Novartis just handed out a $8.7 billion endorsement for new therapies that are changing how we treat genetic diseases

  • Novartis is acquiring gene therapy company AveXis for $US8.7 billion.
  • AveXis is working on a gene therapy for spinal muscular atrophy, a rare genetic condition that affects muscle movement in children and is the leading genetic cause of mortality in infants.
  • It’s part of a wave of big bets in gene therapy, a cutting-edge area of science that has had some big advancements over the past year.

Novartis said on Monday that it’s acquiring rare disease drugmaker AveXis for $US8.7 billion.

AveXis is working on a treatment for spinal muscular atrophy (SMA), a rare genetic condition that affects muscle movement. It’s the leading genetic cause of infant mortality. The deal’s part of a wave of big bets in gene therapy, a cutting-edge area of science that has had some big advancements over the past year.

In 2016, the Food and Drug Administration approved the first drug to treat SMA, called Spinraza. The drug, which works to slow down the progression of the disease, is not cheap, carrying a list price of $US750,000 for the first year of treatment.

Even with the treatment, there’s been interest in seeing if – because the disease is genetic – there are ways to potentially cure it using a gene therapy that helps the body make a key protein needed for motor neuron function, something people living with SMA don’t produce enough of. That’s what AveXis is working on.

The Novartis deal puts pressure on Biogen, which makes the current treatment for SMA, Spinraza. “The acquisition puts the competing SMA program in the hands of a well-funded, payer-competent, global-reaching company,” Bernstein analyst Ronny Gal said.

The exploding field of gene therapy

It’s been a big couple of years for gene therapies. In December 2017, the FDA approved the first gene therapy, made by Spark Therapeutics, which is used to treat a hereditary form of blindness. Earlier in the year, the FDA approved the first cell therapies for cancer treatment, starting with Novartis’ Kymriah. The FDA referred to the treatment as “the first gene therapy available in the United States.”

“New Novartis CEO Vas Narasimhan seems to be on the hunt for gene therapy,” Jefferies analyst Michael Yee wrote in a note on Monday. In January, Novartis also made an agreement with Spark for rights to its gene therapy for hereditary blindness outside of the US. “Novartis is building a formidable commercial division in cell and gene therapy.”

Novartis isn’t the only big pharma/biotech to be interested in gene and cell therapies. In January, Celgene made a $US9 billion bet on Juno Therapeutics, a cancer drugmaker that’s working on cell therapies. The deal also drummed up excitement for a possible deal for Bluebird Bio, another company developing cell therapies that has partnerships with Celgene. Bluebird is working on gene therapies in addition to cell therapies.

While there have been some major successes, the field of gene therapy still has had its setbacks. In March, Solid Biosciences, a biotech working on a gene therapy for muscular dystrophy, said its trial had been placed on clinical hold by the FDA, meaning the trial has been paused for now.

But as more gene therapy products make their way to approval and the science keeps progressing, Bernstein analyst Vincent Chen wrote in a note Monday, it’s likely we’ll see more major pharmaceutical companies getting interested in the space. “Today’s announcement bodes well for this and should be a positive for others in the space,” Chen said.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.