Costs are on the mind of Erik Ostrowski, CFO of AVROBIO. The Cambridge, Massachusetts-based biotech company is working on a drug that holds promise against a disease called Fabry, a lysosomal storage disorder that can cost $14 million over a patient’s lifetime to treat.
The high cost comes from the standard of care. Patients make bi-weekly trips to a clinic for enzyme replacement therapy. The treatment gives patients a missing functional enzyme that regulates the toxic build up of a substance, Gb3, in their cells.
AVROBIO wants to replace these trips with a single dose of a gene therapy using a lentiviral vector or "carrier" that would enable patients to manufacture the enzyme themselves.
Now into a phase 2 trial, with four patients dosed, the results are promising. But Ostrowski’s attention is also on what it costs the company to manufacture the compound. And here a plan the company has put into place also looks promising.
Instead of constructing facilities to manufacture the drug, it’s working with contract manufacturing organizations (CMOs) in several countries to manufacture the drug using dishwasher-sized pods set up in existing clean rooms.
"This has been a focus of the company really from day one," says Ostrowski, who talked about his financial strategy for the company with CFO Dive and in a CFO Thought Leader podcast last year. "The ability to produce gene therapies in a scalable and cost-effective manner has really been a challenge for the industry. So our gene therapy platform, which we call Plato, allows us to produce drug products in a closed and automated system, or pods."
Investors see market potential
Fabry and the other lysosomal storage disorders the company is working on are rare. About 10,000 people worldwide are estimated to have Fabry and about 2,000 have cystinosis, a disease for which the company has a drug in a phase 1/2 trial. The company also has a drug in a phase 1/2 trial for Gaucher disease, which afflicts about 1 in 44,000 worldwide. It's also developing a gene therapy for Pompe, another rare disease.
Despite the limited universe of patients compared to larger disease areas, investors stepped in with $138 million in a capital raise that Ostrowski managed last year, lifting the company’s balance sheet to $206 million at the end of the third quarter.
"There are typically a handful of things healthcare investors look at, one being the market opportunity," he said. "So, in the case of Fabry, the standard of care today is enzyme-replacement therapy. It’s done great by patients but it’s far from a perfect treatment. You need to go to these transfusion centers and even under that therapy, the average life expectancy is lower than it otherwise would be for an unaffected person. So, that resonates with people."
Investors also want to know about the scientific approach the company’s taking, and here the gene-therapy treatment, should it win approval, offers a radically different way to tackle the disease, Ostrowski said.
"The goal is to deliver patients a functional copy of the gene they’re lacking in a one-time treatment, which holds out the promise of slowing the disease progression or maybe even halting it," he said. "The potential to have a one-time curative therapy, we think, offers a great benefit for patients and the healthcare system."
When the company held its capital raise last year, it was shortly after new data from its phase 1 and phase 2 trials came in. The market was favorable at the time, and the results were positive, creating good conditions for reaching out to people about the company.
Ostrowski said he started making preparations for the raise months earlier, pulling together financial data on the company and bringing in lawyers, bankers and others to work with him.
"I think it was the proper preparation along with the favorable market conditions that helped make that capital raise a great success for us," he said. "Your team of bankers and lawyers help you on the fundraising process. Having those pieces in place when business developments and capital market conditions align [helps you] take advantage of the opportunity."
With its Fabry treatment well into its phase 2 trial, the company is laying the groundwork for commercializing the drug in the event the trial results are positive and it wins regulatory approval. No time line is set, but Ostrowski said the company has issued guidance to investors that it plans to dose between eight and 12 people in the phase 2 trial.
"If you wait until the drug’s approved to think about commercialization, you’re way too late," he said. "So, there are things you want to do ahead of that."
Ostrowski said the company’s hired a chief commercial officer and two other people whose job is to be thinking now about next steps. "They’re 'thinking forward about commercialization," he said.
Although regulatory approval can’t be assumed ahead of time, the company’s gene-therapy approach puts it in a good position, because the U.S. Food and Drug Administration’s rules for gene therapy include some elements of flexibility not available for other types of drugs.
"Gene therapy is an interesting area from a regulatory standpoint in that sometimes the regulators will allow you to morph — in this case, a phase 2 study — into a registration study," he said. "But until you’ve had those discussions with the FDA, you can’t be certain. But there is more flexibility."