The first medicine approved for a liver disease known as MASH is off to a faster launch than Wall Street analysts expected, according to quarterly results disclosed Wednesday by developer Madrigal Pharmaceuticals.
Madrigal said its drug Rezdiffra, which was approved by the Food and Drug Administration in March and became available the following month, generated $14.6 million in U.S. sales in the second quarter. As of June 30, more than 2,000 patients were on treatment and coverage policies were in place for more than 50% of people with commercial health insurance, the company said.
While only an early snapshot, the results surpassed consensus analysts estimates of about $4 million and have encouraged Madrigal to commercialize Rezdiffra in Europe on its own. An approval decision there is expected next year. “We're still in the early stages, but we are confident that we're building the foundation needed to create a blockbuster medicine,” CEO Bill Sibold told analysts.
Rezdiffa’s launch is barometer for what’s long been viewed by Wall Street analysts as a significant market opportunity.
The drug is the first medication for MASH, or metabolic dysfunction-associated steatohepatitis, a condition characterized by the buildup of liver fat and inflammation that causes progressive organ damage. The FDA has cited estimates that, in the U.S. alone, about 6 million to 8 million people have MASH with moderate-to-advanced liver scarring, making them eligible for treatment with Rezdiffra.
Yet the sales outlook for Rezdiffra has been debated. MASH tends to go undiagnosed for years, is usually confirmed through a liver biopsy and some of its symptoms can be addressed through diet and exercise. The drug’s benefits have also been described by some outside experts as modest, and its yearly per-patient list price of $47,400 was higher than analyst expectations of about $30,000. In-demand medicines for weight loss have produced early results in MASH that compare favorably with Rezdiffra, too.
While the FDA didn’t direct patients to undergo a liver biopsy before treatment — a hurdle that’s been seen as a barrier to using MASH drugs — the Veterans Affairs Department has. Analysts are keeping an eye on whether large commercial insurers might follow suit or instead endorse less invasive alternatives.
Drug access without a biopsy requirement or “onerous preauthorization will be key to driving prescriber and patient uptake,” wrote Leerink Partners analyst Thomas Smith, in a research note earlier this week.
On a conference call Wednesday, Sibold said that, so far, less than 5% of patients with commercial insurance have been asked to get biopsies, and “virtually all” Medicaid policies have been accepting non-invasive diagnostic tests. The company expects to obtain Medicare coverage next year, Sibold said.
“There are some outliers out there that are requiring biopsies, so we'll keep working at it,” he said. “We don’t want any patients to be subjected to it.”
Analysts pressed executives on whether Rezdiffra’s fast start was due to actual demand for the drug or because suppliers stocked up on inventory. Chief Financial Officer Mardi Dier said sales were driven by “mostly demand,” though she declined to provide specifics.
But Dier, and other Madrigal executives, also reiterated that the launch remains in its early stages. “We just want everyone to be careful not to get ahead of ourselves,” she said.
Madrigal has told investors to anticipate slow initial uptake that accelerates afterwards, as awareness increases and the company gets broader insurer support. The company has been aiming to get about 80% of people on commercial insurance covered by the end of the year, and on Wednesday indicated it’s on track to meet that goal.
“It takes time when you're launching a first-in-disease product in a community that's never had anything,” Sibold said. However, “we think that we are in the lead position now, and we think that we will be in the lead position for a long time.”
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