Collateral Damage Follows A Medical Leap

by | Jan 3, 2024 | FDA, FOIA, Pharmaceuticals

FOIAengine Lines Up the  Players in a Huge Patent Fight

When the Food and Drug Administration announced three weeks ago the approval of two milestone treatments for sickle cell disease, the agency hailed the action as “an innovative advancement in the field of gene therapy.”

There was good reason to cheer the news.  As a Bloomberg columnist pointed out, medical research had, for decades, “neglected sickle cell disease, though it caused severe pain and early death for thousands of people, mostly of African descent.”

But there remains reason for caution, because the new treatments are so expensive –costing millions of dollars per patient – that they may be out of reach for most.

How much is saving a life worth, and who should pay the price?  In today’s story, we’re examining the intersection of venture-capital-funded science, medical necessity, and the harsh economic realities of the pharmaceutical marketplace.

As is often the case, recent Freedom of Information Act requests reveal something about the various stakeholders.  We’ll get to that.  First, here’s more about these potentially life-saving treatments for those with sickle cell disease.

Approval of the new treatments – which go by the names Casgevy and Lyfgenia – was fast tracked by the FDA after early trials showed huge success.  Although each treatment works differently, both are innovative cell-based gene therapies offering great promise for treating sickle cell disease, an inherited blood disorder affecting an estimated 100,000 people in the U.S. and nearly 8 million people worldwide.   According to the Sickle Cell Disease Foundation, approximately 250 million people worldwide carry the gene that’s responsible for the disease.

Lyfgenia uses a viral envelope to edit a gene.  Casgevy relies on a newer, innovative DNA-editing technology called Crispr, which stands for “Clustered Regularly Interspaced Short Palindromic Repeats.”  It’s the first time the Nobel Prize-winning Crispr technology, discovered a decade ago, has been green-lighted as a therapy.

Both treatments are intended to be one-time fixes.  And they are very expensive.

Casgevy will cost more than $2 million per treatment.  Lyfgenia will cost even more, at $3.1 million.  CNBC calls this “a major test of the American health-care system, with Wall Street eyeing [the] price tag [because] tens of thousands of people could be eligible.”

There is strong evidence that Wall Street is watching.  Stocks of the pharmaceutical companies involved have been oscillating since the FDA’s approval announcement.

Casgevy is being produced and marketed in a 60/40 joint venture between Vertex Pharmaceuticals (NASDAQ: VRTX) and Crispr Therapeutics (NASDAQ: CRSP).  Those two stocks are soaring.

Not so for the other company involved.  Soon after the FDA’s approval, Bluebird Bio (NASDAQ: BLUE), the maker of Lyfgenia, announced that an unnamed insurer planned to cover the treatment cost, and that Bluebird Bio was in advanced talks with other insurers.  The report didn’t help Bluebird’s stock price.  Once as high as $155 per share, Bluebird’s stock recently closed at $1.37.

We wondered who else might be watching the high-stakes possibilities play out.  To get the answer, we dug into PoliScio Analytics’ competitive-intelligence database FOIAengine, which tracks Freedom of Information Act requests in as close to real-time as their availability allows.

FOIA requests to the federal government can be an important early signal of investor interest, litigation to come, or uncertainties to be gamed out.  What we discovered was, in some respects, a mix of all of the above.

We found over a hundred FOIA requests about the companies working on sickle cell treatments.  The FOIA requests came from analysts, hedge funds, and researchers – any of whom could have been buying the rumor and selling the news, or vice versa.  This isn’t surprising, considering the three pharmaceutical companies the requests targeted have for years been raising, and spending, hundreds of millions of venture-capital dollars just to get to the point of FDA approval.  (Science magazine estimates the VC money invested in Crispr to be in the billions of dollars.)

Researchers and analysts making multiple inquiries to the FDA and the Securities and Exchange Commission since 2021 about the three pharma companies and/or their treatments under development included:  Sectilis, Ascendant, Redica Systems, Clarivate, Bioscience Advisors, Royalty Range, RoyaltyStat, ktMine, Probes Reporter, Knowledge Ecology International, and AUS Consultants.  Multiple FOIA requests also came from media company Bloomberg.

