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‘Bubble boy’ gene therapy results shoot Mustang Bio’s stock up 200%

  • Shares in Mustang Bio soared by as much as 200% Thursday after an experimental gene therapy it holds an exclusive license to proved successful in treating children with a debilitating condition often termed “bubble boy” disease.
  • Study results, published Wednesday in the New England Journal of Medicine, showed the therapy rebuilt the immune systems of eight treated infants, allowing them to live normal lives. Researchers called the treatment, developed by St. Jude Children’s Research Hospital, a cure for these patients.
  • St. Jude licensed the therapy to Mustang last August. The Massachusetts-based biotech paid $1 million upfront along with a provision for a $100,000 annual fee starting in 2019. The deal also laid out $13.5 million in milestone payments to the nonprofit hospital, as well as mid-single digit royalty payments should the therapy ever be sold.

While investor enthusiasm has tripled Mustang’s share price, commercialization of the gene therapy remains a distant prospect despite the compelling clinical results.

Mustang CEO Manny Litchman gave a preliminary outline of the company’s plans in a Wednesday interview with BioPharma Dive.

Key hurdles will be manufacturing and navigating the regulatory process — common challenges in the still emerging field of gene therapy. Litchman also has his eyes on another ongoing trial of the treatment that could expand the number of addressable patients.

That study, run by the National Institutes of Health, tests the therapy in patients older than two years of age. Interim results published in 2016 showed efficacy and safety similar to the just published data in infants.

“This is a population that is much larger,” Litchman said. “The commercial relevance here is very important.”

The CEO said put the infant trial population at about 20 new patients per year in the U.S., while the NIH study of older patients corresponds to a patient population of about 400 U.S. patients.

Executing on commercial manufacturing, meanwhile, will pose its own challenges for Mustang, which plans to use its 27,000-square-foot facility in Worcester, Massachusetts, as a cell processing plant.

So far, St. Jude has used its own facilities to produce the therapy. Mustang will need to show comparability between its process and St. Jude’s when it takes over manufacturing, a hand-off that’s expected later this year.

The Food and Drug Administration has to clear the facility, and Mustang will need to source commercial-grade supply of the viral vectors used to make the therapy.

“The prices for the vector are sky high and the waitlist is long,” Litchman said. “As a small company, it is even more challenging for us.”

Litchman hopes discussions with the regulator this year will establish a path forward for the therapy, which the company has dubbed MB-107.

The executive expects a study of just three or four patients, with an abbreviated follow-up time of six months, would be sufficient to prove Mustang’s manufacturing.

According to an April company presentation, Mustang views the St. Jude’s results as pivotal efficacy data, with the planned smaller study as supportive.

A more pressing question, however, may be financial. Between cash, cash equivalents and short-term investments, Mustang had about $34 million available at the end of last year, making funding of its ambitions another hurdle. Earlier this month, the company inked a venture debt financing agreement providing $15 million upon closing and potential for more financing through certain milestones.