Nick Leschly via Getty

UP­DAT­ED: Blue­bird shares sink as an­a­lysts puz­zle out $1.8M stick­er shock and an un­ex­pect­ed de­lay

Blue­bird bio $BLUE has un­veiled its price for the new­ly ap­proved gene ther­a­py Zyn­te­glo (Lenti­Glo­bin), which came as a big sur­prise. And it wasn’t the on­ly un­ex­pect­ed twist in to­day’s sto­ry.

With some an­a­lysts bet­ting on a $900,000 price for the β-tha­lassemia treat­ment in Eu­rope, where reg­u­la­tors pro­vid­ed a con­di­tion­al ear­ly OK, blue­bird CEO Nick Leschly said Fri­day morn­ing that the pa­tients who are suc­cess­ful­ly treat­ed with their drug over 5 years will be charged twice that — $1.8 mil­lion — on the con­ti­nent. That makes this drug the sec­ond most ex­pen­sive ther­a­py on the plan­et, just be­hind No­var­tis’ new­ly ap­proved Zol­gens­ma at $2.1 mil­lion, with an­a­lysts still wait­ing to see what kind of pre­mi­um can be had in the US.

Like No­var­tis, blue­bird will be set­ting it up as an in­stall­ment plan, with the charges spread out over 5 years as physi­cians eval­u­ate whether it’s work­ing or not. The com­pa­ny will charge 315,000 eu­ros a year. If it works, the an­nu­al pay­ments will con­tin­ue, Leschly said in a call to­day, “if not, they stop. It’s not rock­et sci­ence; it just makes sense.”

These new, high­er, num­bers will spur an­a­lysts to sit down and crunch the num­bers again for this drug. SVB Leerink es­ti­mat­ed peak sales of $800 mil­lion for the first in­di­ca­tion, with sick­le cell dis­ease tak­ing that in­to block­buster ter­ri­to­ry. 

But in­vestors didn’t warm up to the pre­sen­ta­tion for the biotech, which has a mar­ket cap of $6.5 bil­lion. Blue­bird shares slid 4.5% in ear­ly trad­ing Fri­day. By ear­ly af­ter­noon the stock was more than 5% in the red.

Leschly says blue­bird has es­tab­lished a clear “in­trin­sic” val­ue of $2.1 mil­lion — de­liv­er­ing 22 QALYs, or qual­i­ty-ad­just­ed life years — for the most suc­cess­ful cas­es, not­ing that their price re­flects a 15% dis­count on that fig­ure. But the biotech al­so looked at pro­vid­ing a one-time treat­ment that could de­liv­er a life­time of val­ue — with­out ac­tu­al­ly prov­ing just how long these ther­a­pies can be ef­fec­tive. And they pro­pose be­ing ful­ly paid in 5 years, leav­ing pay­ers to con­sid­er what hap­pens if it fails past that point.

An­oth­er point: This is a com­pli­cat­ed pro­ce­dure, which adds costs on top of the treat­ment ex­pense.

Then, in the ear­ly af­ter­noon, Cowen an­a­lyst Yaron Wer­ber got in­to the act, not­ing his sur­prise that blue­bird is de­lay­ing the launch in or­der to make some last minute changes to the man­u­fac­tur­ing process, which adds an ex­tra el­e­ment of risk for the biotech.

(T)he key un­ex­pect­ed news is that EMA has re­quest­ed amend­ments to the fi­nal drug prod­ucts spec­i­fi­ca­tions and to the man­u­fac­tur­ing pa­ra­me­ters. Hence this de­lays the launch and would re­move any sales in FY19 to ear­ly ’20. The good news is that it would en­able blue to on­board the qual­i­fied treat­ment cen­ters and help fur­ther prep for the launch. How­ev­er, un­ques­tion­ably this re­quest adds an el­e­ment of sur­prise and would re­quire blue to make a few mn­fg process changes ahead of launch which would al­so add some new risk.

Leschly care­ful­ly de­tailed how the com­pa­ny came up with its price and pay­ment mod­el, not­ing that the sys­tem is geared to cov­er­ing the cost of care de­liv­ered over a longterm ba­sis, rather than a po­ten­tial one-time event.

