Ocular disease has long been an area of significant focus in the gene therapy space. But even though excitement has existed since the late 1990s, the road toward developing a viable gene therapy drug has been paved with failures. The reasons for these failures are manifold, and include challenges with immune stimulation leading to inflammation; immunity preventing cellular delivery; insufficient delivery of vector to target cells; imperfect delivery and injury with sub-retinal injection procedures; insufficient expression of the therapeutic transgene; insufficiently understood disease biology; inadequate formulations; and lack of clarity from regulatory agencies on acceptable efficacy safety endpoints in clinical trials.
Founded by several ophthalmology and gene therapy leaders, Avalanche sought to succeed where others had not. Rather than going after rare genetic ocular diseases with small populations, little competition, and greater flexibility from the FDA, Avalanche decided to tackle Wet Age Related Macular Degeneration (AMD), a progressive form of vision loss that affects millions of people worldwide, and which currently represents a multi-billion dollar market. The company's lead drug, AVA-101, was developed to replace current AMD therapies, which require monthly eye injections, with a one time treatment.
Unfortunately for Avalanche, AVA-101 essentially failed a Phase IIa trial, despite showing promise in an earlier Phase I study. The company has now put AVA-101 development on hold while the cause for the failure is assessed, and has shifted efforts toward a second program, AVA-201. While 101 is delivered via a challenging sub-retinal procedure, 201 is being developed to allow delivery via safer and simpler intravitreal injection. This type of delivery has not been feasible with gene therapies previously, but Avalanche has been able to develop suitable vectors using directed evolution. The company is now guiding that it will declare a development candidate for AVA-201 by the end of the year, which most likely means that a clinical trial would start late in 2016.
Whether or not AVA-201 ultimately succeeds in the clinic (it definitely could), Avalanch is currently undervalued. It is now trading at cash value, and still has about $270 million in the bank with a burn rate of only $10 million per quarter. This level of funding is more than enough to take AVA-201 through clinical proof of concept. In other words, the company's prospects are now valued at $0, as major investors have fled the stock in disappointment of AVA-101's performance. DEC plans to hold the stock at least until the start of Phase I clinical trials.
