Tangled tale: Research, profits and the ‘bubble baby’ syndrome

Little Evangelina Padilla-Vaccaro is more than a poster girl for the $12 billion California stem cell agency.

She embodies a big bet by the agency that its efforts will conquer at least a few of the terrible diseases that are currently incurable.

In the case of Evie, as the eight-year-old is known, she was born with what has come to be described as the bubble baby syndrome, a rare genetic mutation that crippled her immune system to the point that she would have died if left untreated.

Overall, the situation is what policy experts call a “wicked” problem, one that is complex and intractable.

A therapy funded by California’s stem cell agency cured Evie. But the life-saving treatment is not available to other children who suffer from the same affliction, which is medically known as ADA-SCID. Unfortunately, those children and babies are outside of the successful clinical trial treatments that benefited Evie.

The firm that was conducting the most recent trial, Orchard Therapeutics PLC, has suspended the trial for financial reasons. Instead, it is backing other products that it deems more likely to make bigger profits. Orchard, which has exclusive rights to the treatment, has declined to say whether it will make the experimental therapy available to all the children who need it.

Overall, the situation is what policy experts call a “wicked” problem, one that is complex and intractable — a knotty tangle of Orchard’s hoped-for profits, cutting edge medicine, public funding of scientific research, ethics and the lives of babies born without the ability to stave off even minor infections that could take their lives.

The tangle is now coming home to roost at the California Institute for Regenerative Medicine(CIRM).  That’s the official name of the agency that was created by voters in 2004 with the expectation that it would turn stem cells into cures. However, yet to emerge from CIRM is a stem cell therapy that is available to the general public.

Beyond the matter of millions of dollars, Orchard’s financial decision stirs up ethical concerns  involving the biotech industry, academia and government.

Over the years, CIRM has pumped more than $40 million into the research for the gene therapy/stem cell treatment that cured not only Evie but more than 50 other persons with similar afflictions.

In 2016, the agency approved $20 million for Orchard’s now suspended trial. The firm’s decision raises questions about whether Orchard has fulfilled the terms of its contract with CIRM.

Orchard, a publicly traded company, purchased an exclusive license for the treatment from UCLA, which owns the intellectual property and which has received $308 million from CIRM for research ranging from the bubble babies to buildings.

Beyond the matter of millions of dollars, Orchard’s financial decision stirs up ethical concerns  involving the biotech industry, academia and government funding of biomedical research.

It is not a new conundrum. It surfaced famously in the 2011 abandonment by Geron, Inc., of the first clinical trial using human embryonic stem cells. “Wrongful Termination: Lessons From the Geron Clinical Trial” was the headline on an article in the journal Stem Cells Translational Medicine in 2014.

The CIRM-Orchard-Evie nexus had its origins decades ago. It grew out of research over years involving a host of scientists and many millions of dollars.

Written by David Magnus, a bioethicist at Stanford University, and Christopher Scott, a bioethicist at the Baylor College of Medicine, the article said:

“Halting a trial for financial reasons when there are no unanticipated problems…is problematic if it would alter the risk/benefit basis” of the participants.

Another scientist familiar with the field, but who asked not to be named in order to speak frankly, told the California Stem Cell Report 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.”

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 CIRM-Orchard-Evie nexus had its origins decades ago. It grew out of research over years involving a host of scientists and many millions of dollars, both public and private, beyond the amounts contributed by California and Orchard.

The research centers on Donald Kohn, director of the UCLA Human Gene and Cell Therapy Program, who began his work in 1985.  Last month, he received from the International Society for Cell and Gene Therapy, its highest honor for career achievement.

The treatment backed by CIRM is called OTL-101, which has won an orphan drug designation, a breakthrough therapy designation and a rare pediatric disease designation.

The California stem cell agency has awarded Kohn $43 million for a variety of related research, including the $20 million award that involved Orchard. In 2018, it was officially split with Orchard to complete the trial with the remaining $8.5 million.

Kohn is a scientific co-founder of Orchard, which was created in 2015 with private financing. In 2018, it went public with a $200 million offering. The stock price shot up to a high of $20 a share in 2019. At Monday’s market close, it stood at $5.14, down nearly six percent from Friday.

The treatment backed by CIRM is called OTL-101, which has won an orphan drug designation, a breakthrough therapy designation and a rare pediatric disease designation, all from the federal Food and Drug Administration. Those important designations help to speed a treatment’s use and accessibility.

Twelve months ago, Orchard, however, turned away from OTL-101 in a restructuring move focusing on other therapies. After spending $2 million on its California operations in Fremont and Menlo Park, it closed them down. In all, the restructuring through this year would save $125 million and cut its workforce by 25 percent, said Orchard.

Last October, Orchard quietly shuttered the clinical trial on OTL-101. However, Orchard’s contract with CIRM, which was due to terminate at the end of January this year, required it to file a biologics license application with the federal government to advance the treatment along a path to commercial use.

CIRM has not yet said whether the Orchard actually filed for a license. Nor has CIRM yet responded to questions whether it knows of children with ADA-SCID who are going untreated by Orchard.

The number of babies or children with ADA-SCID is quite small. Estimates are not precise. But the National Institutes of Health says the “best estimate is somewhere around 40-100 (annually).

The California Stem Cell Report queried Orchard, which lost millions in 2019 and 2020, about its actions regarding OTL-101. The questions included how the firm would deal with children with ADA-SCID who were not in the trial, whether it filed for a biologics license and whether it could afford to give up $6 million to CIRM.

Orchard released the following brief statement and declined to comment further:

“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.”

The number of babies or children with ADA-SCID is quite small. Estimates are not precise. But the National Institutes of Health says the “best estimate is somewhere around 40-100 (annually). So, SCID is a rare condition. On the other hand, researchers have no clear idea of how many babies are not diagnosed and die of SCID-related infections each year. The actual number of cases could be higher.”

Kohn and Orchard’s work has significance beyond SCID. Kohn and others expect that the type of treatment involved can be used to tackle other afflictions. One recent example involves a phase one clinical trial for sickle cell disease, an effort led by Kohn and financed by a $13 million award from CIRM.

The Orchard/Kohn work surfaced today (May 11) in the New England Journal of Medicine in an article that demonstrated the success of the ADA-SCID trial.

“This is encouraging news for all families affected by this rare but deadly condition,” said  Maria T. Millan, president and CEO of CIRM in a news release. “It’s also a testament to the power of persistence. Don Kohn has been working on developing this kind of therapy for 35 years.”

Unanswered was the question of whether children outside of the clinical trial will share the benefit of Kohn’s work and its public funding as did Evangelina Padilla-Vaccaro.

 Below is a Google graphic showing Orchard’s stock price since 2018.

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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.