Innovation holds the key in the pharma/biotech sector and most companies have been diverting their resources to develop gene therapy candidates in their goal of finding a cure for difficult and incurable diseases. In the first half of 2018, most pharma/biotech bigwigs and also a number of smaller companies scurried for a lucrative catch in the space either through licensing deals or acquisitions. 

In particular, the FDA approval in December 2017 of Luxturna, a new gene therapy for the treatment of children and adult patients with an inherited form of vision loss that may result in blindness, sparked interest in the space. 

What is Gene Therapy?

Gene therapy enables to mitigate the adverse effects of a malfunctioning disease-causing gene. The therapy intends to add a functional gene in a person's system, replacing the malfunctioning one to cure diseases. The gene is delivered to a cell though a carrier known as a vector. The therapy has a different approach from the traditional drug therapies as the underlying cause can be treated with it, unlike symptoms.

Gene therapy is set to become one of the most promising spaces in the volatile biotech sector, which continues to grapple with competitive pressure and pricing woes. The promising therapy is being evaluated for varied diseases such as hemophilia, Duchenne muscular dystrophy (DMD), Parkinson's disease and cancer among others.

Recent Activity in the Space

The year started with the acquisition of AveXis, Inc by Swiss giant Novartis (NVS - Free Report). AveXis’ lead product candidate, AVXS-101, is being evaluated as a one-time gene replacement therapy for spinal muscular atrophy, a disease that results in early death or life-long disability with considerable healthcare costs. Novartis is trying to develop a gene therapy portfolio. In January 2018, Novartis signed a license and commercialization agreement for the development and commercialization of voretigene neparvovec (brand name Luxturna in the United States) outside the United States with Spark Therapeutics.

Thereafter, this space has seen a lot of activity. Pfizer (PFE - Free Report) initiated a phase Ib clinical trial for its mini-dystrophin gene therapy candidate, PF-06939926, in boys with DMD. Solid Biosciences (SLDB - Free Report) too was in the news recently after the company announced that the FDA had lifted the clinical hold on lead candidate, SGT-001, a microdystrophin gene transfer evaluated for the treatment of DMD. The FDA recently granted Regenerative Medicine Advanced Therapy (RMAT) designation to Voyager Therapeutics’ VY-AADC gene therapy treatment for Parkinson’s disease in patients with motor fluctuations that are refractory to medical management.

Stocks to Watch Out For

Given the potential the market holds, a number of companies have started to develop the therapy with several of them having promising candidates in their pipeline.

Axovant Sciences (AXON - Free Report) is one such company, which has been steadily developing its pipeline of candidates using gene therapy through licensing deals. The company is focused on developing its gene therapy product candidate, AXO-Lenti-PD, as a one-time treatment for Parkinson’s disease.The company intends to begin a phase I/II study of AXO-Lenti-PD in advanced Parkinson’s disease patients before the end of 2018.The company recently announced a licensing agreement with Benitec Biopharma. Axovant licensed exclusive global rights to an experimental Silence-and-Replace gene therapy program from Benitec Biopharma for the treatment of oculopharyngeal muscular dystrophy (OPMD). Axovant will obtain rights to AXO-AAV-OPMD, which will utilize proprietary Silence-and-Replace technology. AXO-AAV-OPMD is an adeno-associated viral (AAV) vector gene therapy delivered via a one-time intramuscular administration, which silences the mutant PABPN1 gene and replaces it with a functional copy. It is currently in preclinical development stage. Axovant plans to initiate a placebo-controlled clinical study in 2019.

Axovant’s stock has gained 25.8% in the last six months against the industry’s decline of 5%. The company currently carries a Zacks Rank #2 (Buy).

uniQure N.V. (QURE - Free Report) is another promising player in the space. It is creating a pipeline of innovative gene therapies that have been developed both internally and through its collaboration, focused on cardiovascular diseases, with Bristol Myers-Squibb.

The company has already enrolled its first patient in phase III HOPE-B pivotal study of AMT-061, an experimental AAV5-based gene therapy incorporating the FIX-Padua variant for the treatment of patients with severe and moderately severe hemophilia B. The company has obtained orphan drug designation for AMT-130 for the treatment of Huntington’s disease in the United States and the European Union and holds global commercialization rights of the program.

uniQure too currently carries a Zacks Rank #2. uniQure’s stock has moved up 115.7% in the last six months against the industry’s decline.

Audentes Therapeutics (BOLD - Free Report) is another biotechnology company with a promising pipeline of innovative gene therapy products for patients living with rare diseases.The company is currently conducting phase I/II studies for its lead product candidates — AT132 for the treatment of X-linked myotubular myopathy (XLMTM) and AT342 for the treatment of Crigler-Najjar syndrome.The company currently has two additional product candidates in development, including AT982 for the treatment of Pompe disease and AT307 for the treatment of the CASQ2 subtype of catecholaminergic polymorphic ventricular tachycardia (CASQ2-CPVT).Last month, the European Medicines Agency (EMA) granted Priority Medicines (PRIME) designation to AT132 for the treatment of XLMTM.

Audentes currently carries a Zacks Rank #2. Shares have gained 2.8% in the last six months.