Challenges of Promising DNA and RNA-based Therapies
In a recent article, our team reviewed the growing promise of DNA and RNA-based therapies. Although prospects are limitless, as investors, we need to consider the inherent challenges facing scalability and widespread adoption of such technologies.
Targeted delivery of DNA/RNA payloads requires proper packaging — apart from ASOs — with (1.) lipid nanoparticles and (2.) adeno-associated viruses being the most commonly used modalities. While these technologies have significantly advanced the DNA/RNA therapeutics space, there are limitations to their use, which have so far impacted investment appetite. Primarily, these technologies will need to achieve broad applicability.
In the context of this article, we look at challenges from the lens of achieving either manufacturing efficiency/scale, enhanced payload capacity, or both. While achieving manufacturing scale will make it feasible to use such methodologies regardless of patient group size — ultra-rare, to rare, to prevalent disease — genetic material length will make it possible to treat complex disorders, from large gene targets to polygenic conditions.
1. Lipid nanoparticles (LNPs)
LNPs exhibit significant potential as therapeutic nanocarriers, generating substantial interest, particularly in the pharmaceutical industry. However, challenges in scaling up nanomedicine production using traditional manufacturing approaches hinder their clinical development. High costs associated with commercial manufacturing further impede the seamless transition from laboratory research to clinical application.
In 2021, only 40 of the 538 in vivo genomic medicine assets (encompassing gene addition or replacement, gene expression control, gene editing, and DNA/RNA vaccines) were administered using LNPs. With most progressing through Phase I clinical trials, only three assets have been commercially approved to date — Onpattro, the siRNA drug developed by Alnylam, and both COVID-19 mRNA vaccines. While some immune reactions have been reported, in part due to the PEG component added to enhance the systemic circulation of the vaccine, LNPs showed a good safety profile attributed to their inert lipid membrane.
LNPs provide a promising solution that can deliver large payloads, exhibit low immunogenicity, enable manufacturing scalability, and eliminate many of the challenges associated with cell culture production of viral delivery systems. However, there are still hurdles to overcome. To be clinically relevant, LNP-based therapies must be produced through techniques that ensure stability during storage, compatibility with sterilization, quality control, and regulatory compliance. These factors are crucial to the successful development and translation of LNP-based therapeutics for clinical applications.
2. Adeno-associated viruses (AAVs)
AAVs are the most widely used method for delivering DNA to cells. From 2021 to 2022, a 37% increase (from 341 to 466) was reported in the number of DNA-based therapies using AAVs as a delivery vehicle. Until June 2021, 26% of clinical trials using AAV-based therapies were done in ophthalmology indications, followed by metabolic (20%), neurological (17%), and haematological (14%). With the majority in preclinical development, six assets were commercially approved for rare diseases that lack available treatments, such as Leber Congenital Amaurosis (Luxturna — Spark Therapeutics/Roche), Hemophilia A (Roctavian — BioMarin), and Duchenne Muscular Dystrophy (Elevidys — Sarepta Therapeutics).
The approval for Elevidys shows that targeting complicated diseases is possible. As more AAV-based therapies are approved, and more safety data becomes available, we expect more treatments to receive accelerated FDA approvals, similar to Sangamo Therapeutics’ α-Gal A program in Fabry’s Disease.
Although there is no clear leader in the AAV-based therapy space, Roche, Novartis, and Alexion (AstraZeneca) are some of the main companies deploying capital to get ahead. In the last 4 years, these companies closed deals amounting to more than $17 billion.
Payload size
Both AAVs and LNPs are constrained from a payload size perspective, which limits the range of treatable diseases.
Three pre-clinical companies and one clinical company actively developing solutions to address this challenge are AAVantgarde Bio, SpliceBio, Akouos, and Vector Biopharma.
AAVantgarde Bio is working on two technologies that use protein splicing to reduce the gene sequence while maintaining the “fully functional” protein. With this, they aim to treat previously untreatable diseases, such as Usher syndrome type 1B and Stargardt disease.
SpliceBio is also developing protein splicing by getting two AAV-expressed proteins recombining into a larger protein. This would allow a bigger payload capacity by using a two-AAV delivery system.
