This blog was written by Michael Gladstone, Principal at Atlas Venture, as part of the From The Trenches feature of LifeSciVC.
The biotech industry was reeling after the 2016 J.P. Morgan Healthcare Conference, with many commentators foretelling doom in the wake of massive sell-offs in healthcare stocks. Ever the optimist, I made the not-so-bold prediction that the world would not end. It hasn’t yet, so I’ll (generously and unilaterally) declare victory and retire from prophesizing with a record of 1-0.
But keeping with the trend of optimism in the face of upheaval, here l will recap what I’m most excited and optimistic about in 2017. To borrow a line from Martin Luther King, Jr. in the week of his holiday: “Even if I knew that tomorrow the world would go to pieces, I would still plant my apple tree.”
What I won’t be talking about (after I talk about it): Policy Changes
You’ve already heard countless predictions about how Trump/Congress will change insurance coverage, drug-pricing, and corporate taxes, and how those changes will impact our industry. Most of these predictions will be wrong, but I don’t have better ones. So I won’t waste more of your time on this, except to say that as a citizen I truly hope our politicians do not recklessly endanger millions of lives by stripping health insurance from vulnerable individuals without a safety net and effective alternative. My fingers are crossed.
On to other topics…
Immuno-Oncology: More investment, more deals… and more data.
IO enthusiasm from investors, pharma, academics, and clinicians seems to continue unabated. While this does have some troubling competitive implications, I’m still finding a lot to be excited about in 2017:
- Big-time data. We’ll see very important readouts in front-line lung cancer (PD1/L1 + chemo or CTLA4), maturing data with checkpoints + in situ immune activation (T-Vec/checkpoint combos), and initial/expanded data on a broad set of new targets (LAG3, TIM3, CD47, STING, ATP/adenosine axis, IDO ex-melanoma, etc.) It’s time time to find out if the next generation of IO can live up to expectations.
- Clinical development is getting smarter – because the benchmarks are better understood and more stringent. We now have a single-agent PD-1/L1 data in many disease settings. This collective experience facilitates the setting of stringent benchmarks for new agents and combos, enabling thoughtful drug developers to get a more meaningful signal in stratified 30-40-patient cohorts.
- Clinical development will keep getting smarter – because biomarkers are finally starting to bear fruit. While Merck and BMS taught the field a lot in 2016 about the value of PD-L1 positivity, we are still early in the quest to extend this to more sophisticated and precise biomarkers for patient selection and monitoring of efficacy/pharmacodynamics. This will take more time, but it was clear in my JPM meetings that Pharmas have become much more aggressive in biomarker data collection, analysis, and prospective hypothesis testing. An example of this is the increasing number of trials requiring repeated tumor biopsies to better reveal longitudinal evolution of the tumor microenvironment in response to treatments.
- Asset redundancy seems likely to continue, but is actually occasionally very helpful. While we’ve seen some very important “cross-company” combo studies, most developers still feel that development fluidity and bundled pricing are most feasible when they “own” all of the relevant assets. I understand this (and personally can’t imagine designing/coordinating a “IO triple combo” study across three Pharmas), but I hope some kind of consolidation framework evolves to reduce this redundancy in validated pathways. In the meantime, however, this can be a helpful catalyst for the combinatorial testing of different agents in diverse clinical settings with different patient populations (as the diverging Merck/BMS results in 1L NSCLC powerfully demonstrate).
CAR-T: More questions than answers, but undebatable potential
CAR-T sentiment is as fluid and varied as ever. Simultaneously, early adopters are altering their strategies, while those late to the party are actively contemplating how to get in. Many will keep a close eye on the launches and real-world efficacy/safety of Novartis’s and Kite’s CD19-targeting products, while also looking for ways to leapfrog ahead in what is still a very open space. Areas of interest include:
- Streamlining manufacturing efficiency/throughput
- Allogeneic products (with many questions about whether we know enough about immunology to nail this without a few more clinical iterations)
- New antigens (duh – but thanks Bluebird and City of Hope!),
- Improving efficacy and safety by introducing more “pharmacology” to cell therapy (e.g., well-behaved ON switches for the CAR or related immune processes).
