Source: Reuters

Way back when Novartis invested in personalised CAR-T cancer treatments being developed at the University of Pennsylvania, analysts pondered the tricky question: How can pharma companies profit from curing patients?

The FDA-approved gene therapies are designed to be one-time cures, which for a lot of patients they have, reports Fierce Pharma. But, many more gene therapies are continuing to move through biopharma pipelines, and that’s presenting a challenge for the industry. This is largely down to the fact that the industry itself relies heavily on the cash and profits that their products curate over time.

Goldman Sachs analyst, Salveen Richter, said, “While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow.”

Using Gilead as an example, he explained that the success of the company’s hepatitis C franchise, that includes the now-former megablockbusters Sovaldi and Harvoni, “has gradually exhausted the available pool of treatable patients.” It’s shrinking customer base, coupled with tough competition from AbbVie’s Mavryet, forced Gilead to forecast help C sales for this year of no more than $4 billion – falling short of analysts’ estimates of $5 billion.

Despite this, Richter does believe that there are some possible routes for companies to take to achieve sustainable gene therapy sales. For instance, to address large markets like hemophilia, worth as much as $10 billion and growing about 6% a year. Spark Therapeutics is currently working on gene therapies to treat hemophilia A and B, the latter of which is partnered with Pfizer. 

Richter added that there is the chance for companies to expand their portfolios, citing as an example the “hundreds of inherited retinal diseases” that exist. Although Spark’s Luxturna is now approved to treat fewer than 2,000 patients with a specific genetic mutation, the company is currently working on gene therapies to treat at least two other inherited eye disorders. 

In its report, Goldman Sachs highlighted four “genome medicine disrupters and innovators” well positioned to find a business model in cures: BioMarin, Bluebird, CRISPR Therapeutics and AveXis. 

Bluebird and CRISPR may have seen their stocks double over the past year, but Richter noted, “we continue to see upside for the best-positioned companies,” because of a number of key events coming up. 

Overall, it would seem that Goldman Sachs is optimistic that gene therapy developers and acquirers will work out the business-model challenge. In the new report, they argued that investors have not yet fully recognised the potential for gene-based treatments to “create new profit pools and disrupt the existing $1 trillion annual biopharmaceutical market.”

They predict that genome medicine will create a total addressable market of $5 trillion, “with the potential to expand further.”