Es­ti­mat­ing a US price tag of $5K per course, remde­sivir is set to make bil­lions for Gilead, says key an­a­lyst

Da­ta on remde­sivir — the first drug shown to ben­e­fit Covid-19 pa­tients in a ran­dom­ized, con­trolled tri­al set­ting — may be murky, but its mak­er Gilead could reap bil­lions from the sales of the failed Ebo­la ther­a­py, ac­cord­ing to an es­ti­mate by a promi­nent Wall Street an­a­lyst. How­ev­er, the fore­cast, which is based on a $5,000-per-course US price tag, trig­gered the ire of one top drug price ex­pert.

Ge­of­frey Porges

Gilead has been ret­i­cent about its pric­ing plans, with com­pa­ny chief Dan O’Day em­pha­siz­ing the need for the com­pa­ny to be re­spon­si­ble. “I don’t think there is a prece­dent for this,” he said in re­sponse to the ques­tion posed by SVB Leerink an­a­lyst Ge­of­frey Porges in a post-earn­ings con­fer­ence call last month. “There is no rule book out there, oth­er than that we need to be very thought­ful about how we can make sure we pro­vide ac­cess to our med­i­cine to pa­tients around the globe and do that in a sus­tain­able way for the com­pa­ny.”

But on Wednes­day, Porges said he ex­pect­ed the drug to car­ry a list price of $5000 per course in the Unit­ed States, above the cost-ef­fec­tive es­ti­mate of $4,500 gen­er­at­ed by ICER, an in­creas­ing­ly in­flu­en­tial watch­dog that typ­i­cal­ly fa­vors a con­ser­v­a­tive ap­proach to pric­ing based on an in­ter­ven­tion’s ben­e­fit be­yond the stan­dard-of-care.

Al­though Remde­sivir is the on­ly ther­a­py so far to show a sta­tis­ti­cal­ly sig­nif­i­cant im­pact in help­ing hos­pi­tal­ized Covid-19 pa­tients with mod­er­ate-to-se­vere dis­ease re­cov­er faster (by four days) in a ran­dom­ized, place­bo-con­trolled study — the gold-stan­dard for ben­e­fit-risk cal­cu­la­tions — it is by no means a sil­ver bul­let. The drug, which thwarts an en­zyme the virus re­lies on to repli­cate, did not re­duce the rate of mor­tal­i­ty by a sta­tis­ti­cal­ly sig­nif­i­cant ex­tent in the tri­al.

ICER broke its usu­al prac­tices in ear­ly May to con­duct its own analy­sis based on ‘raw and im­ma­ture da­ta’ to come up with two dif­fer­ent ways to rea­son­ably price for the drug. The first, the ‘cost re­cov­ery’ mod­el in which the man­u­fac­tur­er prices the ther­a­py on the ba­sis of the min­i­mum costs of pro­duc­tion, chalked up a price of $10 for a 10-day course. (Al­though da­ta from a Gilead tri­al sug­gest a 5-day reg­i­men of the drug is as ef­fec­tive as the 10-day course).

But un­der the tra­di­tion­al cost-ef­fec­tive­ness mod­el, which looks at in­cre­men­tal health ben­e­fits and costs with­in the health sys­tem, the com­pa­ny would be jus­ti­fied to sell the same reg­i­men for $4,500, ICER sug­gest­ed in a draft re­port.

Michael Car­rie Rut­gers Uni­ver­si­ty

Michael Car­ri­er, a Rut­gers Uni­ver­si­ty law school pro­fes­sor who spe­cial­izes in in­tel­lec­tu­al prop­er­ty, in a pre­vi­ous in­ter­view with End­points News not­ed that there isn’t any sim­ple for­mu­la to cal­cu­late the ide­al price of a ther­a­py. “Just psy­cho­log­i­cal­ly, a cost or price be­low $1,000 seems to be more af­ford­able. I don’t think it’s go­ing to be $10. I don’t think it’ll be close to $4500.”

“Wall Street ex­pect­ing $GILD to ex­tract max­i­mum rev­enue ex­ceed­ing treat­ment val­ue.  No one should be sur­prised by this,” said Pe­ter Bach, the di­rec­tor of Memo­r­i­al Sloan Ket­ter­ing’s Cen­ter for health pol­i­cy and out­comes, in re­sponse to Porges’ es­ti­mate of $5,000-per-course on Twit­ter.

