November 28, 2023 PAO-11-23-CL-02
The cell and gene therapy sector (in the second half of 2023) is characterized by two main challenges: Financing and regulatory uncertainty. The currently prevailing dynamics in capital markets are difficult and primarily driven by microeconomics, which has placed significant pressure on small biopharma companies with respect to fundraising. Such small and emerging biotechs must overcome numerous hurdles to gain access to the funds they need to conduct development programs and to successfully advance products to market.
At the same time, sponsors continue to face regulatory uncertainty and a lack of comprehensive guidance. Contract development and manufacturing organizations (CDMOs) — such as Viralgen Vector Core — have manufacturing platforms capable of supporting multiple programs from multiple clients and are playing a key role in establishing the level of quality needed for the long-term viability of the sector. Additionally, leading viral vector CDMOs are establishing realizable quality targets, as well as longer-term goals which the industry must eventually achieve.
On the other hand, the fundamental scientific foundation of cell and gene therapy is well established and on track to becoming truly exceptional and transformative. The value of adeno-associated viral (AAV) vector–based platforms has been demonstrated. In the last few months, the U.S. FDA approved two AAV-based gene therapy drugs: Roctavian, a gene therapy for the treatment of adults with severe hemophilia A; and Elevidys, for the treatment of ambulatory pediatric patients with Duchenne muscular dystrophy (DMD). Within the current development pipeline, there are several AAV-based candidates in clinical trials that are showing tremendous potential. Moreover, there is growing interest in accessing particular serotypes to enable more precise targeted delivery, which will include both leveraging the native diversity of AAV serotypes and creating novel serotypes by engineering new capsid proteins. CDMOs must be positioned to accommodate these new technologies, not only for manufacturing purposes but also with regard to capacity, as more precise therapies allow dosing adjustments, which can ultimately lead to better cost profiles.
The current high cost to patients of cell and gene therapies is a real and growing concern, presenting challenges not only in terms of reimbursement but also in terms of general accessibility, with prices restricting many of the already underserved patients that these therapies are designed to help from accessing treatment. A key focus at Viralgen is advancing our manufacturing process to improve the process economics with increased yields and improved costs. Our next-generation process, which leverages perfusion bioprocessing, is reducing the current costs of AAV production for later-stage customers and bringing commercial viability closer. In the future, stable cell lines will enable significant further cost optimization.
In fact, there are numerous parallels that can be drawn between the progress being made in cell and gene therapy manufacturing and the evolution that recently occurred in monoclonal antibody production to develop the cost-effective solutions available on the market today. Ultimately, increasing demands for scale and volumes will drive processes and the experience and expertise that developers and manufacturers acquire on the way must feed back into further innovation and optimization. Healthy competition is spurring development and accelerating the adoption of innovative technologies, while the comprehensive understanding that regulatory authorities need to set standards that are achievable and realistic — but also sufficiently flexible to meet specific needs for different indications — will come through collaborations with sponsors.
Partnerships between manufacturers and suppliers of equipment and raw material are also essential to continued progress by reducing the cost of cell and gene therapies. Such partnerships relate to everything from security of supply, effective integration of manufacturing equipment, and enabling efficient extraction and analysis of production data to access to novel, alternative technologies, such as enzymatic DNA (an emerging alternative to traditional plasmid DNA (pDNA)). For instance, Viralgen benefits from being in the Asklepios BioPharmaceutical, Inc. (AskBio) family along with TAAV Biomanufacturing Solutions, SLU (TAAV), which supplies neDNA to us in 12 weeks or less, compared with the four-to-six-month timeframe that is typical for pDNA supply.
Viralgen Vector Core, a wholly owned and independently operated subsidiary of AskBio, was originally founded in 2017 in the Basque Country region of Spain by AskBio and the venture capital fund Columbus Venture Partners to help address manufacturing capacity shortages in the viral vector space using AskBio’s manufacturing platform based on its proprietary Pro10TM cell line.
Although Viralgen was initially created to be a producer of clinical trial materials (the first GMP batch was manufactured in 2018), a commercial production site was quickly added. Today, Viralgen serves over 60 clients, helping to resolve an important bottleneck in the cell and gene therapy manufacturing space and enabling sponsors to advance their AAV-based development programs.
