Goldman Sachs Warns That Curing Diseases Through Gene Editing Technology Is Bad For Profit Margins

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Recent breakthroughs in the field of genetic editing have caused a great deal of debate between proponents of the technology who think it can cure many diseases and alleviate human suffering on a scale never before seen and skeptics of the technology who believe that genetic editing is an instance of man playing God and could have terrible unintended consequences.

Another voice has put themselves into the center of the debate: Goldman Sachs. The multinational banking giant warned that genetic editing technology curing many diseases could be bad for business.

According to a CNBC report, Goldman Sachs analysts asked the following question in an Apr. 10 report released to shareholders: “Is curing patients a sustainable business model?”

“The potential to deliver ‘one shot cures’ is one of the most attractive aspects of gene therapy, genetically-engineered cell therapy and gene editing. However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies,” analyst Salveen Richter wrote. “While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow.”

Richter pointed to effective Hepatitis C treatments, as Gilead Sciences cured the disease with an over 90 percent success ratio in patients in recent years. The company’s sales for treatments peaked in 2015 at $12.5 billion, but due to their success, their sales for these treatments in 2018 are expected to be less than $4 billion according to Goldman’s estimates.

“GILD is a case in point, where the success of its hepatitis C franchise has gradually exhausted the available pool of treatable patients,” the analyst wrote. “In the case of infectious diseases such as hepatitis C, curing existing patients also decreases the number of carriers able to transmit the virus to new patients, thus the incident pool also declines … Where an incident pool remains stable (eg, in cancer) the potential for a cure poses less risk to the sustainability of a franchise.”

Solutions to this problem proposed in the paper include: addressing large markets, addressing disorders with high incidence, and rapid innovation combined with portfolio expansion. However, some will be troubled by the fact that a big Wall Street firm like Goldman Sachs would consider diseases and disorders being eradicated too quickly to be a problem at all.

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