Novartis, Spark gene therapies win a boost with soup-to-nuts Cigna coverage

A recent controversy over data manipulation during the development of Novartis’ new gene therapy, Zolgensma, has overshadowed another issue pressuring the spinal muscular atrophy (SMA) treatment: its $2.1 million price.

But Zolgensma’s sticker price remains a hurdle—and the same goes for the high cost of the other gene therapy on the market, Spark Therapeutics’ $850,000 eye drug Luxturna.

Fortunately for Novartis and Spark, one major payer, Cigna, says it has figured out how to cover those two pricey treatments. Even better? It’s at no cost to patients.

Cigna announced that patients who receive Zolgensma or Luxturna will be fully covered, with zero out-of-pocket costs. The new gene therapy program will bring together services from many of Cigna’s business segments, including the pharmacy benefit manager Express Scripts, to offer patients “personalized and expert care,” the insurer said in a statement.

Steve Miller, M.D., chief clinical officer of Express Scripts and a longtime critic of rising drug prices, said expensive therapies for rare diseases remain a growing challenge for the healthcare system. Cigna acquired Express Scripts for $67 billion last year.

“The trouble is, while [gene therapies] are incredibly innovative and very effective, they are wildly expensive,” Miller said in a video posted on Express Scripts’ website. “Just like the pharmaceutical companies have been very innovative in bringing these products to the marketplace, we have to be equally innovative in figuring out how we make them accessible and affordable for the patients and their families.”

Under the Cigna program, health plans will pay for the gene therapies on a per-member, per-month schedule. In the video, Miller called it a “cost-recovery” model for Cigna. “So we are not looking to profit off this,” he said.

The Cigna plan marks the second piece of good reimbursement-related news in as many days for Novartis. The company markets Spark’s Luxturna outside the U.S., and Wednesday, England’s National Institute for Health and Care Excellence (NICE) said it would back the drug.

Zolgensma is not yet approved in Europe—Novartis is expecting a verdict in the fourth quarter—but the company will no doubt face reimbursement challenges there as well. To win NICE’s backing for Luxturna, it had to offer England’s National Health Service a confidential discount.

As for the ongoing data-manipulation drama, Novartis is still working to calm regulators’ nerves. In August, a newly released FDA report revealed details about how some data from a mouse study of Zolgensma had been inaccurately reported. The FDA has said it believes the treatment is safe and effective, and it will remain on the market, but the agency is weighing civil or criminal action.

AveXis President David Lennon told analysts in August that the European Medicines Agency is aware of the FDA’s investigations into the Zolgensma data issues and that he doesn’t expect any delays in the approval of Zolgensma in Europe

Novartis is so optimistic about gene therapy, in fact, the company’s executives reportedly told journalists in Germany this week that gene and cell therapies would ultimately account for 15% of total revenues. It has a long way to go, however: Novartis’ CAR-T treatment for blood cancer, Kymriah, has brought in just $103 million of the company’s $23 billion in sales so far this year.

Novartis has not yet announced sales numbers for Zolgensma. In July, CEO Vas Narasimhan would only say the launch is “on track” and in line with expectations.

Cigna’s new payment plan for gene therapy will no doubt be viewed as good news for Roche, too, as it works to complete its planned $4.8 billion acquisition of Spark. The company has delayed its tender offer several times, citing antitrust investigations, but it still expects to seal the deal by the end of the year.

Meanwhile, Cigna’s Miller remains vocal on the high cost burden presented by new gene therapies. Two years ago, he noted that there were more than 1,000 gene therapies in the biopharma pipeline, and clearly he’s still worried about how the health system will pay for them. Cigna’s new program, he said in the video, “just takes care of the first two [gene therapy] drugs that are in the marketplace, but we know many drugs are behind that.”

https://www.fiercepharma.com/pharma/cigna-gives-gene-therapies-novartis-and-spark-a-boost-comprehensive-payment-plan