Today, Viralgen remains focused on AAV production and clinical manufacturing, but with the addition of the commercial plant, we have become a fully integrated CDMO. We continue to build our capabilities to ensure that we can offer complete life cycle management of products, development services, and other ancillary support to customers as the sector matures and the needs of developers broaden. The intent is to focus on areas where clients typically struggle, such as overcoming plasmid access issues by providing synthetic DNA and bringing that next level of innovation into our platform manufacturing process. Ultimately, the vision is to contribute not only to the gene therapy field but to the full breadth of the advanced therapy medicinal products (ATMP) space.
Another fundamental aspect of Viralgen’s core vision and values is to partner with and assist foundations focused on the patient communities that these advanced therapies seek to help. Corporate social responsibility (CSR) is taken seriously by the company, as evidenced by the large number of collaborations and sponsorships Viralgen has established with foundations in the rare disease space to support compassionate use cases. Additionally, Viralgen has committed a percentage of manufacturing capacity to Columbus Children’s Foundation and Fundación Columbus, which devote themselves to the development of cures for ultra-rare disorders — with Viralgen performing all manufacturing management tasks.
Viralgen’s commitment to CSR is one of four pillars that make the company stand out, along with the manufacturing platform that truly accelerates time to market, our expertise in AAV supports our extensive development service offering, and our large, diverse, highly skilled group in San Sebastian, Spain, with tremendous intellectual power fueling continuous innovation.
The Pro10TM platform, licensed from AskBio, is based on a serum-free HEK293 cell line designed to support triple transfection for production of all regular and novel AAV serotypes. Most genes of interest (GOIs) are well supported by the technology. As a result, only a relatively quick evaluation of a new client’s GOI and AAV serotype is needed before performing a feasibility run, after which point manufacturing can be initiated. To date, the Pro10TM platform has been used for the production of more than 14 different AAV serotypes, of which nearly one-fifth are novel (engineered or chimeric).
The platform process is scalable and can accommodate AAV gene therapies for rare disease indications with smaller volume needs, as well as products targeting more prevalent conditions that require large volumes of viral vectors. Specifically, Viralgen has demonstrated consistent scalability from 50 L to 2,000 L. Importantly, the cost-of-goods as the process scales are highly predictable.
The ability to produce high-quality AAV vectors at the 2,000L scale will become increasingly important as gene therapy candidates in preclinical and clinical development stages — many of which treat more prevalent indications and involve larger doses for more patients — progress to late-stage clinical trials and marketing authorization. The volume demand for these products will be much higher than has been seen for the AAV-based gene therapies targeting rare diseases. Viralgen is preparing itself to meet that large demand, which we expect to see in 2025 and beyond.
In addition to accelerated manufacturing of AAV vectors of all serotypes, Viralgen provides additional support to customers electing to use mammalian cell culture. We believe strongly in the advantages offered by mammalian cell culture, particularly for downstream processing and in clinical research. As a result, one of our main areas of expertise is in mammalian cell line selection.
Viralgen aids AAV clients of all serotypes by providing extensive data as part of our platform manufacturing process. Our systems are digitally integrated, and all data points are collected in compliance with GMP requirements. In addition to using those data to continuously improve the platform, we can combine it with our experience in AAV production across many different GOIs and serotypes to provide invaluable insights to clients regarding not only process performance but construct design, GOI packaging, and more. Those insights will only improve over time as more data are generated. Ultimately, we hope to accumulate sufficient data to leverage artificial intelligence and machine learning tools for predictive applications.
Clients also benefit from the regulatory experience Viralgen has amassed through the enabling of more than 26 investigational new drug (IND) filings, half of which have resulted in active clinical trials, with some already in or nearing pivotal or late-stage trials. We have thus proven capability in this area, which again is particularly beneficial for smaller sponsors that are new to drug development.
The integrated offering from Viralgen makes us an attractive partner for all types and sizes of sponsors who are developing AAV-based gene therapies. Virtual and near-virtual companies, with just one program and little experience and resources, are suited to reap the greatest benefits from our platform process and supplementary development services. At the same time, large biopharma companies with strong development teams and counterparts for our experts at Viralgen can seamlessly transfer established technological processes to us to enable larger-scale production.
One common theme among all Viralgen’s customers is a focus on innovation — they all have a high level of expertise in AAV vectors and/or certain diseases. Many rely on Viralgen, with its end-to-end services, to act as their external chemistry, manufacturing, and control (CMC) arm, supporting early development through CMC package creation and IND and Clinical Trial Application (CTA)/ Investigational Medicinal Product Dossier (IMPD) filing.
In addition, larger and more established companies working to consolidate AAV programs acquired from smaller players who previously partnered with Viralgen often elect to maintain those relationships. As a result, Viralgen’s customer profile is gradually shifting to a balanced mix of small and large clients. With the new commercial facility, the company has the capacity and capability to support all these programs and help the advance to commercialization.
