Delfi Krishna: How to Compete in the Gene Therapy Market

Cell and gene therapies represent an exciting and complex new treatment type, with the potential to treat a vast range of indications. In some cases, this therapy offers the possibility of a disease cure with a single treatment. During an HSI lunchtime seminar, Delfi Krishna, Vice President of Cell Therapy Portfolio Development at Immatics, a biologics company developing cancer treatments, discussed the multi-disciplinary business environment required for a company like Immatics to be successful.

Immatics is a German biotech company with the mission to bring the power of T-cells to cancer patients. It is one of the players in the biologic/biopharma landscape, which Krishna described in glowing terms, with several positive financial and regulatory indicators. This industry has projected sales of $27B by 2026. Regulatory approvals are encouraging with several anticipated in the US and Europe this year. There are many clinical trials across several therapeutic areas, with oncology leading by a wide margin. Investment in this industry remains high despite the economic downturn with venture capital supplying a majority of the funds. And, a massive innovation ecosystem has developed in the biologics industry.

Given such favorable conditions, Krishna asked, why is the decision to invest so fraught? Krishna, currently an MIT Sloan EMBA student, asked the audience to think back to their study of business strategy and the concepts of value creation and value capture. For a new biologic treatment, the bottom line for value creation is clinical benefit relative to current standard of care. Two additional aspects of value are patient benefits: survival and quality of life. So, the questions for a small company such as Immatics are 1) is there a value capture opportunity and 2) is a biologic company the size of Immatics able to capture that value.

Krishna gave an example to drive these ideas home. In the metastatic melanoma treatment industry, the number of patients is increasing and survival for some patients is poor. However, despite the size of the market, Immatics would pass on this general opportunity because there are many big pharma companies already in that market and the competition is high.

But Krishna went on, if cell therapy companies are precise about the markets they choose to enter, they could be successful in what appears to be a saturated market. In metastatic melanoma, there is an unmet treatment need for stage four patients. Those with stage four cancer have exhausted the existing standard of care and have no more options. If Immatics develops something for these patients that extends the years and quality of life, it could capture this market.

Identifying the target market is not the end of the strategic decision making. The cell therapy drug value chain is complex and a small company, especially, needs to think carefully about its build/partner/buy decisions. The best result would be a value chain that lowers costs and drives a high willingness to pay.

Krishna ended her talk with some of the organization requirements for a cell therapy company to be successful. These companies have to be nimble, value collaboration over silos and be comfortable with risk. Matrixed teams must be able to identify the profile of appropriate markets. Krishna’s Sloan School learnings are integral to her current work. Her talk was a perfect example of part of HSI’s mission: using management thinking, skills and expertise to address healthcare challenges.