Goldman Sachs analysts have attempted to tackle a sensitive issue for biotech companies, particularly those involved in pioneering “gene therapy” treatment: treatment could be detrimental to long-term companies.
“Treating patients is a sustainable business model?” analysts ask in a report of April 10 entitled “The Genome Revolution”.
“The potential to provide” one shot care “is one of the most interesting aspects of gene therapy, genetically modified cell therapy and gene editing, but these treatments offer a very different perspective regarding recurring revenue compared to chronic therapies, “analyst Salveen Richter wrote in the note to customers Tuesday. “Although this proposal has tremendous value for patients and society, it could be a challenge for developers of genomics who are looking for a constant cash flow.”
Richter cited the Gilead Sciences treatments for hepatitis C, which achieved cure rates of over 90%. US sales for these treatments for hepatitis C reached a peak of $ 12.5 billion in 2015, but have since been declining. Goldman estimates that US sales for these treatments will be less than $ 4 billion this year, according to a table in the report.
“GILD is a case in point, where the success of its hepatitis C franchise has progressively exhausted the available pool of treatable patients,” the analyst wrote. “In the case of infectious diseases such as hepatitis C, treating existing patients also decreases the number of carriers able to transmit the virus to new patients, so the pool of accidents also declines … Where an accident pool remains stable ( for example, in cancer) the potential for a cure involves less risk to the sustainability of a franchise. ”
The analyst did not immediately respond to a request for comment.
The report suggests three potential solutions for biotech companies:
- “Solution 1: tackling large markets: hemophilia is a $ 9-10 billion (hemophilia A, B) market, up ~ 6-7% per year”.
- “Solution 2: orientation disorders with high incidence: spinal muscular atrophy (SMA) affects the cells (neurons) in the spinal cord, affecting the ability to walk, eat or breathe”.
- “Solution 3: constant innovation and expansion of the portfolio: there are hundreds of inherited retinal diseases (genetic forms of blindness) … Also the speed of innovation will play a role as future programs can offset the trajectory of diminishing revenue from previous activities “.