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With $100M MeiraGTx Deal, J&J Signals Bigger Move Into Gene Therapy

Xconomy New York — 

Gene therapy has come of age over the past few years. And Johnson & Johnson this morning gave its biggest signal yet that it wants in on the emerging field.

J&J (NYSE: JNJ) has inked a deal with MeiraGTX (NASDAQ: MGTX) to grab rights to a group of experimental gene therapies for inherited forms of vision loss. Specifically, J&J will pay MeiraGTX, of London and New York, $100 million in cash up front to get ahold of treatments for genetic forms of achromatopsia and X-linked retinitis pigmentosa currently in early-stage clinical trials. The pharma giant will also get exclusive options to join the development of other preclinical treatments for different types of inherited vision loss. The two also plan to work together to develop better gene therapy manufacturing capabilities.

MeiraGTx could get up to $340 million in additional downstream payments if the programs progress, plus royalties on sales if they reach the market. J&J is footing the bill for clinical development.

The agreement marks J&J’s biggest foray into gene therapy to date. Last January, it formed an alliance with the University of Pennsylvania to use gene therapy tools to deliver Alzheimer’s disease drugs. Then, in October, it cut a small research deal to access technology MeiraGTx is developing that is meant to control the expression of a gene therapy—a one-time, long-lasting treatment. With today’s deal, J&J is signaling an intent to “deepen…our expertise in gene therapy,” Mathai Mammen, the head of its Janssen Research & Development division, said in a statement.

The deal comes at a time in which gene therapies have, at long last, made their way to the U.S. markets. In 2017, the FDA approved the first treatment to fix a faulty gene with a patient’s body— voretigene neparvovec (Luxturna), from Spark Therapeutics (NASDAQ: ONCE), for a rare form of inherited blindness. Another, known as Zolgensma, from Novartis (NYSE: NVS), could be approved in the U.S. this year, for the rare disease spinal muscular atrophy. And others are making clinical progress in blood diseases like hemophilia and beta-thalassemia, rare disorders such as Duchenne muscular dystrophy, and more. Two gene therapies were approved earlier in Europe.

These developments are the culmination of decades of scientific research on how to effectively and safely deliver genes to cells. Gene therapies shuttle DNA material into the body, typically with the help of an engineered virus, to help the body produce a critical protein—in perpetuity, theoretically. In hemophilia patients, for instance, experimental gene therapies help people make proteins that clot blood. Luxturna helps patients produce a protein that makes light receptors work in the eye.

The U.S. healthcare system is just beginning to grapple with how to cover the costs of these high-priced, one-time, long-lasting treatments. Spark launched its gene therapy, which costs $425,000 per eye, with a deal in place with insurer Harvard Pilgrim Health Care that includes rebates tied to the drug’s durability. Novartis and Bluebird Bio (NASDAQ: BLUE), two of the companies next in line with emerging gene therapies, have publicly discussed potential multi-year payment plans tied to performance—known as value-based agreements, or VBAs. But there are barriers to broader use, like “Medicaid best pricing,” a policy that requires drugmakers to give state Medicaid programs the best price given to other purchasers.

Just this week, Senators Bill Cassidy (R-LA) and Mark Warner (D-VA) introduced the Patient Affordability Value and Efficiency Act, which is meant to lower existing legal barriers to VBAs.

Here’s more on gene therapy and some of the other programs heading toward FDA review.