Other oncology: It’s not all about the T cells
Solid data is emerging for next-gen kinase oncogene inhibitors (e.g., Trk, FGFRs, etc.) and newer drugs targeting validated targets (Btk comes to mind, especially Acerta/AZ’s ambitious set of head-to-head studies vs. ibrutinib). And with PARPs leading the charge, the broader field of DNA damage repair seems to have arrived (or perhaps re-arrived) in a big way, with goals of extending efficacy into patients relapsing after PARP inhibitor therapy and novel clinical settings beyond ovarian and breast cancers. These and other genetically-guided “synthetic lethal” opportunities look to be hot areas for new data, likely approvals, and deal-making in 2017.
Non-alcoholic steatohepatitis (NASH): De-liver-ing on the promise
The NASH field has become even more interesting since Rosana Kapeller’s expert recap from 2015. This year will reveal more Phase 2 data from several agents, and (thanks in part to increased FDA clarity on endpoints) more Phase 3 studies initiated. I heard widely varying views from Pharmas/Biotechs on the relative contributions of different pathologies to NASH (e.g., metabolic state, inflammation, and fibrosis) with no real consensus. This ought to make for a lively set of Phase 3 showdowns. Smart players are making a portfolio of bets and already thinking about combinations.
There were, however, some concerns about the regulatory and commercial future of this field. Will head-to-head studies be needed once one or more drugs are approved? Will outcomes studies eventually be required for approval and/or broad uptake? How will payers manage access/reimbursement for drugs that treat a largely asymptomatic disease that (at least today) requires an invasive procedure for definitive diagnosis and disease monitoring?
Immunology/autoimmunity: Breaking the inflammatory cycle
For a long time, the autoimmunity/inflammation field has focused on hammering cytokines or leukocyte trafficking/signaling to cool down overactive immunity. This has produced some great drugs, and there are still highly intriguing targets that deserve broad clinical pursuit (following the genetics helps). But we’re also seeing some very different approaches gain traction, such as:
- Extinguishing autoantigens for Celiac disease (PvP/Takeda) or rheumatologic disease (Padlock/BMS)
- Inducing antigen-specific tolerance (Anokion/Celgene, AnTolRx/Pfizer, Selecta/Sanofi)
- Breaking the cycle of persistent agitation by sterile inflammatory insults (IFM Therapeutics and Inflazone)
- Fundamentally re-balancing immunity via selective Treg modulation (Delinia)
These are all welcome forays into exciting new spaces. Despite how competitive many of these these markets are, there remains tremendous unmet clinical need.
New Modalities: Nobody said it was easy … (but nobody said it would be this hard)
2016 was an up-and-down year for novel modalities like oligo-based therapies and gene therapy. We’ll undoubtedly continue to see a mix of progress and setbacks, but 2017 could be another landmark year for both RNA and gene therapies.
AAV is doing fantastic things for patients with hemophilia and retinal diseases, and it is starting to make progress in the CNS as well (e.g, SMA, Parkinson’s). Despite that, we’re still very much in the first innings of this ballgame. Unsurprisingly each product behaves differently, so we’ll need a lot more patients and a lot more follow-up before we can draw conclusions on a number of thorny questions, e.g.:
- Optimal construct/transgene design and capsid selection
- Manufacturing and analytics for FDA-approval quality and scale
- Incidence and management of both acute inflammation and later-onset immunogenicity
- Getting into more diseases: getting beyond low-expression-level diseases like hemophilia, getting beyond the liver and eye (e.g., muscle, kidney, heart)
- Determinants of expression amplitude, durability, and inter- and intra-patient variability. Given the so-far-unsurmounted challenges of AAV re-dosing, we might need a better gene vector to address diseases where a single dose of AAV cannot safely and durably provide life-long sufficient expression levels
Likewise, we still have many unanswered analogous questions for ex vivo lentivirus- or nuclease-mediated gene editing/therapy. But 2017 will likely show us new lenti-HSC data for beta-globin restoration and perhaps also for other lentivirus based therapies, e.g., from AvroBio or Orchard Therapeutics.
