The gene therapy industry is in an exciting phase of growth, undergoing significant M&A activity, product sales and new marketing authorisations that are being issued with increasing regularity globally. Recent reports have estimated that the market is likely to be almost four times its current value by 2025 , with up to 20 new product approvals expected every year.
This rapid growth brings inevitable challenges. Significant issues relating to regulatory standards in manufacturing plants, establishing acceptable re-imbursement policies and anti-trust investigations are among a few. The intellectual property landscape has been lower profile, with the exception of the ongoing CRISPR patent fights, but is clearly catching the public eye as the sector develops. It is important that companies operating within this field don’t underestimate some of the key IP challenges currently dominating the sector in Europe.
Continued rise in contentious patent proceedings
Vector technology is fundamental to the gene therapy industry and there are a number of different platforms that are used by companies for delivering the genetic treatments. James Wilson from the University of Pennsylvania, a pioneer of adeno-associated virus (AAV) vectors, one of the key platforms, isolated several AAV serotypes for the first time at the University. RegenxBio spun out of Penn in 2009 and licences a package of AAV vectors named the NAV Technology Platform. This platform, described by RegenxBio as including a variety of improved serotypes such as AAV8, is protected by a portfolio of patents. As well as developing some of its own therapies, RegenxBio licences the platform to many big players including Novartis for their product Zolgensma. Clearly this is an extremely valuable platform, and this is reflected in the cost of the licence fees.
It is therefore not surprising that RegenxBio’s European patents are being attacked using the European Patent Office’s (EPO) opposition procedure. Third parties are attempting to knock the patents out and are taking advantage of a feature of the European system that allows them to stay anonymous. A final decision on the fate of the patents has not yet been taken by the patent office. If the patents do survive these attacks, it is likely that national patent litigation proceedings will be the next stop.
RegenxBio is not alone in this attack. Several other vector platforms face similar opposition strategies. For example, two third parties have applied anonymously to the EPO requesting that a patent protecting Bluebird Bio’s lentiviral vector platform is revoked.
Interestingly it is not just competitors that are trying to knock out patents covering gene therapy treatments. Again, using the EPO’s opposition procedure, two patient interest groups have attacked a patent protecting Novartis’ KYMRIAH product on the rationale that the price for the therapy is not justified, and that the patent is for a product essentially based on university research and public funding.
As this field gets more crowded, a rise in contentious proceedings is inevitable. Freedom to operate globally will increasingly become an issue, and clearing the way for companies to develop their treatments without paying exorbitant license fees to use vector platforms is a significant incentive. Exacerbating this situation, in the UK at least, is the current approach to assessing infringement. The Supreme Court has introduced a doctrine of equivalents into UK law in Actavis v Eli Lilly and this raises the question of whether a claim directed to one type of vector platform could be held to cover another vector platform. This certainly increases the motivation to attack vector platform patents in the hope of them being revoked.
The power of orphan designation and data exclusivity strategies
Another strong right that is particularly significant to the gene therapy industry is the orphan designation granted for rare indications. Gene therapies often target niche populations of patients and are highly personalised, and therefore can qualify as an orphan medicine. In Europe, a therapy that successfully achieves orphan designation is granted ten years of protection from market competition, with a possible extension of two years for a paediatric medicine.
Several gene therapies have already been awarded orphan status, such as Novartis’ Zolgensma for spinal muscular atrophy and Kymriah for B cell precursor acute lymphoblastic leukaemia.
Challenging an orphan designation is much more difficult than attacking a patent. However, it is possible, and actions can be brought by third parties via the Committee for Orphan Medicinal Products (COMP). The COMP themselves also investigate designations on an ad hoc basis and will consider investigations in light of a report companies must submit annually. Given the implications of an orphan designation for market protection, we expect to see an increase in COMP challenges with the rise of gene therapy approvals.
Data exclusivity is another route used to prolong market exclusivity and is available to all authorised therapies. It is a separate right that could provide up to 10 years of data and market exclusivity from the date of authorisation.
Patents often have less than 10 years of term left once the drug they cover enters the marketplace, which may be even less for complex gene therapies with long development pipelines. Therefore, aligning all types of exclusivity strategies will provide powerful exclusivity rights for gene therapy companies.
Can generics thrive in the gene therapy industry?
The gene therapy sector presents a new combination of challenges for generic companies. In terms of the technology, these are complex therapies and significant know-how has been developed over many years by the originator companies. On top of this, the treatments are often highly personalised and are not off the shelf ‘one size treats all’.
On the regulatory side, there are strict manufacturing standards, which are difficult to meet for large-scale production. Logistics can also be extremely challenging. In some cases, live cells are taken from a patient ‘on demand’, transported to a manufacturing centre, processed into the personalised medicine, and then transported back to the hospital for infusion back into the patient. On a practical level, this is an onerous process.
Gene therapy treatments are often also one-off treatments, with the expectation being that the condition is cured for good. In the context of orphan indications with small patient group sizes from the outset, there is a question over the market size and if it will be significant enough to incentivise generic drug development.
Finally, from a public perception perspective, will patients ever trust a generic version? The point of these treatments is to change our genetic make-up. This is a particularly invasive concept and it is likely to be more difficult to convince patients that a generic version is acceptable, particularly in the context of the complexity of some of the treatments.
This begs an obvious question - is this industry actually ‘genericisable’?
When monoclonal antibodies were first developed over 30 years ago, generic competition seemed unlikely. The regulatory framework was unsuitable for allowing authorisation of generic versions of molecules that were not exactly the same as originator products and it was difficult to envisage a system that could cope with these complex biological molecules. However, there is now a well-developed regulatory framework allowing for biosimilar products. Over 60 biosimilar products are already authorised in Europe.
Arguably, the challenges facing would-be gene therapy generic companies are even greater than those in the biologics field. But the cost of gene therapy treatments means there is a huge incentive to facilitate competition in the sector, once patent rights and other exclusivity periods have expired. It is generally accepted that innovators in this space should be allowed a period of higher prices to recoup their R&D costs, but, after that period has passed, the “social contract” is that the costs come down.
There is already an awareness among the public of the high costs associated with gene therapy. If costs do not decrease because the barriers are too high for market entry, we expect governments will introduce mechanisms to facilitate competition. Governments will also be more involved in devising how gene therapies are financed, given that the current payment structures are not built to cope with the gene therapy model.
The trickier aspect for generics in this space is public conception, and the significance of this will depend on the particular situation. If it is a question of survival and time is critical, such as spinal muscular atrophy type 1 where children generally do not survive beyond a few years, parents may only be prepared to accept the originator product. Where time is not quite so critical, such as with certain types of blindness, perhaps a generic version would be more acceptable. It will mostly be insurance companies taking a view as to what is acceptable, which nevertheless adds another layer to the decision-making process.
Lessons to be learnt
Looking forward, we expect there will be a generic market in the gene therapy space, once the patent and data exclusivity periods expire. The rate of generic development will likely depend on the particular treatment, but we should expect a lot more in this space.
Increasing competition, combined with an inevitable rise in contentious proceedings as third parties attempt to knock out patents, presents a combative landscape for the gene therapy industry in Europe. Companies need to be prepared for these attacks and protect their technologies – aligning patent, orphan designation and data exclusivity where possible.
This article was first published by Law360 and its content has been reproduced with the permission.