The biotech world is feverishly awaiting the Food and Drug Administration’s potential approval of a gene therapy from Novartis (NVS), due in May.
Spark Therapeutics (ONCE) was the first biotech to grab approval in the U.S. for a gene therapy. Its drug, Luxturna, treats a rare blindness-causing disorder. But Novartis’ Zolgensma is targeting a much larger population of patients who suffer from spinal muscular atrophy. And that’s why it’s important.
Brad Loncar, a portfolio manager, calls 2019 a pivotal year for the gene therapy. Novartis has the potential to set an important precedent in gene therapy pricing. Other biotechs are also watching to see how Novartis builds up its manufacturing — a key challenge in the space.
“That’s an amazing therapy for a terrible disease,” Loncar told Investor’s Business Daily. “But, if after that gets approved, they have a hard time getting payers to buy into that and it has a poor launch, that’s going to have a bad effect on the entire gene therapy field.”
Why Gene Therapies Could Be Expensive
Spinal muscular atrophy results in muscle atrophy and weakness. The Spinal Muscular Atrophy Foundation estimates 10,000 to 25,000 children and adults in the U.S. are afflicted with it.
Spark’s Luxturna, on the other hand, targets an inherited retinal disease. An estimated 1,000-2,000 patients in the U.S. have vision loss due to the genetic mutations Luxturna targets, Spark says. Luxturna costs $425,000 per eye.
Novartis maintains its gene therapy would be cost effective at a price tag of $4 million to $5 million.
The reason is gene therapy could be a one-time treatment. So far, the data are promising but short-lived. Biotechs working in the space say the one-time payout could be less expensive than the lifetime cost of living with the disease — including chronic medicines and hospital visits.
Novartis also could take a clue from Biogen (BIIB) which sells Spinraza, the first approved treatment for spinal muscular atrophy. The drug, developed in a partnership with Ionis Pharmaceuticals (IONS), goes for $750,000 in the first year.
Will Insurers Pony Up For Gene Therapy?
But will insurance cover that cost? Audentes Therapeutics (BOLD) Chief Executive Matthew Paulson says biotechs will have to innovate on the commercial side. For Novartis, that could potentially mean value-based pricing where the drug’s price declines if the effect wears off over time.
“We’ve solved the scientific and development challenges,” he said during a recent talk at an industry conference. “But what if patients can’t get access because of challenges in the medical system?”
Bluebird Bio (BLUE) Chief Financial Officer Jeffrey Walsh says pricing, manufacturing and distribution will all get a face-lift as gene therapies become more popular. Bluebird is at a unique junction. The biotech works in gene therapy, gene editing and cell therapy.
“Novel therapies are coming in and they are going to change all of that,” he said during the conference. “I can’t see how the infrastructure looks the same — not just around pricing and distribution, but also how it’s going to get delivered.”
Cell Therapy Challenges Offer Some Clues
Manufacturing remains a key challenge for both cell and gene therapies.
It’s important to remember these are two different modalities. Gene therapy involves the transfer of genetic material — oftentimes within an emptied-out virus — and the uptake of appropriate cells in the body. Cell therapy involves the transfer of cells with key functions into a patient.
In medicine generally, it’s easiest to manufacture in batches. That’s not possible in current cell therapy which is tailored to individual patients.
Some companies, though, are working on the possibility of using donor cells. In this method, known as allogeneic cell therapy, the treatment could become an “off-the-shelf” drug.
Quick Manufacturing Moves
Meanwhile, Novartis’ gene therapy will go after a bigger group of patients than Spark’s Luxturna, so its manufacturing efforts will be of interest to rivals.
Gene therapy ramped up much quicker than most expected, Bluebird’s Walsh said.
“I think as an industry we weren’t quite expecting the number of bold moves we needed to take to implement this unique care paradigm,” he said during the conference. “Now we’re getting out in the open all of the challenges of how to commercialize a therapy like this.”
He added: “We knew we were going to stumble because you’re trying to create something that doesn’t exist.”
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