Autolus Publishes Data on Novel CAR-T AUTO1 Leukemia Treatment

 Autolus Therapeutics plc (Nasdaq: AUTL), a clinical-stage biopharmaceutical company developing next-generation programmed T cell therapies, on Tuesday announced that the journal Nature Medicine has published both pre-clinical results and clinical data from the ongoing Phase I CARPALL trial of AUTO1, demonstrating the potential of the company’s novel CAR T therapy targeting CD19 in development for the treatment of pediatric acute lymphoblastic leukemia (ALL).  The paper reports that AUTO1, or CAT Chimeric Antigen Receptor T cells (CAT CAR T), utilizes a binder with a fast off rate and showed both increased proliferation/cytotoxicity in vitro and enhanced proliferative capacity and anti-tumor activity when compared to FMC63 CAR T therapies in vivo.  In the Phase 1 clinical trial, 86% (n=14) of recurrent/refractory pediatric ALL patients achieved molecular complete remission after a single dose, with a median duration of remission of 7.4 months and no severe cytokine release syndrome (CRS; ≥ grade 3 or 4), in this relapsed and/or refractory patient population.

“The safety profile emerging from this pediatric study is encouraging.  AUTO1 was well-tolerated and we did not see severe cytokine release syndrome or neurotoxicity seen in other ALL programs,” said Sara Ghorashian, PhD, Molecular and Cellular Immunology Section, UCL Great Ormond Street Institute of Child Health and a co-author of the paper.  “It is very promising to see these strong remission rates and excellent CAR T cell expansion and persistence, which give us hope that AUTO1 could improve outcomes for these patients.”

“The publication in Nature Medicine is a nice validation of our AUTO1 pre-clinical and Phase 1 clinical data,” said Dr. Christian Itin, chairman and chief executive officer of Autolus.  “AUTO1 CAR- T cells are designed to effectively engage leukemic cells while avoiding excessive immune stimulation. This profile results in an improved safety profile compared to current treatments, while achieving a high level of clinical activity.  We are currently testing the activity of AUTO1 in adult patients who typically are even more susceptible to severe immunological adverse events than pediatric patients.”

https://www.globenewswire.com/news-release/2019/09/03/1909704/0/en/Autolus-Announces-Publication-in-Nature-Medicine-of-Data-Supporting-the-Development-of-AUTO1-for-Treatment-of-Patients-with-ALL.html

Roche doesn’t need M&A to boost sales, sees growth from own meds – CEO

Swiss drugmaker Roche sees sales rising in the longer term from medicines in its own pipeline, Chief Executive Severin Schwan told Reuters on Friday, adding he does not want or need to do takeovers to mitigate looming patent losses.

In an interview at Roche’s Basel headquarters, Schwan also said ongoing U.S. Federal Trade Commission (FTC) scrutiny of Roche’s $4.3 billion takeover of Spark Therapeutics came as a surprise, forcing delays.

Roche has twice upgraded 2019 sales forecasts, the latest time to mid- to high-single-digit percentage rate growth, as medicines including Ocrevus for multiple sclerosis and Hemlibra for haemophilia A offset incursions by rivals’ copies of its $22 billion-per-year cancer trio Herceptin, Rituxan and Avastin.

Schwan sees these newer drugs — combined with late-stage trial hopefuls including for Huntington’s disease, lupus and spinal muscular atrophy — maintaining momentum without forcing him to look beyond Roche’s own research departments for help.

“I feel confident that we have a strong pipeline that would support growth in the longer term,” said Schwan, in his 12th year as CEO.

Roche shares have risen 11% this year, lagging the 20% gain of the Stoxx European Health Care Index <.SXDP>, as investors continue to worry about rivals’ copies taking market share in Europe and increasingly in the United States, Bank Vontobel analysts said in an Aug. 30 note.

Schwan distanced himself from big takeovers, saying M&A to spur growth is too risky.

“I don’t think it’s a wise strategy in the long term to fill a growth gap by M&A,” he said. “If you start filling gaps, you run the risk that you overpay or you take on board assets which do not fit strategically.”

Still, Roche is screening bolt-on technology deals, Schwan said, such as the Spark transaction to add one approved gene therapy, $850,000-per-patient blindness treatment Luxturna, and several others in trials, including for haemophilia A.

The FTC’s move to put the Spark transaction under its microscope came unexpectedly, said Schwan, forcing him to abandon original expectations to take ownership by June.

