What Was Hyped, and What Fell Out of Favor, This Year in Biotech

Xconomy National — 

Every year, Science magazine profiles its “Breakthrough of the Year.” People get excited. But what many readers don’t fully appreciate is that these discoveries—at least in biomedicine—are almost always decades away from turning into useful new drugs, diagnostics, or other products that advance human health.

There are, shall we say, kinks that need to be worked out behind the scenes in the biotech and pharmaceutical industries.

As industry veterans know all too well, biomedical discoveries tend to follow the “hype cycle” popularized by Gartner. Everything starts with a “technology trigger.” That’s followed by a “peak of inflated expectations,” as scientists, entrepreneurs, and investors let their imaginations run wild. Tough technical challenges then emerge and usher in the “trough of disillusionment.” Over time, a few people persevere, solving or mitigating the problems. The technology makes a comeback, entering the “slope of enlightenment.” Eventually, the once-tough problem is solved in everyday manufacturing practice, and the technology enters a mature phase known as the “plateau of productivity.”

This is a useful framework for thinking about biotech, especially when you consider how foundational technologies like monoclonal antibodies came to be.

This has clearly been an optimistic year in biotech. But it’s important not to get carried away. So I sought to compile a list of big ideas and plot them somewhere appropriate on Gartner’s “hype cycle” curve. I sought input from a handful of independent experts who read widely across their respective life science disciplines. Here’s my list of the technologies that entered the “Peak of Inflated Expectations” this year, those bottoming out in the “Trough of Disillusionment,” and those beginning to climb the “Slope of Enlightenment.”

The Peak of Inflated Expectations

CAR-T cell immunotherapy. This field is white-hot as 2013 comes to a close. The CAR or CAR-T acronym stands for “chimeric antigen receptor” modified T-cells. It’s all about a system that involves withdrawing blood from patients, isolating certain immune T cells in the lab, and using gene therapy to transform them so they seek and destroy cancer cells. These souped-up killer T cells then get re-infused into the body so they can keep gobbling and gobbling up cancer cells like in the old Atari “Pac-Man” video game, in the words of industry consultant Sally Church.

Preliminary clinical trials have shown that this method can completely wipe out tumors in more than 85 percent of patients with acute lymphoblastic leukemia—a startling response rate. Switzerland-based Novartis is putting its muscle behind this pioneering cell therapy work from the University of Pennsylvania. A new rival, Seattle-based Juno Therapeutics, raised $120 million in a Series A venture financing this month to develop competing technologies from the Fred Hutchinson Cancer Research Center, Seattle Children’s Research Institute, and Memorial Sloan-Kettering Cancer Center. Scientists still need to ask a lot of questions, like whether the side effect profile is acceptable, whether tumors will find a way to evade even these killer T cells, and whether the modified T-cells will “self-renew” for years in the body, and whether repeat infusions will be necessary. Nobody knows how long the complete remissions seen so far will last.

Antibody-based cancer immunotherapy. Everybody and their brother-in-law tried to jump onto the cancer immunotherapy rocket ship this year. Excitement peaked at the American Society of Clinical Oncology meeting in June, where Bristol-Myers Squibb, Merck, and Genentech/Roche all presented tantalizing preliminary data with targeted antibodies that aim for a molecular target known as PD-1 or PD-L1. The basic idea is to remove a cloaking mechanism tumors use to shield themselves from ordinary immune system surveillance that would kill them. These drugs don’t appear to help everybody, and researchers can’t predict which patients are likely to respond and which aren’t. But they have shown promise against multiple tumor types, and seem to produce long-lasting effects. That’s a big deal. Cancer cells often find a way to resist chemotherapies or targeted therapies. It may prove tougher to evade ongoing immune system surveillance. “Every Big Pharma has a program with an antibody directed against PD-1,” said Michael Houston, a Seattle-based consultant who specializes in peptide and oligonucleotide therapeutic development.

