In this interview, Dr Nafees Malik, Asklepian Consulting (London, UK), explains the stumbling blocks that existing cell and gene therapies have come up against on commercialization and discusses the most important factors in developing a commercially successful cell or gene therapy.  

Dr Nafees Malik

Dr Nafees Malik holds degrees in medicine and surgery from the University of Liverpool (UK), where he completed research on cancer immunotherapy. He read for an MPhil degree in bioscience enterprise at the Institute of Biotechnology and Judge Business School at the University of Cambridge (UK), where he was a member of Corpus Christi College. Dr Malik is also a chartered scientist and a member of the Royal Society of Biology. Furthermore, he has completed the University of Cambridge biopharma pricing and market access strategy program. Dr Malik has practiced as a medical doctor and has held positions in M&A/corporate finance at Barclays Capital (London, UK) and in pharma equity research at Panmure Gordon (London, UK), Lehman Brothers (London, UK) and Societe Generale (London, UK). In addition, he has worked with GlaxoSmithKline (UK) and Pfizer Regenerative Medicine (UK) as well as with the Cell and Gene Therapy Catapult (UK) in economic research and business development. Furthermore, Dr Malik is an honorary lecturer in bioscience enterprise/strategy at the University of Cambridge and he has lectured on the MBA program at Imperial College London (UK).

Please introduce yourself and your firm

I’m originally a medical doctor; after I graduated in medicine, I worked as a physician for a couple of years before completing a master’s degree in bioscience enterprise at the University of Cambridge. Subsequently, I worked in healthcare investment banking and in the pharma industry. For the last 5 years, I have been a specialist and thought leader in the commercialization of cell and gene therapies.

As the founder and managing director of Asklepian Consulting, I focus on the strategic and commercial analysis of cell and gene therapies. That includes both quantitative and qualitative research. For example, I am involved in due diligence to support investment decisions. I evaluate the commercial potential of therapies by looking at what their market would be, the risks associated with the technology, and by analyzing potential competitors. Another aspect I’ve looked at in detail is commercialization strategy. This has involved advising institutions and companies on business plans and business models. I work across academia, biotech companies and larger pharma companies. In addition, I’ve provided thought leadership on the key commercialization barriers that the cell and gene therapy industry faces, and how those barriers can potentially be overcome.

Most recently, I was the lead author of three pivotal papers published on how to optimally commercialize CAR T-cell therapies. In total, I have developed and published five frameworks that cell and gene therapy companies can utilize to maximize their success:

• Reimbursement and adoption of advanced therapies: the 5-C framework (Regenerative Medicine, September 2014)
• Pay-for-performance pricing for a breakthrough heart drug: learnings for cell and gene therapies (Regenerative Medicine, April 2016)
• Customer pyramid framework for CAR T-cell therapies (Drug Discovery Today, October 2016)
• CAR T-cell therapies: formulation-product-proposition framework (Drug Discovery Today, November 2016)
• Commercialization of CAR T-cell therapies: business model spectrum (Drug Discovery Today, January 2017)

Although we have seen the approval of a small number of cell and gene therapies to date, unfortunately none of them has been a commercially profitable product. I believe cell and gene therapies have huge potential in healthcare and to improve the human condition, so my ultimate aim is to help make these ground-breaking therapies accessible to patients to alleviate their suffering and to prolong life.

What advantages does cell therapy have over other treatment options?

Small molecule drugs have traditionally been about symptomatic control of medical conditions. Biologics, monoclonal antibodies, can alter disease pathways to a degree. The real advantage of cell and gene therapies is that they offer the potential for curative treatment. I don’t think it’ll be curative for all conditions across the board but it could be applied, for example, to genetic defects or cardiovascular conditions such as heart failure.

In addition, genetically enhanced immune cells may offer the most effective way to utilize a patient’s own immune system, to either increase immune activity towards disease, for example when treating cancer, or to dampen immune activity in conditions such as autoimmune illnesses (e.g. Crohn’s disease) or after organ transplantation.

Are there any advantages to autologous or allogeneic cell therapies?

When evaluating autologous vs allogeneic cell therapy in terms of commercial potential, you need to weigh-up five factors: immunological issues, patient-centric factors, commercial scale manufacturing, business models and reimbursement potential. I was the lead author on a book chapter comparing autologous and allogeneic therapies where I discuss this question in great detail – see further reading list.

In brief, autologous therapies tick the box in terms of immunological issues. If you take cells from a patient then transplant them back into the same patient after modification/culturing, the potential for immune rejection is pretty low.

Allogeneic therapies will generally be superior in terms of the other four factors: for example, an allogeneic product for a patient will be generated from a cell bank system which has been produced from a healthy donor cell selected precisely for its ‘fitness’ level. Not only will allogeneic cells yield therapy each time, but that therapy will potentially possess higher efficacy. On the other hand, ageing autologous cells from older patients may in the worst case scenario not even yield therapy.

There are cost and logistical problems associated with manufacturing autologous therapies, for example, it may take different lengths of time to manufacture therapy for different patients depending on the starting characteristics of their cells. This will make the manufacturing process for autologous therapies non-uniform and much more difficult to scale-up. On the other hand, given allogeneic therapies will be generated from a cell bank system, their manufacture will be uniform, scalable and relatively cheap. The cost of goods is a key determinant of the minimum price one can charge for a product. Autologous therapies have a higher cost of goods, so they must be priced higher in order to generate a profit, making them less likely to be reimbursed by healthcare payers. The cost of goods for allogeneic therapies is relatively low, so you can charge a lower price and still have a profitable product.

