Friday Five - The pharma week in review (25 Apr 2019)

All eyes on Novartis' Zolgensma…

On Wednesday, Novartis' first-quarter earnings call was dominated by questions about the gene therapy Zolgensma, which is on the cusp of US approval as a potential 'one time' treatment for spinal muscular atrophy (SMA).

Management played down safety concerns (one patient recently treated with Zolgensma died) and talked up new data due to be presented at the American Association of Neurology (AAN) annual meeting early next month.

The price of Zolgensma at launch and the readiness of payers to absorb its cost upfront are the key unanswered questions; management has only suggested Zolgensma could have a list price between $1.5 million and $5 million. Additional clarity is not expected until the FDA pulls the regulatory trigger, with approval expected next month.

Analysis - ViewPoints: Novartis' blockbuster conveyor belt approaches a key inflection point


…and its impact on Biogen's Spinraza

Biogen simultaneously announced its first-quarter earnings on Wednesday, showcasing the commercial opportunity that the SMA market holds.

It markets the only approved treatment for SMA in Spinraza, with the brand now firmly positioned as Biogen's leading sales growth driver; revenues stood at $518 million for Q1.

Analysis - ViewPoints: Key takeaways from Biogen's Q1 earnings and investor call

Alas, for investors, there is little beyond Spinraza to get too excited about at this point in time, the paucity of Biogen's late-stage pipeline laid bare by the recent failure of aducanumab in two pivotal-stage studies.     

What the company does next could depend largely on the impact of Zolgensma on Spinraza sales.

Biogen suggested this week it has the financial firepower to acquire new assets and platforms if necessary, but also reiterated confidence in its early- to mid-stage pipeline, which is largely focused on neuroscience therapies; Biogen's experience in developing Spinraza could prove to be a blueprint for future successes in this field, said CEO Michel Vounatsos.


Lessons from CAR-T

If Zolgensma represents an important inflection point for Novartis' aspirations to spearhead pharma's drive for innovation, the focus now sharpened on approval and subsequent launch of this product look poised to be a watershed moment for the gene and cell therapy field at large; one accentuated by the $8.7 billion Novartis spent to acquire Zolgensma's developer AveXis last year.

The challenges associated with commercialising 'one-time' CAR-T therapies in oncology could prove illustrative that gene therapies will take time to meet their commercial potential. A fact that Novartis knows too well; its CAR-T product Kymriah - approved in 2017 - delivered modest sales of $45 million during the first quarter of 2019.

Positive changes in the marketplace are occurring, albeit slowly, reflected by confirmation this week that the US Centers for Medicare and Medicaid Services (CMS) issued a proposal that would see an increase in payments for CAR-T cell therapies.

CMS administrator Seema Verma said the agency is acting due to concerns that its current CAR-T payment structure could be "inadequate and might be impacting access to care." She conceded, however, that "technology is moving faster than government policies," in reference to this process potentially taking up to three years to implement.


Skyrizi reaches the market

AbbVie reported its first-quarter results on Thursday, once again illustrating its dependency on revenues generated by Humira; sales of the anti-TNF were down 5.6 percent year-on-year, but nevertheless stood at $4.5 billion for the quarter, equal to 56 percent of AbbVie's total revenue.

With biosimilar erosion already occurring in Europe and biosimilars expected to enter the US market by 2023, emphasis is on the launch of new products. A timely boost was provided this week with the approval of Skyrizi for moderate-to-severe plaque psoriasis.

To what extent new drugs can compensate for declining Humira sales is unclear at this point. Where Skyrizi is concerned, AbbVie will be looking to shift psoriasis patients from Humira to the new brand, while simultaneously competing with a handful of 'next-generation' biologic therapies, which have demonstrated superiority over older anti-TNFs. Analysts at Wolfe Research also point out "that for every psoriasis patient that chooses Skyrizi versus Humira, AbbVie makes less money because of royalties it pays to Boehringer Ingelheim on Skyrizi."

See - ViewPoints: The end of an era - AbbVie begins planning for life after Humira

On Thursday, AbbVie management described Skyrizi as a "best in category" product. A day earlier management at Novartis - in response to questioning about the competitive impact that Skyrizi may pose to Cosentyx - suggested it does not feel overly threatened by another biologic entering the market. In reference to Cosentyx's broader spectrum of activity - including approvals in psoriatic arthritis and ankylosing spondylitis - they added that "more than skin needs to be treated."


On our radar…ASGCT

With gene therapy heavily in the spotlight, FirstWord will be at the annual meeting of the American Society of Gene and Cell Therapy (ASGCT) next week (April 29 - May 2).

Read our preview here.

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