Mustang Bio Looks To Change Scope Of Treatment For Bubble Boy Disease

Apr. 25, 2019 2:32 AM ETMustang Bio, Inc. (MBIO)GSK, NVS, ORTX3 Comments2 Likes


  • Mustang Bio presented positive data from a phase 1/2 study using MB-107 to treat patients with a rare disease known as X-linked severe combined immunodeficiency.
  • MB-107 was successful for patients with X-linked severe combined immunodeficiency, in that it was able to allow them to come off of isolation and return home.
  • Orchard Therapeutics has its own gene therapy product Strimvelis, which treats a disease similar to XSCID known as Adenosine deaminase deficiency.
  • A Major risk for gene therapy companies is getting insurers on board to pay for treatment, because several gene therapies could cost anywhere from $1 million to $5 million per treatment.
  • Looking for a portfolio of ideas like this one? Members of Biotech Analysis Central get exclusive access to our model portfolio. Start your free trial today »

Mustang Bio (NASDAQ:MBIO) surged higher the prior week, after it highlighted substantially positive data in a phase 1/2 study using its gene therapy to treat patients with X-linked severe combined immunodeficiency (XSCID). It was shown that treatment with MB-107 was able to restore the immune system for these patients with the disease. This bodes well for the biotech's gene therapy program, as long as data can continue to be reproduced in a larger group of patients. Mustang Bio's gene therapy program is only a small part of its pipeline, because the other larger portion involves multiple studies using CAR-T treatments for cancer. Competing products in the XSCID space may pose as a major risk for the MB-107 product candidate.

Improvement For Patients With Rare Disease

XSCID is also known as "bubble boy" disease. That's because these patients have a severely impaired immune system and are forced to live in highly sterile environments. An impaired immune system can't do well against viruses, bacteria and other diseases. For a person with a functioning immune system getting a virus or bacteria is not life-threatening because the body can fight it off most of the time. However, for patients with XSCID getting an infection can be life-threatening. The current standard of care (SOC) for this rare disease is allogeneic bone marrow transplant. Allogeneic meaning that there has to be a matching donor, otherwise it can't be done. The problem with doing such a transplant is that it carries a lot of risks on its own. Some risks can even be fatal. Here are some risks of undergoing an Allogeneic bone marrow transplant:

  • Organ damage
  • Graft-Versus-Host-Disease (GvHD)
  • formation of new cancer
  • Death
  • newly presented infections

As you can see above, a bone marrow transplant may not be a highly recommended treatment option for patients with XSCID. Gene therapies are becoming more prevalent in being able to treat rare diseases in a safe and effective manner. Those who had the disease, recruited into the phase 1/2 study, were under the age of 2 years. There is another study that will involve patients who are over the age of 2. A total of 10 patients were recruited into the study. Data highlighted in the New England Journal Of Medicine dealt with the first 8 patients evaluable. It was noted that those given MB-107 were able to come off of isolation and return home safely. That's impressive for this patient population. The name "bubble boy" disease was coined because these patients have to be isolated from others because of their weakened immune system. Most of the treated patients left the hospital one month after having received MB-107.

Potential Risk

A big risk for MB-107 in XSCID is that the population is very small. It is estimated that this disease affects 1 in 50,000-100,000 births. That means the market opportunity may be limited. However, these types of gene therapies that treat rare diseases tend to cost a lot. Some big pharmaceutical companies are looking at high price tags for their gene therapy products. For example, Novartis (NVS) has a gene therapy known as Zolgensma which is being developed to treat Spinal muscular atrophy (SMA) Type 1. It was reported by Reuters that Novartis is looking at charging $4 million to $5 million for a treatment. There is no doubt that's a lot of money for one treatment; however, the biggest challenge is to educate insurers that the money is well spent. For instance, with current treatments, patients have to take a drug for the rest of their lives. One example could be diabetes drugs, because a patient can never stop taking them. In the instance with Novartis' Zolgensma, once a patient is treated they are cured. So in essence it's a trade-off. Instead of receiving the cash over the patient's entire lifetime, the money is coming in upfront with a "one-off" treatment. GlaxoSmithKline (GSK) had a gene therapy known as Strimvelis, which was approved to treat something similar to XSCID known as Adenosine deaminase deficiency (ADA-SCID). GlaxoSmithKline's problem was that it was offered at only a center in Europe and it just didn't gain traction. It was forced to sell its rare disease gene therapy assets, including Strimvelis to Orchard Therapeutics (ORTX). That's the risk I'm trying to point out here with Mustang Bio and its gene therapy. With the population being so small, it might be an issue. In addition, there is the challenge of being able to get insurers to pay millions of dollars per treatment. There is no guarantee that insurance companies will be willing to do so.


According to the 10-K SEC filing, Mustang Bio had cash, cash equivalents, short-term investments and restricted cash of $34.6 million. Considering that this cash wouldn't be enough to fund its operations for the foreseeable future, it chose to raise additional cash. The biotech did so through a $20 million venture debt financing with Horizon Technology Finance. The good news is that Mustang took the $15 million portion upfront upon closing of the deal. The other remaining $5 million is contingent upon achieving certain preset milestones. This cash will be good to fund the company for quite some time, so that it can advance its cell and gene therapy products.


Mustang Bio achieving positive results from its phase 1/2 study using MB-107 for XSCID is good news for patients and for investors. The problem is that there are several risks involved with this clinical program. The first risk is the competitor out there. For instance, Orchard Therapeutics has Strimvelis, which has been approved for Europe to treat patients with adenosine deaminase severe combined immunodeficiency. The biggest risk of all is the pricing of the gene therapies once they are approved for distribution. If Mustang gets MB-107 approved for XSCID, it will have to be priced for perfection. Even then, a high price tag of $1 million or more could pose a significant challenge in getting insurers on board. There is no guarantee that the product will sell well. The good news is that Mustang's pipeline is split into cell and gene therapies. That means as long as it advances its other products in the pipeline it should be okay.

This article is published by Terry Chrisomalis, who runs the Biotech Analysis Central pharmaceutical service on Seeking Alpha Marketplace. If you like what you read here and would like to subscribe to, I'm currently offering a two-week free trial period for subscribers to take advantage of. My service offers deep dive analysis of many pharmaceutical companies. The Biotech Analysis Central SA marketplace is $49 per month, but those who sign up for the yearly plan will be able to take advantage of a 33.50% discount price of $399 per year.

This article was written by

Terry Chrisomalis profile picture
Actionable ideas on small-large cap biotech stocks through deep analysis.

I am the Founder of Biotech Analysis Central, A subscription service on Seeking Alpha's Marketplace. If you want to learn more about biotech investing or you want to check out my biotech analysis you can do so with a free 2-week trial to my service. Just hit the "Learn More" button on the bottom of the Marketplace Research Tab. I have a Bachelors of Applied Science Degree In Technology Management, Industrial and Business Services Management from St. Petersburg College Florida. I have been investing in biotech stocks for many years, and I prefer to invest as a long term investor. With that In mind I seek stocks that have long term value! I primarily Like to Invest In biotechnology stocks and I accept the risks. I Write for the Healthcare Sector and Stock market in general. I contribute to Seeking Alpha.

You can follow me on under the name BiopharmaPro where I currently have (62.5K) followers. Join me in my quest to find the best biotechnology stocks that deliver results to help patients with new treatment options.


Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments (3)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.