Microbiome-based therapies. Scientists know “virtually nothing about the microbiome,” geneticist David Botstein, formerly of Princeton University, told me recently. Yet, research teams are starting to learn a lot about the trillions of bacterial friends and enemies who co-exist in human guts, along with the trillions of cells that make up each human. Fecal transplants, icky as they may be, appear to be transplant “good bacteria” that help the body fight C.difficile infections. Deeper understanding of the microbiome is forcing scientists to re-think the broad use of antibiotics, which hammer all kinds of bacteria in the gut.

It’s still hard to say how this knowledge will be translated into products, but startups like Cambridge, MA-based Seres Health, South San Francisco-based Second Genome, Cambridge, MA-based Vedanta Biosciences, and South San Francisco-based AvidBiotics have all gathered some decent backing to go after a variety of new applications. Some entrepreneurs are experimenting with ideas of “live bacterial” cocktail drinks, which theoretically could restore balance in the microbiome. “It’s redefining what is a therapy,” said Paul Burke, a Cambridge, MA-based scientific consultant to startups and large biopharma companies.

Messenger RNA therapeutics. Quite a few companies have spent years developing drugs designed to work at the level of RNA, and disrupt the processes that create disease-related proteins. But Cambridge, MA-based Moderna Therapeutics broke onto the scene this year with a new idea for making messenger RNA therapies. These messenger RNA molecules carry the instructions for making proteins, which can take the form of enzymes, growth factors and other 3-D molecules that carry out most human bodily functions. The Moderna mRNA molecules are designed to be injected, get inside cells, and to stimulate the cellular machinery to make proteins that scientists know have therapeutic value. In theory, it’s another way of making insulin for diabetes, or erythropoeitin for anemia. Part of the trick is to make these drugs so they somehow don’t get immediately chewed up by enzymes in the body, and don’t provoke an immune defense reaction.

Moderna, which only emerged from stealth mode a year ago, has raked in an incredible $415 million in private equity investment, government support, and partnership dollars from AstraZeneca. The company has a long way to go on its drug development odyssey. It hasn’t even yet entered clinical trials. Moderna excites people because it represents the possibility of a whole new platform for drugmaking, which theoretically could sidestep much of the expense and hassle of biologics manufacturing.

Gene editing. This idea that you can “edit out” genetic abnormalities to strike at disease at its roots is still taking me some getting used to. As my colleague Ben Fidler wrote in a story about Cambridge, MA-based Editas Medicine, “Editas’ goal is to essentially target disorders caused by a singular genetic defect, and using a proprietary in-house technology, create a drug that can ‘edit’ out the abnormality so that it becomes a normal, functional gene—potentially, in a single treatment.” This company has corralled $43 million in its Series A investment from three big VCs in Boston biotech: Polaris Partners, Third Rock Ventures, and Flagship Ventures. Read Ben’s story for more of the details on Editas.

The Trough of Disillusionment

Consumer genetic testing. Mountain View, CA-based 23andMe, the company with a big idea for connecting consumers with their genetic data, is stuck in the penalty box with the FDA. 23andMe looked pretty foolish in the eyes of many savvy observers this fall when the agency issued a stern warning letter. The FDA told 23andMe to stop marketing its Personal Genome Service to consumers based on its ability to help people manage their health. The company hasn’t done the kind controlled clinical trials the FDA considers necessary to support those claims under federal law. 23andMe looks especially silly for cutting off communication with the FDA several months ago, then deciding to launch an all-out consumer marketing blitz with a goal of getting 1 million customers for its $99 test. Truth is, 23andMe and the FDA are both entering some murky, uncharted waters, and both parties need to find their way forward. Over time, consumers are going to want to take some control over their genetic information, and that means a new kind of regulatory framework will need to be put in place. It just might take a few years. Whether it’s 23andMe, or some other company that figures it out, we’ll just have to see.

