Standing out: Defining the market for your new ATMP asset

Academic teams are very good at generating proof of concept (PoC) data to illustrate the potential of their nascent cell or gene therapy. However, when raising investment from venture capital (VC) firms, PoC data is only a part of what is required. Even brilliant new technology will often struggle to raise investment unless the commercial potential can be described.

In this blog, Sam Goldsmith, Head of Commercialisation of Research and Investments at the Cell and Gene Therapy Catapult, highlights why and how academics should develop a coherent narrative describing their novel therapy’s unmet need in the market, and how their proposition will differentiate from both current and emerging competitors.

This is the third in a series of blogs to help academic leaders identify and focus on key considerations when seeking investment to commercialise their advanced therapy concepts.

Read previous blogs from this series here

The Size of the Market

Standing out: Defining the market for your new ATMP asset

Identifying the patient population

When developing a cell or gene therapy product, as is the case with most products in the wider biotechnology industry, the size of the potential patient population is a key indication of commercial opportunity and price potential. Additional considerations for accurately determining market size also apply, including the likelihood of reimbursement and restrictions imposed by payers, healthcare system readiness to diagnose the condition and deliver the therapy, current and emerging competition, and willingness of physicians to prescribe and patients to use the therapy.

To accurately determine the size of the target patient population, it is important to stratify the total population for an indication into appropriate cohorts that could receive and potentially benefit from the product. Amyotrophic Lateral Sclerosis (ALS), for example, is a genetic disease with 44 mutations currently known to result in disease pathology. An academic team developing a gene therapy for ALS caused by a mutation in the C9Orf72 gene should clearly define the percentage of people who have ALS as a result of a mutation in this gene. Using this approach will make it easier for an investor to understand which patient population is being targeted as the primary indication.

The available population will then often be further segmented using other variables, a common one being disease severity. For some approaches, such as oncology indications, ATMPs are typically reserved for use only in the most severely impacted patients after other treatments have been unsuccessful. Conversely, ATMPs can be reserved for use in patients that have not yet progressed into the late stages of disease where the objective is to preserve function, which is more common in paediatric disorders.

Medicines developers should also consider how practical it is to identify patients covered by the proposed licensed indication. In rare diseases diagnosis can occur quite late after disease onset and by the time diagnosis is made and treatment can be accessed, the patients are no longer suitable for the medicine.

Determining patient population size

Once the unmet need has been quantified and the target disease area has been stratified down to a suitable target indication, academic teams should identify the size and distribution of the patient population. This fulfils two key functions:

  • It defines the total addressable market in key geographical locations
  • It determines if there are enough patients to run clinical trials in the location where the academic team resides, or whether/when global multi-center clinical studies are required. This knowledge will help inform investors of some of the challenges and costs associated with development in key markets. In parallel, an important consideration when determining spin-out location is the level of access to experienced medical professionals and whether the presiding regulatory authority has developed approaches for advising ATMPs.

With these numbers at hand, it will help to determine if the disease is ultra rare, rare, or high prevalence. Generally, ultra rare and rare indications will appear less commercially attractive due to the small patient population size, however, there is often a significant unmet clinical need which provides support for higher pricing for highly effective medicines. Rare diseases medicines also benefit from long term market protections secondary to the US Rare Diseases Act and the EU Orphan Drugs Act.

Clearly conveying the message to potential investors

Rare diseases also represent opportunities to demonstrate efficacy for new technologies prior to expanding the product scope for use in disease of higher prevalence. Building on the example with ALS, demonstrating the use of an AAV vector serotype and promoter in the C9Orf72 population could de-risk key components of the therapeutic product and potentially extend the use to sporadic forms of ALS with a larger patient population. Therefore, defining initial patient population size and its rarity status provides a clear articulation of initial market size and opportunity for expansion. This helps to fulfil key requirements for investors who, upon evaluation of therapies, are looking to address great unmet clinical and market needs.

The Competition

Standing out: Defining the market for your new ATMP asset

Who? What? Where?

Defining the size of the market and stratifying an indication is largely about understanding the mechanism of action for the new approach, and then aligning that to knowledge of disease presentation based on existing epidemiology. Identifying close competitors, on the other hand, requires an in-depth understanding of the wider biotechnology sector.

Competition comes in many forms, and at the company creation stage, academic teams and university technology transfer offices (TTOs) need to be aware of all significant academic and commercial competitors. Most academics should have a good awareness of what other academic groups are developing, and in some instances, they may even be collaborators. Understanding if there are established companies developing competing technologies may require more digging. Both sources of competition require consideration, and how their novel technology is differentiated from existing competitors needs to be clearly articulated to investors.

Competing therapeutic modalities

Cell and gene therapies represent a small but growing modality in the biotechnology industry. One key area often overlooked in competitor analyses are alternative therapeutic modalities for the same indication. For example, small molecules and biologics dominate the broader biotechnology sector for a wide range of indications, and having a robust understanding of potential competitors in these areas is crucial. Understanding competing modalities in this way also supports characterisation of the relevant addressable market size, the unmet need, as well as commonly used patient selection criteria and clinical trial endpoints.

To extend the ALS exemplar it would be important to understand the differences between a gene editing approach for C9Orf72 dependent ALS and those using antisense oligonucleotides (ASOs). Key considerations would include:

  • How far the competing technology is developed
  • Are there any relevant clinical data?
  • The cost of development
  • Whether the academic technology is not only differentiated, but does it address the unmet need left by the standard of care that competing technologies fail to capture?

Being unprepared to describe the market conditions and explain in detail how a new product will compete risks the loss of investor confidence due to a perceived naivety.

Learn more about how to differentiate your ATMP asset and build value in our Target Product Profile (TPP) development guide

Competitor funding

It is not sufficient to understand competition from a technical perspective alone. Identifying the level of funding that competitors have available, and their technology’s stage of development, are also crucial. Having a differentiated technology but competing against a very well-funded company with a product in late-stage development will increase the level of risk to an investor. In these cases, an academic team or TTO will need to articulate how the technology is differentiated from these competitors very clearly and develop a robust plan of how investment will accelerate the technology to the clinic and reach value inflections points quickly.

The Platform

Standing out: Defining the market for your new ATMP asset

The potential for expansion

A final consideration to make when developing the strategy around market size and commercial landscape is to consider whether there will be broader applications of the technology. In the cell and gene therapy industry, investors are more positively disposed toward technology platforms that can be applied to multiple indications rather than single products. For example, C9Orf72 based ALS is caused by a repeat expansion of a nucleotide sequence within the C9Orf72 gene. Developing a gene therapy to address the underlying repeat expansion issue opens the possibility of adapting the technology to other repeat expansion disorders. Therefore, whilst C9Orf72-ALS is the primary indication, it is important to articulate the platform nature of the technology, the potential market size for follow on applications, and define the competitor landscape when other indications are included. This approach will make the overall technology a lot more attractive to investors by helping them understand the full potential of the expanded market size.

Sealing the deal

When preparing to pitch to VC’s for investment into a university spin-out, it is key for academic teams to step outside their comfort zones and ensure that the market size and competitor landscape of their cell or gene therapy have been thoroughly researched. To add further value, it is advised to build a strategy around how the technology can be expanded upon to address unmet clinical and market needs in additional indications. Focusing on these three areas will build credibility and confidence with investors and increase the chance of successfully securing investment.

Click here to contact the Cell and Gene Therapy Catapult if you are an academic or early-stage therapy developer looking for support to develop a robust business strategy and commercialise your cell or gene therapy concept.