‘is actually curing patients a sustainable business type?’

Goldman Sachs analysts attempted to address a touchy subject for biotech companies, especially those involved within the pioneering “gene therapy” treatment: cures could be bad for business within the long run.

“is actually curing patients a sustainable business type?” analysts ask in an April 10 report entitled “The Genome Revolution.”

“The potential to deliver ‘one shot cures’ is actually one of the most attractive aspects of gene therapy, genetically-engineered cell therapy as well as gene editing. However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies,” analyst Salveen Richter wrote within the note to clients Tuesday. “While This kind of proposition carries tremendous value for patients as well as society, the item could represent a challenge for genome medicine developers looking for sustained cash flow.”

Richter cited Gilead Sciences’ treatments for hepatitis C, which achieved cure rates of more than 0 percent. The company’s U.S. sales for these hepatitis C treatments peaked at $12.5 billion in 2015, although have been falling ever since. Goldman estimates the U.S. sales for these treatments will be less than $4 billion This kind of year, according to a table within the report.

“GILD is actually a case in point, where the success of its hepatitis C franchise has gradually exhausted the available pool of treatable patients,” the analyst wrote. “within the case of infectious diseases such as hepatitis C, curing existing patients also decreases the number of carriers able to transmit the virus to brand-new patients, thus the incident pool also declines … Where an incident pool remains stable (eg, in cancer) the potential for a cure poses less risk to the sustainability of a franchise.”

The analyst didn’t immediately respond to a request for comment.

The report suggested three potential solutions for biotech firms:

“Solution 1: Address large markets: Hemophilia is actually a $9-10bn WW market (hemophilia A, B), growing at ~6-7% annually.”

“Solution 2: Address disorders with high incidence: Spinal muscular atrophy (SMA) affects the cells (neurons) within the spinal cord, impacting the ability to walk, eat, or breathe.”

“Solution 3: Constant innovation as well as portfolio expansion: There are hundreds of inherited retinal diseases (genetics forms of blindness) … Pace of innovation will also play a role as future programs can offset the declining revenue trajectory of prior assets.”

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