Gene Therapy R&D Focus Shifts: Academia Fills Long-Standing Void Left by Big Pharma

Gene therapy holds the promise of fundamentally changing how dozens of genetic diseases are treated, while also reshaping the path academic institutions in this field take to bring discoveries from the lab to the clinic.

More than a decade ago, skepticism from the private sector pushed institutions like the University of Pennsylvania and Nationwide Children's Hospital to advance experimental programs to a more mature stage before selling their ideas to biopharmaceutical companies—a departure from the old model of merely locking in molecular targets and leaving the heavy lifting of development to industry.

As a result, university technology transfer offices have become more deeply involved in the technical and commercial details of preclinical drug development, including financing organization, startup creation, and even manufacturing capacity. This model has spawned numerous startups, such as AveXis, Spark Therapeutics, and Bamboo Therapeutics, which have been acquired by large pharmaceutical companies in recent years.

"The old model was: 'I have a patent, throw it over the wall to you, and you throw me a bag of money,'" said John Swartley, Managing Director of the Penn Center for Innovation, in an interview. "Now it's completely different—it's co-development."

"We've been directly involved for years in pushing the technology forward, and our commercialization partners are expected to take it all the way to market."

A paper published earlier this month in the Journal of the American Medical Association (JAMA) quantified this shift. Of the 341 active gene therapy trials in 2019, hospitals, universities, and the National Institutes of Health (NIH) jointly funded 206, while biotech and pharmaceutical companies led the remaining 135.

In terms of funding, because some trials had multiple funders, hospitals, universities, and the NIH participated in more than 280 of these studies. Another 14 trials were funded by other federal sources or nonprofit charities.

Hospitals and universities were most active in early-stage research, with industry funding only 22% of Phase 1 clinical trials. However, in gene therapy, these initial human trials may carry more weight because the benefits of gene repair often become apparent quickly.

"This marks a significant departure in gene therapy from the prominent drug development model where 'academia does basic science and finds targets, then pharma develops the actual drug,'" wrote Walid Gellad, one of the paper's authors and director of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh, in an email to BioPharma Dive.

The shift in the academic model has also raised questions about the high prices pharmaceutical companies charge for gene therapies, given the more significant role played by universities and other nonprofit entities.

"I think this paper helps inform the discussion: how high does pricing need to be to encourage private risk-taking in gene therapy—given that academia and the NIH are less involved in later stages, this number may differ from other drugs," Gellad wrote.

Universities' deep involvement in gene therapy development stems partly from the private sector's avoidance of a treatment path that until a few years ago was considered high-risk. The death of Jesse Gelsinger in a Penn gene therapy trial in 1999 severely damaged the field's reputation and greatly dampened pharmaceutical interest.

Scientists held firm, and their institutions pushed the field forward over the following years. When Swartley began at Penn in 2007, one of the first meetings he attended was with James Wilson, the university's gene therapy director—who had led the tragic trial that resulted in Gelsinger's death.

"From an external perspective, from an industry perspective, there was little progress at the time," he said. "But the research that Dr. Wilson and his colleagues shared with us clearly showed they had convincingly argued this would quickly shift to a more developmental paradigm."

"They foresaw that when this shift occurred, industry would have enormous interest," Swartley added. "That turned out to be extremely prescient."

The University of North Carolina faced a similar situation in the early 2000s, but took a slightly different approach—spinning out companies like Asklepios BioPharmaceutical to advance gene therapy beyond university labs.

"We had a lot of vector technology, but the market wasn't receptive to gene therapy at the time," said Kelly Parsons, Associate Director of Technology Commercialization at UNC, in an interview. "We had a startup that had to work very hard to establish the value of gene therapy."

Asklepios remains an independent company today, and some of its gene therapy work has been folded into Pfizer's Duchenne muscular dystrophy program, previously developed by Bamboo Therapeutics.

But the time universities or closely affiliated startups spent building knowledge and expertise is one reason large pharmaceutical companies are rushing into the field. By advancing the technology, universities reduced the risk of failure, making companies more willing to invest.

"We recognized that if we wanted the for-profit sector, the investment community, and the venture capital community to give gene therapy a chance, then as an institution we had to start the process of de-risking assets," said Matthew McFarland, Vice President of Commercialization and Industry Relations at Nationwide Children's Hospital, in an interview.

The investment required went beyond what they expected. "We asked ourselves: 'How far do these assets need to be advanced before external funding becomes interested in investing?'" he said. "And the reality is, wow, you have to de-risk them to the point where they can enter patient trials."

This included the first Phase 1 study of the spinal muscular atrophy gene therapy now known as Zolgensma, which was licensed to AveXis and later acquired by Novartis.

More broadly, development work also included building manufacturing capacity compliant with Good Manufacturing Practices—which set standards for quality and consistency of finished drugs—as well as regulatory teams within hospital technology transfer offices capable of preparing Investigational New Drug applications.

The accumulation of manufacturing expertise brought Nationwide Children's Hospital a new business: the for-profit companyAndelyn Biosciences, which will operate a commercial-scale gene therapy manufacturing facility.

Solving manufacturing issues remains a challenge for many academic gene therapy centers as they near the handoff to private partners. Biopharmaceutical companies want assurance that therapies produced by university scientists will perform as well in clinical trials and broader use as they did in early research.

"No university has the capacity to scale up early production to a level sufficient to provide enough doses... industry has to replicate the entire process," said Jim O'Connell, Director of Technology Transfer at UF Innovate, University of Florida, in an interview. "It's well known that university labs can't make results reproducible in the real world in areas like small molecules."

This issue may be behind the data quality problems with Zolgensma. Last summer, Novartis was criticized by the U.S. Food and Drug Administration (FDA) for submitting manipulated preclinical data,and the Swiss drugmaker linked the scandalto Brian Kaspar, co-founder of AveXis and a former Nationwide Children's Hospital trial investigator. Kaspar, through his attorney,denied all wrongdoing。

"Academic institutions have to ask themselves: how deep do we want to get involved?" O'Connell said. "This brings a set of costs universities aren't used to bearing. How do we share costs? How do we reasonably share risk?"

Despite the thorny issues, the increased investment has brought better returns for universities. Technology transfer offices interviewed by BioPharma Dive reported that licensing agreements for gene therapies advanced to human trials or near that stage are far more lucrative—funds that flow back to scientists and their departments to support new research.

But returns are not distributed equally. Lee Vinsel, an assistant professor at Virginia Tech, said schools with research that industry is eager to license thrive, while others struggle. Vinsel is writing a book titled "The Innovator's Delusion."

In fact, according to the Association of University Technology Managers, universities overall reported just over $3 billion in licensing revenue in 2017, but spent $68 billion. Fewer than 1% of licenses generated more than $1 million in revenue.

Moreover, Vinsel argues, the potential returns from licensing revenue incentivize universities to only conduct research that the private sector is willing to license.

"One of the reasons we need federal funding and university research is to do basic science that companies won't pay for," Vinsel said. "If we steer more university research toward profitable directions, who will do the basic work, including research that truly benefits society but won't make anyone rich?"

However, Nationwide Children's McFarland noted that the institution also signs less lucrative licenses, such as a device to prevent pressure ulcers in tracheostomy patients, and a mental health research and treatment facility the hospital launched—projects supported by revenue from larger deals like gene therapies.

"If we can use those returns to continue nurturing research that isn't just gene therapy, or even expand further, it can have an impact on all research," he said.

"A lot of times, we're not a technology commercialization office, but a technology realization office, because all we do is bring results to the public, and we don't get a return from it."