Managing for resilience: Passage’s ups and downs in gene therapy
When Passage Bio was founded, it was a sort of comeback story for gene therapy pioneer Dr. James Wilson.
After making a name for himself as a researcher, Wilson became head of the Institute for Gene Therapy at the University of Pennsylvania. Then in 1999, a patient in a clinical study died after being dosed with a gene therapy created in Wilson’s lab. The tragic and well publicized event brought the field to a screeching halt. And in 2005, an FDA investigation into the patient’s death led to a five-year ban from clinical trials for Wilson.
Throughout that time, however, Wilson kept at his work outside the clinical arena. In 2002, he published research showing that that gene therapies could be more safely delivered using adeno-associated virus vectors. He also eventually got into the world of startups, first launching Regenxbio in 2009 and a decade later, Passage Bio, which got off the ground with $115.5 million in funding and a handful of promising gene therapy candidates.
Now, just a few years later, Passage is looking for a comeback of its own.
In March 2022, the clinical-stage company announced it was cutting about 13% of its workforce. After a 2021 IPO, the biotech’s market cap had soared to over $1 billion, but within about a year, shares for Passage plummeted about 90% amid a major downturn in the market that saw values tumble across the sector.
“The goal with these changes so soon after I started with Passage was to make all the hard decisions as soon as possible so that we can move into a rebuilding phase.”
Dr. William Chou
CEO, Passage Bio
Then in June, Passage’s CEO abruptly stepped down, opening the door for new leadership. A few months later, Dr. William Chou took the reins as Passage’s new CEO — a job he knew wasn’t going to be easy.
More job cuts followed about a month after Chou came on board along with news that Passage would have to slash its R&D efforts. The restructuring left the company with about 100 employees, two drug candidates in phase 1/2 trials — and a clear impetus among leadership to help Passage bounce back.
“I came in with eyes wide open,” Chou said. “But I had a belief in the science and in the data that has been published preclinically on these programs, so you have to believe in the fundamentals.”
There’s a lot on the line — not just for Chou and Passage, but also for patients.
One of Passage’s two remaining therapies targets GM1 gangliosidosis, a rare inherited condition that attacks nerve cells in the brain and spinal cord, and in its type 1 form, appears in babies where it is fatal before the age of 2. Right now, Passage’s gene therapy, PBGM01, is the only candidate in clinical trials for the disease.
The company’s other lead asset, PBFT02, targets frontotemporal dementia (FTD), a rare genetic mutation that can trigger early onset dementia.
Passage also has three therapies in discovery and is hoping to license out rights for two assets it had to discard — one in Krabbe disease and the other for metachromatic leukodystrophy.
“Stopping our programs had nothing to do with the science and what we think they can deliver to patients,” Chou clarified. “It was a matter of prioritizing the most advanced programs.”
After scaling back its workforce and pipeline, Chou said Passage is at the right size to move forward. The company has a cash runway that should carry it into 2025 and a unique platform developed by Wilson, who now serves as the company’s chief scientific officer.
And Chou, who was formerly the CEO of gene therapy and rare disease specialist Aruvant Sciences, as well as the vice president, global disease lead for Novartis’ cell and gene therapy unit, might be just the right leader to chart its new course.
Here, Chou discusses Passage’s critical milestones for 2023 and his tips for leading through tough times.
This interview has been edited for brevity and style.
PHARMAVOICE: What have been your biggest priorities since taking the helm at Passage in October?
DR. WILLIAM CHOU: Strategic prioritization. We needed to do fewer things better. We also needed to have the financial stability to make sure we can weather this difficult market.
The second is operational focus. We have a lot of patients who need treatment so it’s important for us to deliver clinical data as quickly as possible.
The third is employee reengagement. 2022 was a difficult year for Passage. And our employees are some of the most experienced tech experts in the field, so it’s very important to me that they love being here and are inspired — and that this keeps them here.
Passage has gone through a number of changes in the last few years — from the CEO transitions to restructuring. How have these changes helped Passage?
The goal with these changes so soon after I started with Passage was to make all the hard decisions as soon as possible so that we can move into a rebuilding phase. One of the outcomes was extending our cash runway into 2025. Now we are in a much stronger position to weather the unknowns of a difficult market.
We also have two differentiated programs and having this runway gives us the time to have our clinical data mature.
Are you worried about having to do more fundraising?
In this environment, what I’ve generally heard and seen for gene therapies is that there is more of a premium on generating differentiated clinical data. We are clinical stage with two active clinical programs so I think we’re well positioned to fundraise because we will be generating more data later this year.
How are your AAV gene therapies differentiated from other gene therapies?
First is the unique discovery platform. We get to leverage the expertise of James Wilson and his discovery program at Penn to identify the best combination of mechanisms and capsids — and that combo may be different for every therapeutic area we’re in. It’s not a one-size-fits-all, but we have the best platform to identify that best combo and that is a real scientific advantage.
“Our employees are some of the most experienced tech experts in the field, so it’s very important to me that they love being here and are inspired — and that this keeps them here.”
Dr. William Chou
CEO, Passage Bio
The other way we’re different is our route of administration. We target the CNS through cisterna magna at the base of the skull and we deliver directly there with a single injection. First it gets broad distribution of the vector through the CNS and then you don’t have to give as high of a dose as you would through IV systemic delivery. You also avoid other problems like liver toxicity. And then you are reducing impact of antibodies to the capsids that would neutralize the effects of the capsids.
What’s nice is the whole promise of this route of administration is being borne out in the clinic.
What are the biggest milestones you’re focused on in 2023?
Let me start with our program for patients with the GRN mutation (for frontotemporal dementia). There are about 3,000 to 5,000 patients in the U.S. with this mutation and our preclinical data is the only preclinical data in this disease area that has shown super physiological levels of the missing protein. So we are in a phase 1/2 trial and in the second half of this year, we expect to share initial safety and biomarker data for the first patients treated, and we’ll get to see how this preclinical data translates into the clinic.
Our other milestone will be from our program for GM1 gangliosidosis. We’ve treated eight patients so far and shared data from the first six. In mid 2023 we will share additional data from the final two patients.
What advice would you give other executives in biotech about managing teams through a difficult stretch?
The No. 1 most important thing is keeping focus on the mission. The greatest thing we do in this industry is the impact we have on patients. That is what gets people to go above and beyond at work.
The second is togetherness. That starts from leadership to create an environment where smart people with a lot of ideas can disagree. But do they enjoy that collaboration and brainstorming? If you like the people you work with and you enjoy that work environment you’re going to want to stay.
You also have to believe your individual work makes a difference, and that the things you do on a small level make a big difference for the company. In my career, I’ve gotten a lot of personal satisfaction from that.
That is what we’re trying to accomplish from a cultural perspective.
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