As bluebird makes commercial progress in Europe, US application for Zynteglo suffers delay
After shocking Wall Street with a $1.8 million price tag for its gene therapy Zynteglo in Europe — bluebird bio on Tuesday revealed that it now expects to complete its US application to market the beta-thalassemia treatment in the United States only by the second half of the year, versus its previous estimate of the first half of 2020.
The one-shot therapy, also called LentiGlobin, is engineered to help patients with the rare inherited blood disorder — who need regular blood transfusions and have no matching donor for a stem cell transplant — become transfusion-independent.
As part of its fourth-quarter results, the Cambridge, Massachusetts-based company said the delay in completing its rolling BLA submission was related to “information regarding various release assays,” but did not go into further detail. This holdup could potentially defer approval to mid-2021.
The company’s shares $BLUE slipped about 2% to $86.45 in Wednesday premarket trading.
“In the US, we continue to model zero commercial patients in 2020 given what we anticipate will be a complicated negotiation process with payors. While the FDA regulatory timelines appear to be delayed somewhat, we’re leaving our 2021 numbers unchanged as we think they’re already conservative at $53mm (versus consensus of $70mm),” Stifel’s Benjamin Burnett wrote in a note.
When European regulators granted the therapy conditional approval in June, analysts were expecting a $900,000 price. But chief Nick Leschly unveiled a price twice that — $1.8 million, over five years — making Zynteglo the second most expensive therapy on the planet, just behind Novartis’ SMA therapy Zolgensma that carries an eye-popping price of $2.1 million.
Akin to Novartis, bluebird has set up as an installment plan, with the cost of Zynteglo unfolding over five years (€315,000 annually) as doctors evaluate whether it’s working. “If not, they stop. It’s not rocket science; it just makes sense,” Leschly said on a conference call.
The therapy is priced at a 15% discount to its clear “intrinsic” value of $2.1 million — delivering 22 quality-adjusted life years, or QALYs — for the most successful cases, he added.
In order for Zynteglo to work, stem cells are harvested from the patient’s body, and the patient is given chemotherapy to prime their bone marrow to receive the therapy. A viral vector is then used to implant a healthy copy of the beta-globin gene into the bone marrow, stimulating the production of red blood cells.
When it works, Zynteglo has been shown to keep patients transfusion-free for more than 4 years, the company said in an update at the American Society of Hematology. Earlier this year, the therapy was launched in Germany.
The therapy is also being tested for use in sickle cell disease. A late-stage trial is expected to initiate in the first half of 2020, while a second Phase III study focusing on pediatric patients is expected to begin enrolling sometime this year.
Social image: Nick Leschly, Endpoints JPM 20 Jeff Rumans