Furthermore, this focus on high unmet need in smaller, underserved populations has enabled faster approval by regulatory authorities than diseases that impact larger patient populations. Most gene therapies have come to market under an accelerated regulatory review pathway (for example, a regenerative medicine advanced therapy or breakthrough designation by the FDA), which expedites the approval process. The importance of this accelerated process was emphasized in a May 2018 speech by then–FDA Commissioner Scott Gottlieb: “These products are initially being aimed at devastating diseases, many of which are fatal and lack available therapy. In these settings, we’ve traditionally been willing to accept more uncertainty to facilitate timely access to promising therapies.” 

These accelerated pathways are shifting the paradigm of clinical trials by consolidating the Phase I, II, III process into Phase I, Phase II/III, and confirmatory Phase III trials after approval (similar to the trend in oncology research). The small patient populations also make it possible for companies to experiment with innovative trials designs (with regulatory involvement and approval), including single-arm and novel or surrogate endpoints. However, these trials may also require a different approach to decision-making within biopharma operations.

Although rare disease remains a focus in gene therapy, much of the early-stage gene therapy pipeline is in oncology. As of September 2019, roughly 25 percent of the overall gene therapy Phase I and II pipeline is oncology focused, including 17 Phase I RNA based and 8 Phase I DNA-based therapies. These oncology-directed therapies will compete with more traditional modalities (many of which will soon have biosimilar competition), and thus will need to demonstrate increased cost-effectiveness.

Much of the innovation and development in gene therapy have been driven by smaller biotech companies or research universities, sometimes in partnership with a large pharma company or an entity specialized in the targeted therapy. In fact, 90 percent of gene therapy development to date is from companies with fewer than 500 employees. Many of these biotechs are platform companies who have optimized the manufacturing and delivery of their technology. When combined with the current funding climate, this has enabled many of them to quickly scale to multiple clinical programs across multiple therapeutic areas. As the technology underlying gene therapy matures, large pharma companies are becoming more excited about owning the technology versus partnering, as shown by the recent large acquisitions of Avexis by Novartis (for $8.7 billion) and Spark by Roche (currently in negotiation for $4.3 billion).

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