Gilead rose to promi­nence by vault­ing HIV to the ranks of a chron­ic dis­ease and as the pur­vey­or of im­pos­si­bly high-priced, but fan­tas­ti­cal­ly ef­fec­tive, he­pati­tis C drugs. Orig­i­nal­ly priced at $1000 per hep C pill, the US drug­mak­er drew the wrath of law­mak­ers and pol­i­cy­mak­ers at home and abroad, and as a re­sult of in­tense scruti­ny and emerg­ing com­pe­ti­tion, prices were re­vised down­wards.

Porges, on Wednes­day, es­ti­mat­ed the drug will be priced at $4000 per course in Eu­rope and $2000 for the same reg­i­men in oth­er mar­kets. Over­all, the fore­cast glob­al remde­sivir sales is $1.9 bil­lion by the end of this year, jump­ing to $6.7 bil­lion in 2021 (bol­stered by gov­ern­ment stock­pil­ing) and then in a range of $5.8 to $6.9 bil­lion in lat­er years.

Pe­ter Bach

“This fore­cast has more un­cer­tain­ty than any that we have pub­lished in the last 15 years, but it re­flects our view that remde­sivir works, it saves med­ical and so­ci­etal costs by short­en­ing dis­ease du­ra­tion and re­duc­ing sever­i­ty, and we be­lieve that Gilead will be per­mit­ted to cap­ture re­duced but still re­al prof­itabil­i­ty from the prod­uct,” he wrote. “We al­so be­lieve that SARS-nCoV2 (the virus be­hind Covid-19) is not go­ing away, or be­ing elim­i­nat­ed by vac­ci­na­tion (we do fore­cast grad­ual adop­tion of vac­ci­na­tion, but in our view that is un­like­ly to stop gov­ern­ment stock­pil­ing of remde­sivir).”

Len Yaffe, a for­mer sell-side med­ical an­a­lyst who now works with a health­care hedge fund called Stoc*Doc Part­ners, said he does not see the US da­ta on hos­pi­tal­ized/in ICU/on ven­ti­la­tor pa­tients sup­port Porges’ rev­enue pro­jec­tions.

“I ex­pect the num­ber of dai­ly new cas­es to drop sig­nif­i­cant­ly by Sep­tem­ber from the cur­rent run rate of 20,000 to un­der 10,000 — by the late fall, there should be drugs ef­fec­tive in ear­li­er treat­ment that would min­i­mize the mod­er­ate to se­vere­ly ill pa­tient group,” he told End­points. “So, if I am wrong, and there is a sig­nif­i­cant sec­ond wave ( I ex­pect a mi­nor one) this win­ter, then he (Porges) could be cor­rect…but I think he needs to base his case on the pos­si­ble in­tro­duc­tion of oth­er phar­ma­ceu­ti­cals, a new case pro­jec­tion (not just that the virus is “not go­ing away”), and not on grad­ual adop­tion of vac­ci­na­tion.”

Porges’ fore­cast is cer­tain­ly gen­er­ous, but the da­ta on the drug are less than stel­lar. On­ly days ago, Gilead un­veiled da­ta from an open-la­bel late-stage study that gen­er­at­ed more ques­tions than an­swers on the mag­ni­tude of remde­sivir’s ben­e­fit in the treat­ment of Covid-19. In this tri­al, pa­tients clas­si­fied as hav­ing mod­er­ate dis­ease were 65% more like­ly to show “clin­i­cal im­prove­ment” on a five-day reg­i­men com­pared to those giv­en stan­dard-of-care — but not those on the 10-day course.

The di­choto­my per­plexed Baird an­a­lyst Bri­an Sko­r­ney. The da­ta “con­tin­ue to in­di­cate a very mar­gin­al clin­i­cal ben­e­fit, while re­in­forc­ing that a ben­e­fit is like­ly more than ran­dom noise,” he wrote in a note. “We con­tin­ue to be­lieve that both the com­mer­cial op­por­tu­ni­ty for Gilead and the macro ben­e­fit of remde­sivir to so­ci­ety, at large, is very lim­it­ed.”

Gilead, mean­while, has al­ready do­nat­ed 200,000 course sup­ply of remde­sivir to gov­ern­ments, in­vest­ed $50 mil­lion in de­vel­op­ing the drug, and ex­pects to spend an­oth­er $1 bil­lion as it ramps up fur­ther de­vel­op­ment and man­u­fac­tur­ing of remde­sivir. The com­pa­ny plans to dis­close its pric­ing plans in the com­ing weeks and kick off com­mer­cial sales in the sec­ond half of this year.

