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. 

How Pa­tients with Epilep­sy Ben­e­fit from Re­al-World Da­ta

Amanda Shields, Principal Data Scientist, Scientific Data Steward

Keith Wenzel, Senior Business Operations Director

Andy Wilson, Scientific Lead

Real-world data (RWD) has the potential to transform the drug development industry’s efforts to predict and treat seizures for patients with epilepsy. Anticipating or controlling an impending seizure can significantly increase quality of life for patients with epilepsy. However, because RWD is secondary data originally collected for other purposes, the challenge is selecting, harmonizing, and analyzing the data from multiple sources in a way that helps support patients.

Jason Kelly, Ginkgo Bioworks CEO (Kyle Grillot/Bloomberg via Getty Images)

UP­DAT­ED: Gink­go Bioworks re­sizes the de­f­i­n­i­tion of go­ing big in biotech, rais­ing $2.5B in a record SPAC deal that weighs in with a whop­ping $15B-plus val­u­a­tion

Ginkgo Bioworks execs always thought big. But today should redefine just how big an upstart biotech player can dream.

In the largest SPAC deal to clear the hurdles to Nasdaq, the biotech that envisioned everything from remaking synthetic meat to a whole new approach to developing drugs has joined forces with one of the biggest disruptors in biotech to slam the Richter scale on dealmaking.

Soon after becoming the darling of the VC crew and clearing the bar on a $4 billion valuation, Ginkgo — a synthetic biotech player out to reprogram cells with industrial efficiency — has now struck a deal to go public in the latest leviathan SPAC that sets its pre-money valuation at $15 billion. In one swift vault, Ginkgo will combine with Harry Sloan’s Soaring Eagle Acquisition Corp. and leap into the public markets.

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FDA un­veils six ICH guide­lines ahead of meet­ing with Health Cana­da

A sign that the FDA’s non-Covid-related processes are beginning to normalize: The release of six guidelines from the International Council of Harmonisation.

Years in development, the ICH documents offer an international perspective on drug development, with these latest guidelines covering everything from recommendations to support the classification of drug substances, featured in the M9 guidance, to standards for nonclinical safety studies for pediatric medicines in the S11 guideline.

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Sanofi, Glax­o­SmithK­line, Boehringer ac­cused of play­ing games, de­stroy­ing emails re­lat­ed to law­suit over con­t­a­m­i­nat­ed Zan­tac

A recent court filing raises new questions about how major pharma companies like Sanofi, GlaxoSmithKline, and Boehringer Ingelheim have dealt with a lawsuit related to recalls of certain over-the-counter heartburn drugs due to the presence of a potentially cancer-causing substance found in them.

More than 70,000 people who took Sanofi’s Zantac and other heartburn drugs containing ranitidine, which have been recalled over the past two years, have sued the manufacturers, including generic drugmakers, and other retailers and distributors as part of a consolidated suit before US District Court Judge Robin Rosenberg in Florida.

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Al Sandrock, Biogen R&D chief (Biogen via YouTube)

UP­DAT­ED: Bio­gen push­es in a fresh stack of chips and starts prep­ping a glob­al R&D game plan af­ter watch­ing the cards turn on ear­ly throm­bolyt­ic da­ta

After patiently steering through a decade-long journey for its early-stage clinical work, a small Tokyo biotech has clinched a deal to out-license its lead thrombolytic agent to US heavyweight Biogen — which sees a potentially game-changing impact on the clot-busting field after taking a careful look at some upbeat Phase IIa data.

Three years after Biogen anted up $4 million to gain an option on the drug from TMS, the big US biotech is making a small bet to beef up its stroke portfolio. The BD team inked a deal to go ahead and grab rights to the drug for $18 million, with another $335 million in milestone cash on the table for a successful outcome.

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Chris Garabedian (Xontogeny)

Per­cep­tive Ad­vi­sors, Xon­toge­ny bring the band back and then some with a $515M sec­ond fund sniff­ing out lead com­pounds

When Perceptive Advisors and startup accelerator Xontogeny initially teamed up on an early-stage VC round in 2019, the partners hoped to prove their investments could be a force multiplier for early-stage companies. Now, with that proof of concept behind them, the pair have closed a second VC round worth more than double the money.

Dubbed PXV Fund II and headed by Xontogeny CEO and former Sarepta head Chris Garabedian, the $515 million fund will target 10 to 12 early-stage preclinical companies with Series A rounds in the $20 million to $40 million range with opportunities for Series B follow-ups. The oversubscribed fund is bringing the band back with initial investors from PXVI as well as new investors that include “top-tier” asset managers, endowments, foundations, family offices, and individual investors.

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A clos­er look at the FDA’s more than 700 pan­dem­ic-re­lat­ed record re­quests to re­place on­site in­spec­tions

As the pandemic constrained the FDA’s ability to travel for onsite manufacturing inspections, the agency increasingly turned to requesting records to fill the gap, even for hundreds of US-based facilities.

FDA explains in its guidance on manufacturing inspections during the pandemic that the agency can request records (not to be confused with the FDA’s remote interactive evaluations) directly from facilities “in advance of or in lieu of” certain onsite inspections. Companies are legally required to fulfill those requests because a denial may be considered limiting an inspection, which could lead to the FDA deeming a drug made at that site to be adulterated.

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Stephen Squinto, Gennao Bio CEO (Gennao)

Alex­ion co-founder Stephen Squin­to is back in the game as CEO, this time for a small gene ther­a­py play­er

With his name already behind a rare disease success story in Alexion, Stephen Squinto was looking for a great story to drive him to jump back into the biotech game. He found that in a fledging non-viral gene therapy company, and now he’s got a few backers on board as well.

On Tuesday, Gennao Bio launched with a $40 million Series A co-led by OrbiMed and Logos Capital with participation by Surveyor Capital. The biotech, which is looking to use its cell-penetrating antibody platform to deliver nucleic acid “payloads” during into the nucleus, had to rush for its initial series — and had a name change along the way.

Distribution of Moderna's Covid-19 Vaccine (Photo by Paul Sancya - Pool/Getty Images)

Opin­ion: Ado­les­cents can wait. The US needs to start do­nat­ing Covid-19 vac­cines to needy coun­tries now.

Now that the US is swimming in Covid-19 vaccines and the supply has officially eclipsed the demand, it’s time for America to lead the world and start shipping these excess doses to countries that desperately need them.

Unlike the IP waiver at the World Trade Organization, which Biden now supports and will likely take years to translate into actual shots in arms, the US could easily donate just a tiny fraction of the more than 60 million doses of Pfizer, Moderna and J&J vaccines sitting on American shelves right now.