtained orphan drug designation for AMT-130 for the treatment of Huntington’s disease in the United States and the European Union and holds global commercialization rights of the program.

uniQure currently carries a Zacks Rank #3. uniQure’s stock has moved up 66.7% in the last three months as against the industry’s decline.

BioMarin Pharmaceutical BMRN dosed the first patient in the global GENEr8-1 phase III study with the 6e13 vg/kg dose for valoctocogene roxaparvovec, an experimental gene therapy for the treatment of patients with severe hemophilia A in December 2017. The phase III program includes two studies with valoctocogene roxaparvovec, one with the 6e13 vg/kg dose (GENEr8-1) and one with the 4e13 vg/kg dose (GENEr8-2).

Valoctocogene roxaparvovec had been granted Breakthrough Therapy Designation by the FDA. The European Medicines Agency granted access to its Priority Medicines regulatory initiative for valoctocogene roxaparvovec.

BioMarin currently carries a Zacks Rank #3. BioMarin’s stock has lost 7.1% in the last three months underperforming the industry’s decline.

What’s Ahead?

With gene therapy gaining traction, investors should keep an eye on this space as potential approvals and data read-outs from late stage trials of several companies are likely to keep them on a growth trajectory.

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