Gene Therapy II

Today’s Boston Globe reports that venture capitalists are starting to invest in gene therapy companies again. The first companies were founded in the mid to late 1980s and failed about 5 years ago. The death of teenager Jesse Gelsinger in a U Penn clinical trial in 1999 started to bring the first era of gene therapy to an end.

The new companies, Applied Genetic Technologies (AGTC), Ceregene, Celladon, Genetix, and Introgen Therapeutics hope to learn from the mistakes of their predecessors. They are improving delivery technologies and being less ambitious on the diseases they target, focusing, for example on diseases that are caused by a single gene. (The Globe article cites my former LEK Consulting colleague Chris Ehrlich of InterWest Partners, which funded AGTC.)

Gene therapy is not the only example of a biotechnology to begin with great hype, disappoint investors and patients, and eventually return to prominence in a new and improved way. A close analogy is monoclonal antibodies.

The first monoclonal antibody was produced in 1975. In the late 1970s and early 80s many articles in the popular press referred to monoclonals as “magic bullets.” The first monoclonal antibody was approved by the FDA in 1986, but then nothing else was approved for eight years. Many clinical trials for cancer failed from 1983 to 1993, and it was only in the late 1990s, after the technology advanced from mouse based to humanized antibodies that antibody based drugs began to fulfill some of their promise. Only now are monoclonal antibodies becoming a significant commercial success.

I hope that gene therapy will work in this investment cycle. If monoclonals are a guide, however, it may take a third round. In 1989, the Wall Street Journal ran an article about how the problems of the original monoclonals had been solved, and proclaimed that, “The long awaited era of magic bullets may now be imminent.” But they were about 10 years too early.

April 4, 2005

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