Nick Leschly via Getty

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. 

At the In­flec­tion Point for the Next Gen­er­a­tion of Can­cer Im­munother­a­py

While oncology researchers have long pursued the potential of cellular immunotherapies for the treatment of cancer, it was unclear whether these therapies would ever reach patients due to the complexity of manufacturing and costs of development. Fortunately, the recent successful development and regulatory approval of chimeric antigen receptor-engineered T (CAR-T) cells have demonstrated the significant benefit of these therapies to patients.

All about Omi­cron; We need more Covid an­tivi­rals; GSK snags Pfiz­er’s vac­cine ex­ec; Janet Wood­cock’s fu­ture at FDA; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

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Merck's new antiviral molnupiravir (Quality Stock Arts / Shutterstock)

As Omi­cron spread looms, oral an­tivi­rals ap­pear to be one of the best de­fens­es — now we just need more

After South African scientists reported a new Covid-19 variant — dubbed Omicron by the WHO — scientists became concerned about how effective vaccines and monoclonal antibodies might be against it, which has more than 30 mutations in the spike protein.

“I think it is super worrisome,” Dartmouth professor and Adagio co-founder and CEO Tillman Gerngross told Endpoints News this weekend. Moderna CEO Stéphane Bancel echoed similar concerns, telling the Financial Times that experts warned him, “This is not going to be good.”

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Pfiz­er, Am­gen and Janssen seek fur­ther clar­i­ty on FDA's new ben­e­fit-risk guid­ance

Three top biopharma companies are seeking more details from the FDA on how the agency conducts its benefit-risk assessments for new drugs and biologics.

While Pfizer, Amgen and Janssen praised the agency for further spelling out its thinking on the subject in a new draft guidance, including a discussion of patient experience data as part of the assessment, the companies said the FDA could’ve included more specifics in the 20-page draft document.

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Lisa Deschamps, AviadoBio CEO

Ex-No­var­tis busi­ness head hops over to a gene ther­a­py start­up — and she's reeled in $80M for a dash to the clin­ic

Neurologist and King’s College London professor Christopher Shaw has been researching neurodegenerative diseases like ALS and collaborating with drugmakers for the last 25 years in the hopes of pushing new therapies forward. But unfortunately, none of those efforts have come anywhere close to fruition.

“So, you know, after 20 years in the game, I said, ‘Let’s try and do it ourselves,’” he told Endpoints News. 

Vas Narasimhan, Novartis CEO (Thibault Camus/Pool via AP Images)

With gener­ic com­pe­ti­tion heat­ing up, Vas Narasimhan out­lines No­var­tis' growth plans at R&D day

Thursday marks Novartis’ annual R&D day, and with it comes CEO Vas Narasimhan’s attempt to spotlight the company’s pipeline strategy and emerging stars.

The biggest question entering Thursday’s presentation dealt with how the big biopharma will make up revenues from upcoming generic competition — Novartis says within the next five years, generics will eat away roughly $9 billion in sales. To offset this, Narasimhan outlined a strategy for 4% growth or higher until 2026, focusing on six key medicines he believes will see multibillion dollar profits during this time.

In­cor­po­rat­ing Ex­ter­nal Da­ta in­to Clin­i­cal Tri­als: Com­par­ing Dig­i­tal Twins to Ex­ter­nal Con­trol Arms

Most drug development professionals are familiar with the nerve-racking wait for the read-out of a large trial. If it’s negative, is the investigational therapy ineffective? Or could the failure result from an unforeseen flaw in the design or execution of the protocol, rather than a lack of efficacy? The team could spend weeks analyzing data, but a definitive answer may be elusive due to insufficient power for such analyses in the already completed trial. These problems are only made worse if the trial had lower enrollment, or higher dropout than expected due to an unanticipated event like COVID-19. And if a trial is negative, the next one is likely to be larger and more costly — if it happens at all.

Reshma Kewalramani, Vertex CEO (Vertex via YouTube)

Bat­tling a line­up of skep­tics, Ver­tex claims an­oth­er ear­ly clin­i­cal win — this time in kid­ney dis­ease

Vertex claimed its second early-stage win of the fall Wednesday, announcing positive results in a small study on a genetically defined form of kidney disease.

The 16-patient, Phase II trial focused on patients with focal segmental glomerulosclerosis, a rare disease where kidneys are unable to filter blood properly. Over 13 weeks on an experimental pill, the level of protein in the patients’ urine fell by an average of 47.6%.

Ab­b­Vie tacks on a new warn­ing to Rin­voq la­bel as safe­ty frets crimp JAK class

The safety problems that continue to plague the JAK class as new data highlight some severe side effects are casting a large shadow over AbbVie’s Rinvoq.

As a result of a recent readout highlighting major adverse cardiac events (MACE), malignancy, mortality and thrombosis with Xeljanz a couple of months ago, AbbVie put out a notice late Friday afternoon that it is adding the new class risks to its label for their rival drug.

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