While all of these data sets are relatively small and early, many of these AAV and lentivirus-based gene therapies are already providing extremely meaningful (and in some cases curative) efficacy. It is daunting but also extremely exciting to imagine what lies ahead.
Likewise, Spinraza’s approval (and the jaw-dropping SMA efficacy that warranted it) may finally cement antisense oligos as a primetime modality. This year could be an important one for other single-stranded RNA therapeutics as well, including Atlas portfolio companies RaNA Therapeutics (now proudly advancing a best-in-class mRNA therapy platform) and MiRagen Therapeutics (planning to go public, with two miRNA-modulating therapies in the clinic).
And, lastly, if you’re an IP lawyer being paid hourly for CRISPR work in 2017 – congrats!
Alzheimer’s: The amyloid hypothesis survives another year
If you thought 2016 was the year the amyloid beta debate would finally be definitively resolved … well, why in the world did you think that? Alas, 2017 doesn’t look like it’ll be your year either.
I’ll admit that the revelation at CTAD that Lilly’s solanezumab did not significantly reduce amyloid deposits weakens the case against amyloid. Because solanezumab did not markedly reduce plaques, one might reasonably claim that the biological hypothesis (re: plaque reduction) has not been adequately tested for clinical efficacy. Other mAbs that do reduce amyloid deposits (e.g., Biogen’s aducanumab) could conceivably produce meaningful clinical benefit. We’ll have to wait until 2018 or 2019 to see that Phase 3 data.
But even that may not end the Abeta debate. Personally, I’m more interested in the results of Merck’s studies with their impressive BACE inhibitor. Merck’s EPOCH study in mild-moderate AD will read out first, but I’m more optimistic for the APECS study (in prodromal patients), which probably won’t read out before 2019/2020.
In the meantime, I really hope we see an uptick in development of Alzheimer’s drugs targeting other pathologies (neuroinflammation or synaptogenesis, for example). We need a diversity of approaches here, because even if an Abeta-directed drug benefits some patients, we’ll need additional options and approaches for combination.
One very welcome and accelerating trend in neuro drug development is the increasing use of genetic stratification to enrich patient populations and streamline clinical development. Examples of this include:
- Roche’s study of an Abeta mAb specifically in patients with the autosomal-dominant PSEN1 mutation that predisposes individuals to familial Alzheimer’s (and can someone with a gamma-secretase activator please run a study in this population too?)
- Lysosomal Therapeutics’s (recently partnered with Allergan) development of glucocerebrosidase activators initially specifically in Parkinson’s disease patients with GBA1 loss-of-function mutations.
Anti-infectives: Where my optimism mostly ends
This …. this is not good news. More mega-bugs like this are coming. Regulators have recently shown more flexibility with regards to anti-infectives, but even further expedited pathways will be important. We also need a reimbursement approach that better incentivizes development of the drugs that buffer us from literal extinction-level events. Now is also a very, very bad time to idiotically re-open the book on the value of vaccines. Humans are now at a stage when the question is when, not if, more otherwise healthy individuals will start to succumb to untreatable and highly transmissible pathogens.
Thank you Merck, Gilead, GSK, Pfizer, Allergan, AZ, Medicines Company, Achaogen, Paratek, Cempra, Cidara, Tetraphase, Nabriva, Spero, Arsanis, Entasis, Vir, and everyone else urgently deploying resources to address these problems. In the meantime – please cover your mouth when you sneeze, use hand sanitizer, and remember that for most of our species’ history, infectious diseases have been responsible for a massive proportion of human mortality. Please harbor no illusions that we are entitled to continued protection from that fate.
I was urged to conclude on a more positive note. So … I’m very optimistic about the New England Patriots’ chances against the Pittsburgh secondary this Sunday.