By Josh Nathan-Kazis

Just before the Covid-19 pandemic, it seemed gene therapies were a few years away from curing all sorts of diseases with a quick, simple infusion.

The idea was that drugmakers could stuff some genetic code into a modified virus, inject lots of copies of that virus into a patient, and trick the patient's own cells into making a protein that would fix their chronic condition, perhaps forever.

For a moment, it was the biggest idea in biotech. Barron's put gene therapy on its cover twice, first in 2017 and again in 2019. Big pharma companies spent tens of billions of dollars on the technology, signing a total of $22 billion in deals to acquire gene therapy companies in 2018, according to data provided to Barron's by DealForma, and another $9.8 billion in 2019.

In gene therapy, drugmakers, scientists, and investors all saw the promise of one-and-done cures for deadly, hard-to-treat genetic conditions, for which scientific approaches had failed to find effective treatments.

Half a decade later, though, most of that enthusiasm is gone. The field is littered with scientific issues, safety problems, and commercial failures.

The latest disappointment came earlier this week with the death of a patient in a trial for a gene therapy from Sarepta Therapeutics.

Sarepta shares tumbled 42% one the news, and investors seemed to throw in the towel on gene therapy treatments.

Many of the larger companies in the field have ditched gene therapy programs over the past few years. In February, Pfizer pulled a hemophilia gene therapy off the market less than a year after its launch, citing low uptake.

Dealmaking has all but dried up. There was just $1.2 billion worth of gene therapy M&A last year, and none so far this year, according to DealForma. Upfront payments for gene therapy research partnerships were down to $155 million last year from a peak of $1.7 billion in 2017.

A drumbeat of patient deaths has weighed on the industry. There have been three this year alone, including two of patients taking an approved gene therapy from Sarepta Therapeutics that treats Duchenne muscular dystrophy, a fatal genetic condition.

Since the death of the first Serepta gene therapy patient in March, investors have been increasingly disillusioned, says Andrew Tsai, a biotech analyst at Jefferies. "There has been this emerging view," he says. "Like: See? Gene therapy as a whole is uninvestable. Why am I even bothering?"

But gene therapy still has its supporters in the medical field and on Wall Street.

"I think there's a need for gene therapy," says Salveen Richter, a biotech analyst at Goldman Sachs. "I just think we need to fix some aspects of it."

Gene therapy refers broadly to treatments that change a patient's genes to try to fix a disease. When the hype peaked around 2019, the excitement was largely over a flavor of gene therapy that used a family of viruses called AAV to sneak replacement genetic code into a patient's cells.

That enthusiasm grew largely from the extraordinary success of a Novartis AAV gene therapy for spinal muscular atrophy that launched in 2019. The treatment, called Zolgensma, changed the lives of patients, transformed how doctors treated the condition, and turned into a legitimate blockbuster: Sales of Zolgensma neared $1 billion in 2020, its first full year on the market.

Today, Zolgensma remains a blockbuster: Analysts expect sales to be $1.3 billion this year.

The success of Zolgensma has proven hard to replicate.

"SMA was in a lot of ways the killer app for AAV technology," says Mani Foroohar, a biotech analyst at Leerink Partners. "Everyone who develops a mobile phone in the wake of the iPhone is probably not going to have iPhone-like sales."

There are fewer than 10 AAV gene therapies on the market in the U.S. Three of them treat hemophilia, but they have failed to draw substantial numbers of patients from highly effective non-gene therapy hemophilia treatments like Roche's Hemlibra.

Others have struggled to prove their efficacy. Sarepta's DMD gene therapy, called Elevidys, failed a Phase 3 trial, though the Food and Drug Administration still expanded its approval for the drug anyway, citing "urgent" need.

Safety worries, meanwhile, loom over the sector. To get cells to start expressing the introduced genes, doctors need to inject high doses of the virus that carries the genetic code. Though the viruses cannot replicate, they can in rare cases cause serious complications, particularly in the liver. There have been a handful of high-profile patient deaths, including one in a trial of a Neurogene gene therapy for Rett Syndrome last year, and one this year in a trial of a Rocket Pharmaceuticals gene therapy for Danon disease.

It isn't just Serepta stock taking a hit. Gene therapy biotechs are down: Solid Biosciences and Regenxbio are both down nearly 30% over the past 12 months. Leerink's Foroohar says he would describe investor sentiment as "somewhere within the range between disinterest and distaste."

The vision of AAV gene therapy as a cure-all for a laundry list of disorders has faded. But the broader dream isn't dead. Related approaches, like gene editing technologies and other flavors of gene therapy, are coming onto the market. For now, those all require a patient's cells to be modified outside of the body, and then reintroduced in a difficult process that involves taxing chemotherapy.

"The hope here is that companies and academics will continue to understand not just the power of the platform, but the risks of the platform, as we don't have at the moment great viable alternatives," says Josh Schimmer, a biotech analyst at Cantor Fitzgerald. "Which is the reason why we shouldn't be throwing this platform out."

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

June 19, 2025 03:00 ET (07:00 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.