In mak­ing the case for the drug, blue­bird’s CEO used a health eco­nom­ics case, eval­u­at­ing the gains in life ex­pectan­cy and the qual­i­ty of life mea­sures. Leschly al­so specif­i­cal­ly ex­clud­ed the sav­ings from the ther­a­py Zyn­te­glo re­places.

“In prin­ci­ple, I ac­tu­al­ly think this is progress,” says Pe­ter Bach from the Memo­r­i­al Sloan Ket­ter­ing Can­cer Cen­ter, “I ac­tu­al­ly think it’s a good trend.”

But…

If they re­al­ly want to fol­low through with a rig­or­ous health eco­nom­ics case, says Bach, they should pub­lish their num­bers so pay­ers could take a care­ful look at how they ac­tu­al­ly stack up. Al­so, if they want­ed to be con­sis­tent, he adds, the com­pa­ny could start with a price that made sense based on the da­ta at hand, and then ad­just it as they find out more about how it works on a longterm ba­sis.

“In the old days you could come to mar­ket when you proved drugs work with dura­bil­i­ty. Now they come with un­sure dura­bil­i­ty, but they still want to charge at the up­per end.” And they’re get­ting the full pay­ment for a life­time ben­e­fit in the first 5 years, shift­ing the risk on­to pa­tients and pay­ers.

When it works, blue­bird bio’s gene ther­a­py for β-tha­lassemia has been shown to keep pa­tients trans­fu­sion free for up to 3.8 years, ac­cord­ing to an up­date to­day at the big EHA meet­ing. But even some Wall Street an­a­lysts are hav­ing trou­ble with the price, as well as the mar­ket ex­pec­ta­tions. Piper Jaf­fray’s Tyler Van Bu­ren:

(B)ased on con­sen­sus es­ti­mates, the Street is mod­el­ing that blue­bird trans­plants thou­sands of pa­tients with Zyn­te­glo/Lenti­Glo­bin. Put sim­ply, this is a dis­con­nect that is im­pos­si­ble for us to rec­on­cile. We al­so be­lieve that the $1.8MM price tag of Zyn­te­glo is hard to jus­ti­fy giv­en the $2.1MM comp of Zol­gens­ma, which treats chil­dren with a cer­tain out­come of death, as op­posed to a pop­u­la­tion where the ma­jor­i­ty of pa­tients are ad­e­quate­ly main­tained on trans­fu­sions.

And this is from SVB Leerink’s Mani Foroohar:

Like any cell ther­a­py, ‘process is the prod­uct’ for Zyn­te­glo, and whether the ul­ti­mate com­mer­cial prod­uct will live up to the clin­i­cal da­ta seen to date is un­clear due to nec­es­sary man­u­fac­tur­ing changes — in­creas­ing the risk to the 80% of rev­enue/pa­tient at-risk un­der a 5-yr val­ue based con­tract. More con­cern­ing is that BLUE was un­able to ex­e­cute on the man­u­fac­tur­ing process de­vel­op­ment that is the crit­i­cal core com­pe­ten­cy of any cell ther­a­py fran­chise, per­haps rais­ing ques­tions on the com­pa­ny’s abil­i­ty to hit stat­ed time­lines for many of its pro­grams.

The dev­il, as al­ways, is in the da­ta.

Here’s the lat­est from blue­bird $BLUE: While 8 of 10 pa­tients with a less se­vere form of the dis­ease re­main trans­fu­sion-free in the Phase I/II study used for the reg­u­la­to­ry sub­mis­sions, it’s not a sure thing. And in an­oth­er group of 8 pa­tients with a β0/β0 geno­type, on­ly 3 were trans­fu­sion in­de­pen­dent.

Those re­sults now ex­tend over to the Phase III tri­al, where 4 of 5 pa­tients with­out the β0/β0 geno­type are trans­fu­sion-free. One evalu­able pa­tient with the more se­vere form of the dis­ease achieved in­de­pen­dence from trans­fu­sions, and 5 pa­tients had stopped trans­fu­sions for at least three months.

