Sanofi investing in gene therapy as R&D focus turns toward rare disease – BioPharma Dive

CAMBRIDGE, Mass. Sanofi is accelerating nascent efforts in gene therapy, aiming to use its expertise in vaccines to catch up in a competitive field that's well ahead of the French pharma.

The company has prioritized gene therapy programs amid a broader effort to boost internal R&D speed and impact, said John Reed, Sanofi's head of research and development, in a Wednesday interview at Sanofi's Cambridge office.

"When I joined, I saw that we were dabbling in gene therapy and decided that we need to get more serious about gene therapy if we are going to continue to be impactful in that space," said Reed, who came over to Sanofi from Roche last July.

In particular, the company is retrofitting one of its vaccine facilities near Lyon, France, to produce GMP-grade adeno-associated viral vectors, or AAVs. Reed said he expects the plant to be operational in about a year.

The new R&D chief is steering the company away from areas for which it's historically been known, including, most notably, cardiovascular disease and diabetes. Sanofi is largely exiting cardiovascular R&D and is cutting spending in half on diabetes R&D, Reed said.

While vaccines make up a comparatively smaller portion of Sanofi's revenues, Reed noted the company's decades-long expertise in producing inactivated viruses could translate well to gene therapy. Reed was recently in Lyon to discuss the budget and headcount requirements for the change, he said.

"We have an opportunity to really leverage those competencies around vaccines for the gene therapy area," Reed said. "We are looking at how we can use that as a competitive advantage to be players in that space."

Several of Sanofi's pharma peers have bet heavily on gene therapy, investing in manufacturing and snapping up biotech leaders through multi-billion dollar acquisitions, such as by Novartis for AveXis and Roche for Spark Therapeutics.

Smaller companies like BioMarin Pharmaceutical, meanwhile, hold sizable leads in therapeutic areas that Sanofi hopes to play a larger role in, like hemophilia.

Reed acknowledged an acquisition "could be an accelerator" in establishing Sanofi's presence in cell and gene therapy.

"We flirt with those things all the time," he said, when asked about his openness to a deal like those for AveXis and Spark. "It's a bit challenging to point your finger at any one gene therapy company and say that solves all our problems."

"It's been really tough to pull the trigger on something like that," he added. "In the interim, we've been establishing the capabilities more internally."

How much it would be willing to pay, or afford, is another question. Under former CEO Olivier Brandicourt, the company last year targeted roughly 20 billion euros in acquisitions, a budget largely consumed by deals for Bioverativ and Ablynx in the blood disease space.

The company's first AAV-delivered gene therapy recently entered the clinic for a form of a rare eye disease called Leber congenital amaurosis, Reed added.

Two gene-edited cell therapies are in Phase 1/2 testing via a collaboration with Sangamo Therapeutics. Other programs remain preclinical as the group works on establishing GMP manufacturing capabilities.

All of this is taking place against a backdrop of change for Sanofi research and development teams.

Reed is working to narrow the company's focus to advance only first- or potentially best-in-class therapies, a bar that led Sanofi to cut several dozen programs from its pipeline earlier this year.

Reed has also restructured employee's incentives, taking away bonuses for starting projects and replacing them with an emphasis on starting first-in-human studies, a milestone Sanofi usually reaches slower than industry leaders.

"I don't want to reward people for starting projects, I want to reward them for finishing projects," he said. "We have too many projects."

Part of that's involved reducing bureaucracy and streamlining decision-making, moving from 33 committees that interact with R&D teams to three. Reed's given decision-making authority to team leaders for each molecule, calling them CEOs of their drug candidate.

Even before Reed came on board, productivity had begun to improve from a nadir in 2014, when Sanofi's entire organization produced only two clinical candidates that year. Now, Sanofi is delivering about six per year and, with the 2018 acquisitions of Bioverativ and Ablynx, should reach eight or nine per year.

Still, of the last 10 drugs Sanofi has won approvals for, only one was an internal project, Reed said. For the company's next 10 assets, Reed expects six or seven to have been internally developed.

As Reed re-focuses, Sanofi has exited or restructured partnerships this year with Regeneron, Alnylam Pharmaceuticals and Lexicon Pharmaceuticals.

Paring down the pipeline and restructuring deals also speaks to Sanofi's R&D budget, which the company expects to keep flat for the next few years. The pharma spends about half what companies with larger revenues like Pfizer, Novartis and Roche do.

Reed says the ultimate goal is to bring about 12 programs into clinical development each year, and growing internal R&D to the point where it's responsible for the majority of those candidates progressing.

"With the resources we have, that would be industry competitive," he added.

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Sanofi investing in gene therapy as R&D focus turns toward rare disease - BioPharma Dive