Companion diagnostic tests. Remember when Pfizer won FDA approval of crizotinib (Xalkori) for the small percentage of lung cancer patients with mutated ALK genes? The drug was approved alongside a companion diagnostic test that helped oncologists select which lung cancer patients had the gene variation that made them good candidates for the drug. A similar drug/diagnostic story played out around the same time in 2011 with Roche/Daiichi Sankyo’s vemurafenib (Zelboraf) which was approved for use in BRAF-positive melanoma patients. Two years later, I haven’t seen many other stories like this, and some of the more exciting drugs are coming forward without companion diagnostics. There are challenges in getting different development teams, with different deadlines, budgets, and profit motives, all rowing together in the same direction for a drug and diagnostic. But this remains a powerful idea, as healthcare reform is putting more pressure on everyone to squeeze the waste out of the system.

RNA therapies for Duchenne Muscular Dystrophy. Patients and their families with Duchenne Muscular Dystrophy have never seen so much hope, and disappointment, in one year. Cambridge, MA-based Sarepta Therapeutics (NASDAQ: SRPT) and Netherlands-based Prosensa (NASDAQ: RNA) both offered patients a prospect that RNA-based therapies might provide a means to help them produce more dystrophin to make their muscles work. Prosensa went public earlier in the year on excitement for its data, then promptly failed in a pivotal clinical study. Sarepta has gathered some encouraging data from a small study of 12 patients, and said in July that it planned to seek accelerated approval from the FDA on the basis of that study. But before the year was out, spooked by the Prosensa failure, the FDA told Sarepta such an application on a thin data set would be premature. Unless Sarepta can pull an amazing reversal, it is likely at least a couple more years away from reaching the market, if it ever gets there.

GSK’s malaria vaccine. GlaxoSmithKline has spent more than $300 million on developing a vaccine for malaria called RTS,S. The Bill & Melinda Gates Foundation has keen interest, and has put a lot of money to work here in a program that could theoretically save millions of lives in the future. Yet, as more follow-up data rolls in, the vaccine is disappointing, offering protection to fewer than half of infants who get vaccinated. Most of the great vaccines we take for granted today protect more than 90 percent of people from infection. One can only hope that researchers learn something from the RTS,S experience that can be applied to something that boosts the protection rate much higher.

Stem cell therapies. It was 15 years ago that University of Wisconsin biologist James Thomson made the cover of Time for his work in cultivating the first lines of human embryonic stem cells. It was exciting, opening the door to regenerative medicines, and it triggered a long-running bioethics debate. Two years have now passed since stem cell trailblazer Geron dumped its stem cell therapy intellectual property, including a program to treat spinal cord injury. This year, Madison, WI-based Cellular Dynamics International—a company co-founded by Thomson—went public. It has had success with creating a newer generation of induced pluripotent stem cells that can be used to help test experimental drugs in the lab. That’s great news for drug developers, who need more predictive models to increase the chances of success in human clinical trials. But are stem cell-based therapies helping paraplegics get out wheelchairs and walk again? Not even close.

Nanopore DNA sequencing. Oxford Nanopore wowed the genomics world almost two years ago with what looked like the next big thing in superfast, supercheap DNA sequencing technology. We’re still waiting for someone to deliver on the promise, who can combine speed, low cost, and accuracy.

Climbing up the Slope of Enlightenment

RNA interference, via subcutaneous delivery. Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY) has been carving out its position as the leader in RNA interference drug development for years. It entered “peak expectations” in 2006-2007 when scientists won the Nobel Prize for the underlying discoveries, and pharma companies wrote a whole bunch of big checks. Then, everybody realized that small interfering RNA molecules were extraordinarily difficult to deliver where they needed to go inside cells. Alnylam fell into the trough of disillusionment, particularly when its big partner, Roche, walked away. Alnylam had to cut back.