There are two main business models that can be utilized in the cell therapy industry: autologous therapies will use a complicated ‘service-based’ business model, where cells will be harvested from a patient and shipped to a manufacturing center. The generated therapy will then be shipped back to a patient’s hospital ready for administration. Allogeneic therapies will utilize a much simpler ‘off-the-shelf’ business model, where batches of doses will be produced at a manufacturing facility and then shipped to hospitals for use as and when required.

What has hindered more cell therapies from being a commercial success so far?

To date, a small number of cell therapies have been approved in the European Union (EU) and USA. The worrying thing is that none of these have been a commercial success. I believe this is because of three key reasons: First, I think most of the cell therapies that have made it onto the market to date aren’t really meeting a high enough unmet medical need.  For example, a lot of them have been for things like knee cartilage repair, a condition that is not life threatening, but they have still been quite expensive. The bottom line is that there’s only so much healthcare payers and patients are prepared to pay for such treatments, so essentially the price of the therapy exceeds the value it delivers.

Second, even cell therapies that have targeted diseases with a high unmet medical need, such as Provenge, a cell therapy approved for advanced prostate cancer, have commercially failed because they are extremely expensive (Provenge costs US$93,000 per patient), but add on average only a few months to a patient’s life. The cost effectiveness of Provenge became a stumbling block with healthcare payers, physicians and patients. The bottom line is that therapies have not been of high enough efficacy to justify their asking price.

The third reason for the commercial failure of approved cell therapies is that their cost of goods has been far too high; for example, the manufacturing cost of Provenge is so high that its gross profit margin (i.e. percentage of product sales remaining once cost of goods is accounted for) has been unacceptably low.

I believe that for a cell or gene therapy to be a commercial success, it must fulfil the following three criteria:

• Treat a disease which genuinely has a high unmet medical need
• Offer a high level of efficacy, with an acceptable side effects profile
• Have an acceptable cost of goods that paves the way for seeking an acceptable price that will secure reimbursement

A cell or gene therapy can only be considered value for money by healthcare payers, clinicians and patients, and hence ultimately prescribed when these three criteria are fulfilled.

In particular, are there any challenges unique to the UK regulatory system that academic and commercial manufacturers should be aware of?

This is an important question: no-one is really sure what the regulatory system will look like after Brexit. In the past, I would have said probably no, because cell and gene therapies were subject to EU-wide regulation – products were developed as Advanced Therapy Medical Products (ATMPs) and had to go through a centralized regulatory process and received approval for the whole of the EU.

After Brexit, a key question is how will cell and gene therapies be approved in the UK vs EU – I don’t think anyone knows what the final process will look like.

Due to Brexit, a key focus for anyone wanting to commercialize a cell or gene therapy in the UK has to be to determine how closely aligned the UK and EU regulatory processes and data requirements will be. For example, will a company have to run clinical studies in the UK for UK regulatory approval, or will EU studies suffice? Will a company have to work separately with the Medicines and Healthcare Products Regulatory Agency in the UK and the European Medicines Agency in mainland Europe? A crucial question is how much duplicating of work will there be?

Whilst that whole process is being sorted out, companies need to take center stage and help develop the process in a way that will be ‘work’ for them. Many cell and gene therapy companies are relatively small, so they need to be vigilant as they don’t have large amounts of resources to allocate to this issue, but it’s absolutely critical to be influential right now and get the process right.

How do you see the landscape of cell therapies around the world evolving?

There’s a huge amount of research going on in T cell therapies for cancer, so I see products in that area entering the market. I think the knock on impact of this will be more investment in those therapy types that are successful. In short, cell-based cancer immunotherapy promises to revolutionize the treatment of blood and solid malignancies. The other area of note is regenerative medicine, which is basically cell and gene therapies for conditions that are non-oncological in nature, such as cardiovascular conditions, neurological diseases and genetic disorders. For these disease areas, good clinical data is long overdue. Such data, especially from late-stage pivotal studies, could lead to a resurgence of interest in regenerative medicine.

Acknowledgements

• No acknowledgements

Further reading

• Malik NN, Durdy MB. Customer pyramid framework for CAR T-cell therapies in immuno-oncology. Drug Discovery Today, 21, 1563–1565 (2016)
• Malik NN, Durdy MB. CAR T-cell therapies: formulation-product-proposition framework. Drug Discovery Today, 21, 1731–1734 (2016)
• Malik NN, Durdy MB. Commercialization of CAR T-cell therapies: business model spectrum. Drug Discovery Today, 22, 1-4 (2017)
• Malik NN. Pay-for-performance pricing for a breakthrough heart drug: learnings for cell and gene therapies. Regenerative Medicine, 11(3):225-227 (2016)
• Malik NN. Reimbursement and adoption of advanced therapies: the 5-C framework. Regenerative Medicine, 9(5):573-578 (2014)
• Malik NN, Durdy MB. Cell Therapy Landscape: Autologous and Allogeneic Approaches. In: Atala A, Allickson JG (Eds.) Translational Regenerative Medicine. San Diego, CA: Elsevier. p87–106 (2015)
• Malik NN, Allsopp TE, Smith DM. Strategic Alliances, Mergers and Acquisitions in Regenerative Medicine. In: Vertès AA et al. (Eds.) Stem Cells in Regenerative Medicine: Science, Regulation, and Business Strategies. Wiley-Blackwell. p643-664 (2015)