Interestingly, Akouos has already reached clinical proof of concept for the treatment of otoferlin-led deafness using two gene payloads delivered by two AAVs. Demonstrating that these two cargos can recombine and deliver a clinically active gene (otoferlin).
It remains to be seen if Vector Biopharma will be successful with another approach, i.e. to create more capacity in a single AAV by developing larger particles based on adenovirus. The objective for all these technologies is the same: deliver larger payloads.
Expensive manufacturing
One of the most significant hurdles for LNP and AAV-based therapies is the manufacturing process, particularly when considering scalable production.
- For LNPs, the high costs are associated with the availability of GMP reagents (e.g. 5’ capping enzyme and lipids), keeping physical (temperature, flow rates, and ratio of lipids) and aseptic conditions.
- For AAVs, high manufacturing costs stem from production complexity (cell culture types, transfection, and purification steps).
Due to the lack of industry-wide standardization, future decisions that need to be made for production systems and downstream processing will crucially determine the costs.
The broader application of viral-vector-based gene therapies (for example, to more common diseases) requires higher yields and lower cost of goods (COGS). For example, during the production phase of AAVs, the size of the operation will determine the type of culture. It is common to have up to 95% of empty capsids, but at scale, 50% should be achieved. Likewise, in the downstream processing phase, more than 80% of the virus is lost. Given these difficulties, the virus yield remains quite low, also considering the additional quality assurance controls that further reduce the size of clinical batches.
As the balance between the addressable market and the cost of therapy drives investor interest, biotech companies shift attention from rare diseases toward developments in non-rare indications. This brings forward a critical consideration: building in-house manufacturing or outsourcing production. While the former seems to be more applicable for larger companies who want to develop proprietary production systems and enable lower COGS at scale; the latter has been shown to enable access to expertise which can be valuable in a competitive market and lowers the capital requirements, being especially relevant for smaller companies.
The cost hurdle and Health economics
The adoption of DNA/RNA-based therapies is influenced both by the list price and the duration of a treatment’s response.
For example, Zolgensma, a one-time injection of an AAV-based DNA therapy, has a list price of $2.1 million. In contrast, Keytruda, a two-year monoclonal antibody treatment injected every six weeks, can add up to $385,000. With a one-time therapy that cures a disease, patients are essentially “buying” health, while with years-long therapy patients “rent” health. Due to the high list prices, access to these therapies without reimbursement (primarily driven by health economics, particularly the quality-adjusted life years — QALYs) is very limited.
When it comes to treatments such as Zolgensma, it has been calculated that even at $5 million, it would still be cost-effective. This is primarily due to the 15.65 QALYs (over the 5.29 of Spinraza), and the decreased burden to the healthcare system associated with the reduction of “recurrent” patients. In rare diseases, the improvement in the quality of life for patients is even more impactful due to the lack of available treatments.
We believe that new pricing models, particularly value or outcome-based, will drive a change in the industry, both from a payor and patient perspective.
Lyfegen is a company that is addressing this particular problem. By standardizing and optimizing contracts between pharmaceutical companies and healthcare payers, they aim to assist patients access these therapies under value-based contracts.
As health economics become more favourable, investment appetite will grow. In an industry such as DNA/RNA-based therapies, which holds significant potential, as investors begin to witness tangible evidence of translatability into larger patient populations, this transformation will reshape healthcare and stimulate investment interest.
References
https://www.nature.com/articles/s41596-022-00755-x
https://frederick.cancer.gov/news/biotech-connector-next-generation-vaccine-formulation-and-delivery
https://www.csrwire.com/press_releases/761361-promise-rna-based-therapies
https://www.nature.com/articles/d41586-023-01389-z
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8725676/
https://pubmed.ncbi.nlm.nih.gov/33708361/
https://www.exeleadbiopharma.com/news/the-rise-of-lipid-nanoparticles
https://www.nature.com/articles/d41573-023-00002-2
https://www.susupport.com/knowledge/mrna-lnps/lipid-nanoparticles-mrna-delivery
https://www.lek.com/sites/default/files/PDFs/viral-gene-therapy_v3.pdf
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