There remain important questions that need to be answered. Regulatory uncertainty must be resolved, which will require further collaboration among the diverse stakeholders in the cell and gene therapy ecosystem, including biopharma and biotech companies, CDMOs, and regulators. More centralization and clarity are needed on what is required for AAV-based therapies, which can only be realized by sharing knowledge.
Furthermore, questions remain unanswered regarding the best designs for clinical trials investigating AAV-based therapies, particularly those conducted in rare and ultra-rare diseases. Many positive steps forward have been taken regarding novel trial designs and the use of different endpoints and indicators of performance, but there is still much opportunity for improvement.
De-risking programs remains an urgent area of focus for sponsors. Increasingly, de-risking is being achieved through partnership with CDMOs with experience working on a broad array of AAV manufacturing projects covering diverse GOIs and serotypes. However, this approach relies on the formation of true, two-way partnerships founded upon strong collaborations. Such collaborations will also accelerate advances in the gene therapy field more quickly than would be possible if each drug developer directed funds to building their own capacity, which reduces their ability to progress candidates through later development stages to commercialization.
Sponsors also face questions around reimbursement and how to commercialize products that do receive marketing approval. Notably, the answers can vary significantly across geographies. Viralgen anticipates ongoing debate and innovation around reimbursement systems. Circling back, the cost picture relates directly to this issue, and the development of cost-effective production platforms have the potential to impact this debate.
Even small advances/changes that can be made to existing AAV manufacturing processes could have enormous impacts on productivity, efficiency, and ultimately, process economics. Establishing stable cell lines is one potentially transformative change. While the underlying technical challenges are not trivial, they nonetheless represent a solvable problem that will eventually have a significant impact.
There is also tremendous excitement about combination treatments in which AAV-based therapies are administered in conjunction with more traditional medicines. As more AAV-based therapies receive marketing authorizations, and the volume of safety and efficacy data for these products expands, the benefits may become clearer, while risks may decrease. It may therefore become an established component of a larger range of delivery vehicles for use, depending on the indication. The biggest advances are likely to result from further innovations in capsid engineering and may be realized in the form of lower doses and increased tissue specificity.
While Viralgen is involved in all aspects of AAV development and innovation, the company’s focus is supporting companies in their transition from clinical to commercial manufacturing. That includes understanding their CMC strategy as early as possible to enable seamless scaleup from 2L development runs to 2000L commercial processes. Viralgen provides this support in part by being proactive and transparent regarding how customer products will evolve as they advance from one process scale to the next. We also offer capabilities such as manufacturing, science, and technology (MSAT) and development services, as well as an understanding of packaging biology and how each product will fit onto the Pro10 TM platform — everything needed to ensure successful commercialization of client AAV-based gene therapy products.
Viralgen Vector Core was launched in 2017 with a staff of just 10 people. The company now has over 400 employees. The combination of our highly skilled and talented team and our capacity position the company well to meet the growing clinical and commercial demand for AAV vectors anticipated over the near term.
With that, future expansions are expected. From 2026 to 2028, Viralgen will likely construct additional manufacturing modules beyond the three modules currently in the works. The first, with three suites and production scales up to 2000L, is fully commissioned. Construction of one of the two remaining modules could be accomplished in a matter of 15–18 months and would be accompanied by the addition of 100–200 personnel. The last module could potentially be used for GMP development services or production of an as-yet-unidentified modality.
The Basque Country of Spain is an interesting and beautiful area that is attractive to international talent. It is also very close to many different universities and institutions in both Spain and France that contain research groups focused on gene therapies, providing easy access to local talent. This combination leads to a very stable workforce for Viralgen. Our turnover is less than 3% (compared with 10–20% at CDMOs in the United States). As a result, the same experts support customers throughout the entirety of their development projects, which can last anywhere from three to eight years, and enables smoother transitions and often time and cost savings for our clients.
Jimmy Vanhove is the Chief Executive Officer (CEO) of Viralgen. He brings extensive experience in strategy, operational management, and digital transformation to his role. He has held various leadership positions with increased responsibility in manufacturing and strategy consulting at multinational companies like GSK Vaccines, Bayer, and Roland Berger. Before joining Viralgen in 2021, he worked as the chief of staff for Bayer Pharma Product Supply. Jimmy holds a master’s degree in Bioscience Engineering from KU Leuven, and in General Management from Vlerick Business School.
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