Stem cell agency says it’s going all out on ‘bubble baby’ cure

The California stem cell agency says it is doing “everything” it can to move forward on a gene therapy that has saved the lives of more than 50 persons but which has been pushed aside by the company that has exclusive rights to it.

The issue has raised questions about the ethics of withholding care from babies and children suffering from a fatal disease. Involved are Orchard Therapeutics PLC and a product called OTL-101, which is a curative treatment for what is known as the bubble baby disease (ADA-SCID), a rare genetic defect that leads to death if not treated. 

The stem cell agency, known officially as the California Institute for Regenerative Medicine (CIRM), has poured $43 million into the work, including $20 million for a clinical trial. The $12 billion agency is funded by California taxpayers. 

CIRM said that payments to Orchard have been “paused” because of Orchard’s failure to meet an unspecified milestone.

Twelve months ago, however, Orchard shelved the bubble baby treatment in favor of pursuing other products that it deemed would be more profitable. Last October, it suspended the CIRM-backed clinical trial that was financed by the stem cell agency.  The end of the trial meant that no further patients would be treated with the life-saving therapy. 

Orchard last week said in a Security and Exchange Commission filing that the company expected to continue to reduce its support of OTL-101 and has already saved $2.5 million by sidelining the treatment.

Asked for comment on Orchard’s actions, the stem cell agency said that “CIRM is committed to its mission of doing everything we can to help patients in need and so we are working with all of our stakeholders in moving this project forward.”

In a statement released by Kevin McCormack, CIRM’s director of communication, the agency said it reserves the right to use its “march-in” rights to seize the treatment. It also said that payments to Orchard have been “paused” because of Orchard’s failure to meet an unspecified milestone.

March-in rights are “intended to prevent a useful drug discovery from being shelved,” according to a CIRM document. They are considered something of a “nuclear option” in biotech business and research circles. They have never been used in the 16-year history of the agency in any of its more than 1,000 grants.

The story of Orchard’s actions and their impact on babies and children suffering from ADA-SCID was first reported by Capitol Weekly and the California Stem Cell Report.

About $6 million could be lost by Orchard if CIRM determines that it has not fulfilled its contract. One objective of the trial requires Orchard to file for a federal biologics license, a necessary step before making the treatment widely available. 

CIRM said it could not legally disclose information about whether an application was filed, deferring to Orchard. The company has declined to answer whether it has filed for such a license. It has also declined to answer whether it knows of babies or children with ADA-SCID who are going untreated.  

The story of Orchard’s actions and their impact on babies and children suffering from ADA-SCID was first reported last week by Capitol Weekly and the California Stem Cell Report. The story appeared on the same day that the prestigious New England Journal of Medicine published scientific details of the treatment’s success, which are well-known to followers of the California stem cell agency.

One scientist, who asked not to be identified but who was familiar with the research, told Capitol Weekly that the situation with Orchard involves “a socialized research process and privatized profit, and profit shouldn’t be the sole consideration when someone actually comes up with a cure.” 

“Funding for the project has been paused until that milestone is completed.” — CIRM

The scientist said a “collective responsibility” exists between the stem cell agency and Orchard “to come together to make sure that this is available for children.” 

The treatment was developed at UCLA by Donald Kohn, who is a scientific co-founder of Orchard. UCLA owns the intellectual property on the research and licensed it exclusively to Orchard, which is a publicly traded company based in London with an office in Boston. Orchard has lost millions of dollars in the last two years. 

Kohn has not commented on the matter. Orchard has declined to comment beyond its SEC filing and a brief statement last week in which it said that it “is mindful” that the company must make “a responsible allocation of resources.”

Below is the text of responses from CIRM and from Orchard.  The questions are from the California Stem Cell Report.

Did Orchard file for a biologics license?
CIRM: “This is something that Orchard needs to respond to, not us. As you probably know, David, current regulations prohibit the public disclosure of pending Biologics License Applications (BLAs) by the US Food and Drug Administration (FDA) unless they have been publicly disclosed or acknowledged previously. We have not been told of any pending BLA by Orchard so you would have to ask them. We are not free to disclose these matters on behalf of the company.”

Are children with ADA-SCID not being treated?
CIRM: “We do not have an answer as we only know about the patients that are involved in the CIRM-funded trial or that which is disclosed publicly.”  

Clinical trial status and progress?
CIRM: “You really need to ask Orchard for clarification on what is listed on the clinicaltrials.gov website. They control that information not us.

The current status of the project from our perspective is that it is delayed because they have yet to reach a milestone. As such, funding for the project has been paused until that milestone is completed. In the meantime we are working with all stakeholders to find a way forward.”

Is CIRM considering exercising its march-in rights with Orchard?
CIRM: “CIRM’s IP (intellectual property) regulations allow CIRM to use march-in rights under certain criteria and circumstances,  and CIRM reserves the right to exercise such march-in rights.”

Anything else that CIRM wants to add to the discussion?
CIRM: “CIRM is committed to its mission of doing everything we can to help patients in need and so we are working with all of our stakeholders in moving this project forward.”

Regarding Orchard’s response, the California Stem Cell Report has queried the company three times since last Friday regarding a number of matters, including the license and knowledge of untreated children and their lack of treatment. Below is the latest response today from Benjamin Navon, who is a spokesman for Orchard.

Navon did not mention Orchard’s filing today that said it will continue to draw back away from OTL-101 and that it has saved $2.5 million already from the cuts.

The “previously shared” statement that Navon references was carried on Tuesday. 

Here is text of Navon’s email response:

“Thank you for reaching out. If this is a separate article, we ask you include our previously shared statement (copied below for reference and not intended for specific attribution) as we do not have additional information to provide at this time.” 

“Orchard Therapeutics has an extensive portfolio of hematopoietic stem cell (HSC) gene therapy programs in development, and the company is mindful that this requires a responsible allocation of resources. Last year, Orchard undertook a strategic review of its current portfolio based on criteria including the medical need, treatment landscape, size of patient population and development stage. This exercise helped focus the company’s plans for how to prioritize investments across the portfolio in the near-term. Orchard recognizes the value OTL-101 could potentially offer patients diagnosed with ADA-SCID. Current investments in the program include ongoing follow up and monitoring of patients treated in the clinical program.”
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Editor’s Note: David Jensen is a retired newsman who has followed the affairs of the $3 billion California stem cell agency since 2005 via his blog, the California Stem Cell Report. He has published thousands of  items on California stem cell matters.