How disruptive technologies are changing an entire sector

For companies and investors alike, the innovation potential of the biotech sector over the past two years has been dominated by the development of vaccines and therapies against Covid-19. This importance is now increasingly diminishing. At the same time, the financial markets are focusing more on chronic and serious diseases that affect a larger proportion of the population. Important technological advances that previously focused on the treatment of rare diseases are now being tested more frequently in clinical trials for indications with large numbers of patients. The biotech industry will benefit from this because it is a pioneer in a large number of new therapeutic approaches. Many biotech companies have recently begun to expand their clinical projects from their previous focus on rare diseases to include the treatment of diseases with higher patient numbers. This involves the use of a new generation of technologies with enormous disruptive potential. More and more product candidates not only meet medical needs in indications that were previously almost untreatable, but also promise a complete cure. A number of our portfolio companies are presenting groundbreaking clinical trial results this year.

Moderna's next vaccines soon ready

At Moderna, the results for the Omikron-specific booster vaccine and the mRNA-1010 influenza vaccine are probably the most important events for 2022. A new generation of this mRNA vaccine is expected to be superior to conventional influenza vaccines in terms of efficacy profile and efficiency by including other antigens and virus strains in addition to the four selected by the WHO. If a combination vaccine against influenza and coronaviruses can be successfully launched on the market, the global market for influenza vaccines, which currently provides around 500 million doses per year, could expand significantly, possibly even doubling. Combination vaccines also appeal to people who are skeptical about regular individual vaccinations. Due to the rapid development times and good tolerability of mRNA vaccines, their protagonists Moderna, Biontech and Pfizer would be the big winners of such a breakthrough. As industry experts estimate the prices for such combination vaccines at up to USD 60 per dose, this opens up enormous sales potential. The effectiveness of mRNA technology in influenza is only an intermediate step in Moderna's long-term plans. Moderna currently has three important Phase III trials underway. In addition to the flu vaccine, there is a vaccine against RSV, a serious respiratory infection in infants and young children, and a vaccine against cytomegalovirus (CMV). There are currently no treatment options against this herpes virus, which can cause deafness and developmental disorders in newborns.

Genome editing - technology for billion-dollar sales

Genome editing, which aims to permanently cure diseases, is on the verge of a major commercial breakthrough. This involves cutting out fragments of human DNA that are considered to be genetic triggers of diseases and repairing them with genetic replacements. In cooperation with Vertex Pharma, Crispr Therapeutics is developing therapies for beta-thalassemia and sickle cell anemia. There are currently no adequate treatment options for these two genetic disorders in the formation of blood cells, which cause severe disease progression. Due to a specific genetic predisposition, the severe form of sickle cell anemia is dominant, with around 50,000 patients in the USA. Beta-thalassemia, also known as Mediterranean anemia, on the other hand, is more common in southern Europe, while the severe form occurs in around 1000 patients in the USA. This therapy is a complete cure after a single dose. The market approval of the first drug based on genome editing would revolutionize the treatment of this disease. The pricing power for this product, which only needs to be administered once, is correspondingly high. In the second half of 2022, Crispr and Vertex Pharma will be the first companies to submit approval data and a marketing authorization application. If the product makes it onto the market in 2023 as expected, it could generate annual peak sales in the billions. As genetic engineering methods for drug development, RNA-based therapeutics such as siRNA and ASO (antisense oligonucleotides) have received market approval in niche indications in recent years. The company Alnylam is the leader in siRNA-based drugs and should present clinical results for its already approved product Onpattro in the middle of the year. If successful, the application would expand from 50,000 patients with ATTR amyloidosis and polyneuropathy to up to 300,000 patients with ATTR cardiomyopathy. ATTR is a rare disease in which a certain protein is not broken down in the body and is deposited in organs.

Artificial intelligence creates new foundations

Rational drug design is a novel approach that uses artificial intelligence (AI) and machine learning to analyze the molecular movements of protein molecules with regard to their role in the development of a disease. The company Relay Therapeutics has three cancer drugs in clinical phase I that target disease-causing proteins that were previously not considered accessible targets for therapies. Black Diamond Therapeutics uses machine learning approaches for cancer therapies that work independently of specific tumor types. Thanks to its pioneering role in numerous disruptive technologies, the biotech industry could soon attract the interest of investors again. The figures speak for themselves. While an average of 20 drugs were approved annually in the USA, the world's largest drug market, at the beginning of the noughties, this figure has risen to 58 in 2021. At the same time, in purely quantitative terms, the total number of clinical trials and patients treated is significantly higher than before the start of the pandemic. The importance of biotechnologically produced drugs will continue to increase in the future. According to estimates, biotech products will account for around 40% of total sales of prescription and over-the-counter medicines by 2026. Author: Dr. Daniel Koller joined Bellevue Asset Management in 2004 and since 2010 has been Head Investment Management Team of the BB Biotech AG, an investment company based in Schaffhausen/Switzerland. From 2001-2004 Daniel Koller was an investment manager at equity4life Asset Management AG and from 2000-2001 an equity analyst at UBS Warburg. He graduated in Biochemistry from the Swiss Federal Institute of Technology (ETH) Zurich and holds a PhD in Biotechnology from ETH and Cytos Biotechnology AG, Zurich. Editor's note: BB Biotech AG holds shares in some of the companies mentioned in the text or has them in its portfolio.

This article originally appeared on m-q.ch - https://www.m-q.ch/de/wie-disruptive-technologien-einen-ganzen-sektor-veraendern/