China Inc. Eyes Gene Therapy In Post-Coronavirus Growth Trajectory

BY BRIAN YANG

Executive Summary

Eyeing a largely untapped treatment area and huge patient pool, biotechs in China are leaping into the gene therapy foray despite the lack of a distinct regulatory pathway or reimbursement of the highly costly treatments.

Wuhan, China-based Neurophth Therapeutics, founded by a local physician, recently scored CNY130m ($19m) in its latest round of financing, signalling investor interest in the nascent gene therapy sector in the country.

The first dedicated gene therapy developer in China was set up by ophthalmic specialist Bin Li, who noticed a growing number of people suffering from genetic eye conditions which eventually led to blindness. He was eager to try something new to give patients hope in a country which potentially has the largest number of sufferers globally from rare and genetic disorders.

With some help from Beijing-based Five Plus, a research institute devoted to developing an adeno-associated virus vector, Li founded the company in 2016 and started the first clinical research for its lead

asset, an AAV2-based gene therapy for Leber hereditary optic nephropathy (LHON).

Four years later and this April the company secured its new Series A financing, led by new investors Sequoia Capital China and Fosun Ventures; previous investor Northlight Capital also participated. As a leading gene therapy developer in China, Neurophth came into the spotlight for quickly emerging as the front-runner to test its programs in patients with genetic conditions.

Outside China, two gene therapies have already gained approvals in multiple markets - Zolgensma (onasemnogene abeparvovec) for spinal muscular atrophy from Novartis AG/AveXis Inc. and Luxturna (voretigene neparvovec) for inherited retinal disease from Spark Therapeutics Inc.. These nor other gene therapies have so far been approved in China.

Quick Expansion

Hailed as a potential one-time cure for devastating genetic conditions, gene therapy provides much medical hope, but very few companies in China have taken the leap into the area due to murky regulations and a lack of policy incentives and reimbursement.

Leveraging a large patient population in the country, where an estimated 126,000 people suffer from LHON, Li’s Neurophth has so far enrolled more patients than overseas counterparts, which has investors excited about prospects for the field in China.

“China’s biotech sector is rapidly evolving and domestic gene therapy is only beginning to take off,” noted Guan Feng, a partner at Fosun Ventures. “We believe as the reimbursement kicks in for rare conditions, along with a multiparty funding mechanism led by the government, aided by insurers and philanthropy organizations, gene therapy developers in China have a real opportunity to get into a leading position in the world,” he added.

Neurophth will use the new funding towards its R&D platform for advancing ophthalmology treatments and a GMP-standard manufacturing facility. The company is also growing beyond its base in Wuhan to establish new subsidiaries in Shanghai and Suzhou, while a potential US site is also in the works.

To date, the venture has conducted studies in 152 LHON patients, the largest trial to date in a program that includes patients from Taiwan and as far away as Argentina.

Another potentially benefit for domestic developers in China is a new regulation placing limits on international developers eyeing the market. National regulators last June issued a framework which could pose challenges to the conduct of work with biologics and gene therapies in potentially the most promising market for these emerging technologies.

Companies Moving Forward

The rapid growth potential in China also has other orphan drug developers such as CANbridge Life Sciences Ltd. taking note. The Beijing-based firm, founded by a former Genzyme China executive, recently set up a research program to collaborate with Horae Gene Therapy Center at University of Massachusetts Medical School in the US.

The program is centered on neuromuscular conditions and led by center director Guangping Guo, a key figure in the discovery of adenoassociated virus vectors. CANbridge has added Gao and Mark Bamforth, founder and former CEO of Brammer Bio, to its strategic advisory board.

Another ophthalmology-focused gene therapy developer, Hong Kong-based Reflection Biotechnologies, is developing RBIO-101, an

AAV-based gene therapy for Bietti’s crystalline dystrophy, a rare and progressive retinal degeneration. Founder Richard Yang, formerly an investment banker, started the company after his diagnosis. Under its motto of “for patients, by patients” Reflection Bio in 2018 obtained US FDA orphan drug designation for RBIO-101. Despite the increasing traction for gene therapy in China, analysts still see a need for further financial incentives if more bioventures are to leap into the fray. The general reimbursement challenges facing the sector include an extremely high upfront therapy cost, uncertain efficacy with limited follow-up and inadequate payer financial systems, notes a report from Datamonitor Healthcare.