That 3.8 years of trans­fu­sion in­de­pen­dence is crit­i­cal for blue­bird.

These dis­cus­sions by the pi­o­neers in the field will prove tremen­dous­ly in­flu­en­tial for the rest of the field, lock­ing in price ranges and pay­ment plans that — if they work — may well dic­tate the num­bers for every­one else. 

Ted Love. HAVERFORD COLLEGE

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Global Blood Therapeutics is set to submit an application for accelerated approval in the second-half of this year, after unveiling fresh data from a late-stage trial that showed just over half the patients given the highest dose of its experimental sickle cell disease drug experienced a statistically significant improvement in oxygen-wielding hemoglobin, meeting the study's main goal.

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Gene ther­a­pies seize the top of the list of the most ex­pen­sive drugs on the plan­et — and that trend has just be­gun

Anyone looking for a few simple reasons why the gene therapy field has caught fire with the pharma giants need only look at the new list of the 10 most expensive therapies from GoodRx.

Two recently approved gene therapies sit atop this list, with Novartis’ Zolgensma crowned the king of the priciest drugs at $2.1 million. Right below is Luxturna, the $850,000 pioneer from Spark, which Roche is pushing hard to acquire as it adds a gene therapy group to the global mix.

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News­mak­ers at #EHA19: Re­gen­eron, Ar­Qule track progress on re­sponse rates

Re­gen­eron’s close­ly-watched bis­pe­cif­ic con­tin­ues to ring up high re­sponse rates

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A to­tal of 13 out of 14 fol­lic­u­lar lym­phomas re­spond­ed to the drug, a 93% ORR, down from 100% at the last read­out. In 10 out of 14, there was a com­plete re­sponse. In dif­fuse large B-cell lym­phoma the re­sponse rate was 57% among pa­tients treat­ed at the 80 mg to 160 mg dose range. They were all com­plete re­spons­es. And 2 of these Cars were for pa­tients who had failed CAR-T ther­a­py.

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Savara shares are crushed as PhI­II tri­al flunks pri­ma­ry, key sec­on­daries — but they can’t stop be­liev­ing

In­vestors are in no mood to hear biotechs tout the suc­cess of a “key” sec­ondary end­point when the piv­otal Phase III flunks the pri­ma­ry goal. Just ask Savara. 

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'We kept at it': Jef­frey Blue­stone plots late-stage come­back af­ter teplizum­ab shown to de­lay type 1 di­a­betes

Late-stage da­ta pre­sent­ed at the Amer­i­can Di­a­betes As­so­ci­a­tion an­nu­al meet­ing in 2010 pushed Eli Lil­ly to put a crimp on teplizum­ab as the phar­ma gi­ant found it un­able to re­set the clock on new­ly di­ag­nosed type 1 di­a­betes. At the same con­fer­ence but in dif­fer­ent hands nine years lat­er, the drug is mak­ing a crit­i­cal come­back by scor­ing suc­cess in an­oth­er niche: de­lay­ing the on­set of the dis­ease.

In a Phase II tri­al with 76 high-risk in­di­vid­u­als — rel­a­tives of pa­tients with type 1 di­a­betes who have di­a­betes-re­lat­ed au­toan­ti­bod­ies in their bod­ies — teplizum­ab al­most dou­bled the me­di­an time of di­ag­no­sis com­pared to place­bo (48.4 months ver­sus 24.4 months). The haz­ard ra­tio for di­ag­no­sis was 0.41 (p=0.006).

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One of the biggest investors to burst onto the biotech scene in recent years has re-upped with more than a billion dollars flowing into its second fund. And this next wave of bets will likely include more of the Big Pharma spinouts that highlighted their first 3 years in action.

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Neil Woodford, Woodford Investment Management via YouTube

Un­der siege, in­vest­ment man­ag­er Wood­ford faces an­oth­er in­vest­ment shock

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Har­g­reaves Lans­down, which has in the past sold and pro­mot­ed the Wood­ford funds via its re­tail in­vest­ment plat­form, has re­port­ed­ly with­drawn £45 mil­lion — its en­tire po­si­tion — from the in­vest­ment man­ag­er’s In­come Fo­cus Fund.