It is now expected by year’s end, he said, at identical terms announced in February.

“We thought we should close this relatively quickly without a more-detailed review,” Schwan said. “That was not in line with our expectations.”

https://www.marketscreener.com/SPARK-THERAPEUTICS-INC-20798561/news/Roche-doesn-t-need-M-A-to-boost-sales-sees-growth-from-own-meds-CEO-29169399/

Novartis wins FDA’s breakthrough tag for lung cancer hopeful

 Novartis has secured the U.S. Food and Drug Administration’s Breakthrough Therapy Designation for its investigational medicine capmatinib, which it aims to file for approval later this year against a mutated form of lung cancer.

Novartis is aiming to win approval for oral capmatinib as a first-line treatment for patients with metastatic MET exon14 skipping-mutated non-small cell lung cancer (NSCLC), a form of the disease for which there are no targeted therapies now, the Basel-based company said on Friday.

https://www.marketscreener.com/NOVARTIS-9364983/news/Novartis-wins-FDA-s-breakthrough-tag-for-lung-cancer-hopeful-29167013/?countview=0

Endo files U.S. application for product for cellulite treatment

Endo International plc (ENDP +9.7%) has submitted a marketing application to the FDA seeking approval to use collagenase clostridium histolyticum (CCH) to treat cellulite in the buttocks.

CCH, a combination of bacterial enzymes that break down collagen, is marketed in the U.S. by Endo’s pharmaceutical unit as XIAFLEX for the treatment of Dupuytren’s contracture and Peyronie’s disease.

https://seekingalpha.com/news/3497671-endo-files-u-s-application-cch-cellulite-shares-10-percent

AtriCure rebounds from bearish report-stoked selloff

Thinly traded AtriCure (ATRC +6.8%) is up on average volume, a modest 200K shares, as JPMorgan steps in to defend the stock after yesterday’s 10% selloff in apparent reaction to a bearish report from Culper Research.

Culper believes that there is 57% downside risk in the stock citing pressure on its open heart segment (65% of revenues) as procedures migrate to minimally invasive approaches to treat atrial fibrillation. It also questions the objectivity of a group of physicians that the company generously pays ($19.8M from 2013 – 2018) to promote their minimally invasive procedures directly to patients and an ongoing U.S. Justice Department investigation into its promotional activities (off-label use).

JPMorgan’s Robbie Marcus (Overweight/$40) counters that Culper’s information is neither new nor material and believes that the selloff represents an attractive buying opportunity.

https://seekingalpha.com/news/3497697-atricure-rebounds-bearish-report-stoked-selloff-7-percent

Lannett’s Posaconazole Deal May Avert Bankruptcy Concerns

LCI’s new distribution agreement for Sinotherapeutics’ Posaconazole 100mg tablets has the potential to generate $72 million in sales in the first year.

Despite being based in Shanghai, Sinotherapeutics’ manufacturing facilities have been routinely inspected by the FDA, with no Form 483(s) ever issued.

Combined with organic R&D growth, sales from LCI’s new distribution deal will more than offset the risk of Medicare reform.

A return to growth will allow the company to refinance, which will definitively steer the company away from bankruptcy.

Updated Company Thesis

Lannett Company’s (LCI) previous sell rating was issued on the basis of its debt and potential price fixing lawsuit settlements overwhelming the company’s assets. In addition, drug price erosion due to Medicare reform were projected to be en route to wiping out the company’s revenue CAGR from 2020 to 2022. The recent generic Noxafil deal with Sinotherapeutics, however, definitively tips the scale in favor of growth for LCI. Moreover, residual sales of Levothyroxine from a new distribution agreement commencing no later than 2022 certainly shines a light on the company’s cash flow situation. In all, the author is now confident in management’s guidance of 15% net revenue CAGR. Furthermore, growth from the company’s surprisingly profitable R&D program now places refinancing on the table. With bankruptcy now several leagues away from its pre-Q2 2019 earnings call, the stock’s distress discount should now dissipate to make way for a successful turnaround.

https://seekingalpha.com/article/4289581-lannetts-posaconazole-deal-highly-credible-partner-definitively-averts-bankruptcy-concerns