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The Way We Treat Cancer Will Be Revolutionized As Gene Therapy Comes to the U.S.

August 30, 2017, 5:35 PM UTC

Gene therapy has officially arrived in America.

The Food and Drug Administration (FDA) on Wednesday approved Kymriah (also known as tisagenlecleucel), a groundbreaking new type of cancer treatment called CAR-T from Swiss pharmaceutical giant Novartis, in a move the agency itself described as a “historic action.” Novartis stock remained relatively flat after the approval.

The so-called chimeric antigen receptor T-cell (CAR-T) therapy is the first of its kind to win a regulatory green light. And while Novartis’ success was widely expected, the FDA’s decision to rapidly clear the drug underscores the excitement that doctors and the life sciences community feel about such therapies, which have been shown to eliminate all signs of aggressive blood cancers in some patients after just one treatment in clinical trials. Kymriah is approved for use in people who are up to 25 years old and have difficult-to-treat or relapsed B-cell precursor acute lymphoblastic leukemia (ALL).

In CAR-T cell therapy, every single dose of a treatment is unique and completely personalized to individual patients. That’s because the technology involves extracting a patient’s immune cells, using genetic technology to make them home in on (and destroy) cancerous cells, and then re-inserting these powerful new cancer killers into the patient.

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The implications are simply staggering, according to Dr. Kevin J. Curran, a pediatric oncologist at the world renowned Memorial Sloan Kettering Cancer Center who specializes in treating children with CAR-T cell therapies. “It’s really transformative,” Curran told Fortune in an interview. “It’s shown a massive response rate in people with these cancers. It’s given hope to patients and parents. If other treatments fail, we can tell them, we have this new weapon in our arsenal that teaches your cells to fight cancer.”

Curran says this is just the first step, too, and that the technological underpinnings of CAR-T will hopefully extend to breast cancer, prostate cancer, and others with solid tumors. (Currently, CAR-T companies have been focusing on blood cancers.) “We also want to see if we can expand it to other diseases down the line,” he said.

One other way that Novartis is making waves with Kymriah? Pricing. As you might expect, the intensive process behind this technology isn’t cheap. In fact, Kymriah will come with a list price of $475,000 for a one-time treatment, the company announced in a conference call Wednesday afternoon.

But Novartis, long a proponent of outcomes-based pricing where drugs are based on how effective they are for patients, announced that it’s collaborating with the Centers for Medicare & Medicaid Services (CMS) on a unique pricing model. If children and young adult patients with ALL don’t respond to Kymriah by the end of the first month after treatment, Novartis won’t be reimbursed for the drug. “[This is a] first-of-its-kind collaboration with a technology that has the potential to transform cancer care,” said Novartis CEO Joseph Jimenez in a statement.

“That’s a really groundbreaking way to price a medicine,” said Memorial Sloan Kettering’s Curran. “It’s a very forward-looking methodology.”

The gauntlet has now been thrown down for Novartis’ would-be competitors—which, as of just this week, now includes biotech giant Gilead. On Monday, Gilead announced that it would be buying another CAR-T specialist called Kite Pharma for $12 billion, giving the company a major stake in a fledgling and hotly-watched cancer space. Kite’s own CAR-T drug is expected to win FDA approval by late November.