There was also a March 18, 2022 FOIA request from the conservative legal activists at  Judicial Watch.  That organization sought from the National Institutes of Health “a copy of all correspondence sent by Dr. Anthony Fauci, NIAID, NIH, or anyone communicating on his behalf that contains any of the following key terms: (1) FOIA (2) Conspiracy (3) CRISPR (4) right wing (5) radical (6) extremists.”

Notably, at one or more points in the past several years all three makers of the innovative sickle cell treatments – Vertex, Bluebird Bio, and Crispr Therapeutics – submitted their own FOIA requests, apparently to find out what information the FDA might disclose.

What was more surprising than those FOIA requests was the long-running patent-rights battle we bumped into.  It’s a fight about who holds patent rights to the Crispr technology, and it has been raging – largely out of the mainstream media’s view, but in the bullseye of the elite scientific community – for more than a decade.

The patent litigation, currently grinding away in the U.S. Court of Appeals for the Federal Circuit, pits against each other some of the world’s deepest-pocketed institutions.

On one side is Harvard, MIT, and the Broad Institute – the latter created in 2004 by the two universities as an outgrowth of the Human Genome Project, which Broad scientists helped create and lead.  In 2022 (the most recent year available), the Broad Institute listed assets of about $2 billion.  The Institute spent $826 million that year – including millions fighting the Crispr patent litigation.

Required by the Internal Revenue Service to disclose the names and amounts paid to its five most highly compensated contractors, the Broad Institute listed its intellectual property law firm, Johnson Marcou Isaacs & Nix, second from the top in 2022, at $6,070,220.  In 2021, Johnson Marcou also held down the second spot, pulling in $6,975,592 from the Broad Institute.  Quinn Emanuel Urquhart & Sullivan landed in fourth place that year, billing $3,885,432.

On the other side stands the University of California, the University of Vienna, and French scientist Emmanuel Charpentier, the latter a co-founder of Crispr Therapeutics.  It was Charpentier who shared the Nobel Prize in Chemistry in 2020 with another researcher, Jennifer Doudna.  As the Royal Swedish Academy put it, the two “discover[ed] one of gene technology’s sharpest tools” – Crispr.

But there was a problem:  Although Charpentier and the Universities of California and Vienna filed their Crispr patent application first, in 2012, the Broad Institute was the first to receive a Crispr patent, in 2014.  There are many other issues in controversy, including whether a third Crispr researcher was slighted by the Nobel committee.  But the core issue in the fight is about who has marketable patent rights.  The issues are as convoluted as the stakes are vast.

Shortly before the Crispr patent case reached the federal appeals court in April 2022, an article in Nature predicted that the dispute “could carry on for years.”  And, judging from the docket, that is how it’s playing out.

“It reminds me of reading about really unhappy rich people,” Harvard geneticist George Church said of the epic patent fight – in 2017.  “They have such a big blank check that they just make each other miserable.”

To see the requests mentioned in this article, log in or sign up to become a FOIAengine beta user.

Next:  Noteworthy requests to the Federal Trade Commission.

John A. Jenkins, co-creator of FOIAengine, is a Washington journalist and publisher whose work has appeared in The New York Times Magazine, GQ, and elsewhere.  He is a four-time recipient of the American Bar Association’s Gavel Award Certificate of Merit for his legal reporting and analysis.  His most recent book is The Partisan: The Life of William Rehnquist.  Jenkins founded Law Street Media in 2013.  Prior to that, he was President of CQ Press, the textbook and reference publishing enterprise of Congressional Quarterly.  FOIAengine is a product of PoliScio Analytics (PoliScio.com), a new venture specializing in U.S. political and governmental research, co-founded by Jenkins and Washington lawyer Randy Miller.  Learn more about FOIAengine here.  To review FOIA requests mentioned in this article, subscribe to FOIAengine.  

Write to John A. Jenkins at JAJ@PoliScio.com.