By Gerry Smith

When a biotech company promised to study a new treatment for her daughter’s disease, Nicole Johnson was elated. She’d been raising money to research potential cures for FOXG1 syndrome, a rare neurological disorder that had robbed her daughter of the ability to walk or talk. A Dallas-based biotech, Taysha Gene Therapies Inc., agreed to collaborate with her nonprofit on developing a gene therapy for the condition.

But two years ago, Taysha stopped developing the treatment and more than a dozen others. The decision was hardly unusual. Since 2021, drug companies have dropped more than 50 gene therapies. The rising number of abandoned treatments raises questions about whether modifying a patient’s DNA to cure rare diseases can be a lucrative business. And it’s sparked an effort from parents, scientists and entrepreneurs to rescue the drugs that have been left sitting on the shelf.

“We realized we have to figure out how to do this ourselves and run with this ball as far as we can,” says Johnson, whose nonprofit is funding other research at the University of Buffalo. “A biotech company is not going to be our savior.”

Gene therapies change a person’s DNA, the blueprint for life, to fix mutations that cause a wide range of disorders. More than 30 years after the first patient received such a treatment, the science has never been more promising, with growing evidence that the one-time treatments can transform the lives of patients. And yet many biotech companies and investors are scaling back their once grand ambitions in gene therapy.

In September, for instance, Prime Medicine, a gene-editing company that once had 18 programs in its pipeline, said it was narrowing is focus to just five. Others with treatments on the market are struggling to find patients. Bluebird Bio Inc., whose three approved products are all gene therapies, cut 25% of its staff last month and said there was “substantial doubt” it can stay in business.

Venture capital funding for gene therapy startups has fallen from $3.3 billion in 2020 to about $400 million so far this year. Wall Street’s excitement has also cooled: The combined value of publicly traded genetic medicine companies has plunged 63% from its peak in August 2021, a decline of about $250 billion, according to the investment bank Chardan.

Several factors have cast a cloud over the industry. Creating gene therapies, which often involve using the shell of a virus to deliver a working copy of a gene to a cell, can take years and cost hundreds of millions of dollars. With interest rates high, it’s become harder for biotech companies to raise money from investors. Some clinical trials for gene therapies have failed. And even when companies make it all the way to FDA approval, some have faced resistance from insurers or been slow to find patients.

“It’s a bit of a perfect storm for companies that are working in this space,” says Jorge Conde, a general partner at Andreessen Horowitz, which has invested in gene therapy companies. “It's unfortunate, because the promise here is substantial.”

Among the almost 20 gene therapies on the US market, some have been successful, including Novartis AG’s treatment for spinal muscular atrophy, or SMA, and Sarepta Therapeutics Inc.’s treatment for Duchenne muscular dystrophy. They have done brisk sales by catering to highly motivated families whose children’s lives hang in the balance. BioMarin Pharmaceutical Inc., by contrast, has seen little uptake for its gene therapy for hemophilia, in part because patients with the bleeding disorder already have many other effective drugs. Meanwhile, insurers and employers have begun to push back on paying for gene therapies that can carry upfront costs of $3 million or more for a single dose.

It’s a dramatic change from just a few years ago, when excitement about the cutting-edge medicine was hitting a fever pitch. In 2016, Pfizer Inc. bought a gene therapy company and pledged to become a leader in the field. At a 2017 conference in Boston, a group of neurologists were shown a video of infants with SMA who had participated in a clinical trial for what would become Zolgensma. The children were sitting up without help, something that children with the disease normally can’t do. The audience broke into applause. The next year, Novartis bought the developer of that gene therapy for almost $9 billion. Several new gene therapy companies launched and went public. By 2017 the FDA approved the first gene therapy. Meanwhile, the science kept advancing, notably the discovery of new forms of gene editing that make precise changes to a patient’s DNA, opening the door to treating more diseases.

But over the past few years, large drugmakers and investors have grown more excited about medicines that treat large populations, particularly obesity, and less interested in rare diseases that are good candidates for gene therapy. Pfizer largely left the field last year, selling its portfolio of early-stage gene therapies to AstraZeneca Plc. Bluebird Bio, valued at almost $12 billion in 2018, now has a market cap of about $100 million.

There’s no shortage of ideas on how to get more potential cures to patients. Some insurers are creating plans to make gene therapies more affordable by giving employers access to a bunch of them for a low monthly fee, like a Netflix subscription. Last year, the nonprofit Innovative Genomics Institute, founded by gene editing pioneer Jennifer Doudna, laid out a plan to cut the price of gene therapies tenfold. Among other things, it involves lowering the cost of manufacturing and creating public benefit corporations, which are required to balance making profits with helping society.