This year, Alnylam showed it was able to deliver siRNA molecules through a convenient subcutaneous injection right under the skin—the kind that’s convenient for patients with chronic diseases. The subcutaneous form was able to knock down more than 80 percent of a disease-related protein called TTR in patients with TTR amyloidosis. Alnylam shares bounced back. Now, it’s true that most RNAi compounds still end up getting metabolized through the liver, making it difficult to deliver to other tissue types. But it was a big step ahead. “I think the Alnylam SC delivery was important along with their transformation into a products based company,” said Houston, the oligonucleotide consultant. “This was the year the RNAi-based therapeutics proved to the world that they are commercially viable for liver diseases. Equally important was Arrowhead R&D’s DPC delivery technology and Hepatitis B program.”

Antisense oligonucleotides for neurology. Carlsbad, CA-based Isis Pharmaceuticals has carried the torch for antisense therapeutics for 25 years, and still has plenty of critics. But Biogen Idec agreed to pay $100 million upfront to Isis this year for its oligonucleotide-based approach against certain neurological conditions, after liking what it saw from this approach to treating spinal muscular atrophy. “If you look at spinal muscular atrophy and a couple preclinical programs, it’s super exciting,” Burke said.

Gene therapy. The idea of using modified viruses to shuttle genes inside cells, to replace missing or faulty genes, burst onto the biomedical scene more than 20 years ago. Cures were on people’s minds, not disease management. Yet, in 1999 Arizona teenager Jesse Gelsinger died in a gene therapy clinical trial, a tragedy that set the field back for years. Netherlands-based UniQure won European approval for a gene therapy in late 2012, but still, we have no FDA-approved gene therapy.

But, but, but. Some scientists never gave up, and this year was the year gene therapy started climbing out of the trough of disillusionment. Cambridge, MA-based Bluebird Bio (NASDAQ: BLUE) went public on the strength of gene therapy for rare diseases. That success helped inspire investors to back other new companies like San Francisco-based Audentes Therapeutics and Paris-based GenSight Biologics.

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3 responses to “What Was Hyped, and What Fell Out of Favor, This Year in Biotech”

  1. Theral Timpson says:

    Hey Luke, nice run down and explanations on the technical side.

    To your Expectations list, I’d add tools that are enabling single cell genomics, for instance, the C1 launched by Fluidigm this year. These tools are giving researchers (such as those working on T cell immunotherapy) the ability to hone in on each cell. Though we think of T cells (or other kinds of cells) as all being the same, it turns out various T cells perform different functions, and until now the tools were not available to distinguish between them.

    In another vein, congrats on the Wisconsin office. All the best in 2014!

  2. David Berry says:

    This is a great run down of biotech innovations from 2013
    and it is exciting to see several of Flagship’s innovative companies
    highlighted. While susceptible to Gartner’s “Hype Cycle”, biotechnology innovations
    face additional uncertainty due to the complexity and diversity of human
    biology in addition to regulatory requirements for safety and efficacy which
    uniquely delay the time from innovation to true success – delivering on the
    promise of improving the lives of patients. To this end, companies such as Seres,
    Moderna, and Pronutria (all recently launched from Flagship’s innovation
    foundry, VentureLabs) have been founded and built not just to deliver
    disruptive innovation, but also to significantly reduce the time and risk in bringing
    therapies to patients.

  3. Dieter Hovekamp says:

    To be part of Science magazine’s 2013 “Breakthrough of the Year”: Cancer Immunotherapy, is a great honor for Medigene spinouts Adaptimmune & Immunocore.

    Your brilliant reference to Gartner’s “Hype Cycle” could not be better verified as in the history of these two companies (see http://www.immunocore.com/our-company/history/ )

    Almost 15 years after leaving the research labs of the University of Oxford, for one of the two, the “plateau of productivity” has come true in 2013 with two big deals for their growing number of 20 target programs in cancer and other serious diseases – each valued more than double that of the whole series A funding of newcomer Juno.

    After Roche/Genentech and Glaxo SmithKline in 2013 now AstraZeneca/MedImmune joined Immunocore to profit from their long way through the cycle and start a new one for each drug project chosen.