Orchard Therapeutics prunes jobs to refocus priorities on bigger fruit
In 2018, Orchard Therapeutics secured access to GSK’s pioneering gene therapy for “bubble boy syndrome,” Strimvelis, among a basket of other rare disease programs, after the big British drugmaker decided the slate of drugs was too niche for its arsenal of treatments. Now, Orchard has also elected to steer away from “ultra-rare” diseases to programs focused on more prevalent conditions.
The strategic shift, which also includes halting construction of a Fremont manufacturing facility and shuttering its California R&D facility, has triggered a 25% cut in the company’s workforce.
“In our view, the new business plan represents a smart reprioritization of its commercial strategy to focus on higher yield opportunities and conserve cash. This should remove any need for near-term financings,” Cowen’s Yaron Werber wrote in a note.
The London, Boston, and San Francisco-based biotech — which went public in 2018 in a bumper $200 million IPO — has a portfolio of ex vivo gene therapies, in which a patient’s stem cells are extracted and tweaked outside the body before being transplanted back in, with the aim to treat a variety of rare immune and metabolic diseases. Founder and now chief Bobby Gaspar was heavily involved in the development of these hematopoietic stem cell gene therapies, bringing them from some of the first studies in patients to potential regulatory approvals.
GSK took a nearly 20% stake in Orchard in 2018, in return for Strimvelis and other gene-therapy programs. Strimvelis was one of the few approved gene therapies in 2016, but uptake in the rare patient population for adenosine deaminase severe combined immunodeficiency (ADA-SCID) had struggled — the therapy had only been used in a handful of patients by 2018. In its IPO prospectus, Orchard had stressed that the therapy’s product revenue would not be enough to make the company profitable. Besides, Orchard was also developing its own ACA-SCID gene therapy, OTL-101.
On Thursday, Orchard said it was reducing investment in OTL-101 and OTL-300 (its transfusion-dependent beta-thalassemia program) — to pour its resources into its programs for metachromatic leukodystrophy (OTL-200), Wiskott-Aldrich syndrome (OTL-103), Mucopolysaccharidosis type I (OTL-203) and Mucopolysaccharidosis type IIIA, also known as Sanfilippo syndrome type A (OTL-201). The company also unveiled two new preclinical programs in frontotemporal dementia and Crohn’s disease.
Orchard’s US application to market OTL-200 may be delayed, the company indicated on Thursday, as the FDA has raised questions about the clinical endpoints used, natural history data and chemistry manufacturing and control data. The drugmaker plans to engage with the FDA this year to remedy these hiccups before making its submission, it said.
“As EMA raised similar questions about the clinical data for OTL-200, management is hopeful that they have the data that FDA is requesting. However, as the meeting with the FDA is unlikely to occur until some time in H2:20, we anticipate that the BLA filing will get delayed,” Werber wrote.
If a new phase I/II study is required, the BLA filing could be delayed, he said, postponing his expected launch to 2024 from 2022.
Orchard’s cash, cash equivalents and investments as of March 31 were $263.9 million. The reorganization announced on Thursday, which generated cash savings of approximately $125 million through the end of 2021, will extend the company’s ability to keep the lights on into 2022.
Social: Bobby Gaspar, Orchard CEO (Royal College of Paediatrics and Child Health, YouTube)