Donald Kohn has done just that. Two years ago, Orchard Therapeutics returned to the University of California at Los Angeles the rights to a gene therapy for an extremely rare immune disorder called ADA-SCID, sometimes called “bubble boy disease.” Kohn, a professor at the university, is now treating children with the condition while seeking investors for his public benefit corporation. He’s hoping that this new business model—without the same demands to maximize profits—will allow him to charge a more affordable price. In the meantime, he's not sure how long he can continue. “It’s so tenuous,” Kohn says. “If I get hit by a bus tomorrow or can’t get my next government grant, this therapy could disappear.”

Kohn is part of a small group of scientists, parents and entrepreneurs trying to save gene therapies that have been abandoned. In August, gene therapy pioneer Jim Wilson started a company, Gemma Biotherapeutics, by licensing treatments that another biotech gave up on. Earlier this year, Craig Martin created a nonprofit biotech, the Orphan Therapeutics Accelerator. His plan is to obtain the rights to gene therapies for rare diseases that companies have shelved at little or no cost, and then finish development.

“Hopefully we can get dozens of these to patients,” Martin says. “But it’s probably going to require a mix of different models to cover the thousands of rare diseases that still need treatments.”

Terry Pirovolakis has a similar plan at Elpida Therapeutics, which he started as a social purpose corporation, an entity that combines a social mission with making money. Every week or two he gets a call from a biotech company or foundation asking if he wants to take over a gene therapy it can no longer afford to develop. “We have cures for kids, but we have a funding problem,” Pirovolakis says. “The fundamental problem with gene therapies is the astronomical cost of making them.”

Few companies scaled back their ambitions more dramatically than Taysha. The company once had 18 gene therapies in its pipeline. Now it’s focused on just one, for Rett syndrome, a genetic disorder that impairs a person’s ability to move and communicate. RA Session, the company’s former chief executive officer, says he believed a few years ago the company had a “platform” that would make it easy to treat each disease with the same method. But it became a victim of the difficult fundraising environment, he says. And in hindsight, he regrets taking on so many diseases at one time. The hardest part, he says, was telling disappointed parents that Taysha was giving up on a gene therapy for their child’s disease.

“It was, for lack of a better word, hell,” Session says. “There’s no reason that would ever be good enough for them, nor should it be.”

When Taysha stopped its work on a gene therapy for a rare neurological disorder called SURF1 Leigh syndrome, the decision was “soul-crushing,” says Kasey Woleben, whose son, Will, was born with the condition. Since then, Woleben has tried to persuade other drugmakers to pick up the gene therapy, but all of them have passed, telling her they can’t make any money off it. The nonprofit she co-founded has raised about $2 million to continue research, but it’s about $2 million short of what’s needed to make a drug that meets regulators’ standards. Without financial help from a biotech company, parents of children with the disease are left to raise money on their own. “We have to be drug manufacturers, basically,” Woleben says.

After Taysha dropped its gene therapy for another rare neurological disorder, SLC6A1, “all progress virtually stopped,” says Amber Freed, whose son, Maxwell, was born with the disease. Her nonprofit funded the early research of a gene therapy for the condition and donated it to UT Southwestern medical center in Dallas. Two years later, Taysha still hasn’t given the university back the rights to the drug, preventing further studies.

“Your kid gets sick, then your kid becomes more sick, and then you just watch the technology be shelved and wait for never,” Freed says.

A Taysha spokesperson says the company is “committed to doing right by patients and patient advocacy groups” and is exploring ways to develop the treatments it has deprioritized.

Freed’s foundation is now working with a new biotech company, Galibra Neuroscience, whose mission is to develop gene therapies for conditions like her son’s. “I absolutely believe gene therapy will be the medicine of tomorrow,” she says. “This will be the closest thing to a cure our kids will know in their lifetime.”

In 2011, Johnson’s daughter, Josie, was born with FOXG1 syndrome. Josie, who’s now 12, suffers frequent seizures and can’t walk or talk or sit up without falling over. After Taysha dropped plans to develop a gene therapy, Johnson was deflated. But it also “sparked a fire,” she says. Her nonprofit became a “virtual biotech company,” funding a lab with about 20 researchers to study the disease. The research is being led by a husband-and-wife team of scientists at University of Buffalo who have a child of their own with the same disorder. Last month, the university held a ceremony for the opening of a new research center for FOXG1. Johnson hopes to have a gene therapy from the center enter clinical trials in 2026.

“It would be exciting for a biotech company to take this on,” she says. “But we’re not going to wait for that.”