Stock­pil­ing could be­gin in late 2021, af­ter drug pro­duc­tion has been amped up, Porges said. “We as­sume that peak prof­itabil­i­ty (op­er­at­ing mar­gin) for remde­sivir is 19% in 2021, and then de­clines as more and more rev­enue comes from heav­i­ly dis­count­ed (80%+) gov­ern­ment stock­pil­ing pur­chas­es. As a re­sult of the much low­er prof­itabil­i­ty com­pared to Gilead’s core busi­ness, the in­cre­men­tal prof­it con­tri­bu­tion is rel­a­tive­ly small (+2% in 2020, +10% in 2021 and then +1-4% in lat­er years).”

In the Unit­ed States, days af­ter topline da­ta on the drug were an­nounced by the NIH, the FDA is­sued a quick emer­gency use au­tho­riza­tion (a tem­po­rary move to al­low ac­cess to the drug while its mak­er gath­ers more da­ta in or­der to pur­sue stan­dard ap­proval). In the Eu­ro­pean Union, the med­i­cines reg­u­la­tor has rec­om­mend­ed ex­pand­ing com­pas­sion­ate use of remde­sivir in se­vere Covid-19 pa­tients, while a rolling re­view of the drug is on­go­ing. In the UK, the Gilead has struck a deal with the gov­ern­ment to sup­ply the drug for cer­tain Covid-19 pa­tients.

So­cial im­age: Daniel O’Day, AP Im­ages

Qual­i­ty Con­trol in Cell and Gene Ther­a­py – What’s Re­al­ly at Stake?

In early 2021, Bluebird Bio was forced to suspend clinical trials of its gene therapy for sickle cell disease after two patients in the trial developed cancer. As company scientists rushed to assess whether there was any causal link between the therapy and the cancer cases, Bluebird’s stock value plummeted – as did those of multiple other biopharma companies developing similar therapies.

While investigations concluded that the gene therapy was unlikely to have caused cancer, investors and the public may be more skittish regarding the safety of gene and cell therapies after this episode. This recent example highlights how delicate the fields of cell and gene therapy remain today, even as they show great promise.

Law pro­fes­sors call for FDA to dis­close all safe­ty and ef­fi­ca­cy da­ta for drugs

Back in early 2018 when Scott Gottlieb led the FDA, there was a moment when the agency seemed poised to release redacted complete response letters and other previously undisclosed data. But that initiative never gained steam.

Now, a growing chorus of researchers are finding that a dearth of public data on clinical trials and pharmaceuticals means industry and the FDA cannot be held accountable, two law professors from Yale and New York University write in an article published Wednesday in the California Law Review.

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Novavax CEO Stanley Erck at the White House in 2020 (Andrew Harnik, AP Images)

As fears mount over J&J and As­traZeneca, No­vavax en­ters a shaky spot­light

As concerns rise around the J&J and AstraZeneca vaccines, global attention is increasingly turning to the little, 33-year-old, productless, bankruptcy-flirting biotech that could: Novavax.

In the now 16-month race to develop and deploy Covid-19 vaccines, Novavax has at times seemed like the pandemic’s most unsuspecting frontrunner and at times like an overhyped also-ran. Although they started the pandemic with only enough cash to last 6 months, they leveraged old connections and believers into $2 billion and emerged last summer with data experts said surpassed Pfizer and Moderna. They unveiled plans to quickly scale to 2 billion doses. Then they couldn’t even make enough material to run their US trial and watched four other companies beat them to the finish line.

FDA of­fers scathing re­view of Emer­gent plan­t's san­i­tary con­di­tions, em­ploy­ee train­ing af­ter halt­ing pro­duc­tion

The FDA wrapped up its inspection of Emergent’s troubled vaccine manufacturing plant in Baltimore on Tuesday, after halting production there on Monday. By Wednesday morning, the agency already released a series of scathing observations on the cross contamination, sanitary issues and lack of staff training that caused the contract manufacturer to dispose of millions of AstraZeneca and J&J vaccine doses.

Brad Bolzon (Versant)

Ver­sant pulls the wraps off of near­ly $1B in 3 new funds out to build the next fleet of biotech star­tups. And this new gen­er­a­tion is built for speed

Brad Bolzon has an apology to offer by way of introducing a set of 3 new funds that together pack a $950 million wallop in new biotech creation and growth.

“I want to apologize,” says the Versant chairman and managing partner, laughing a little in the intro, “that we don’t have anything fancy or flashy to tell you about our new fund. Same team, around the same amount of capital, same investment strategy. If it ain’t broke, don’t fix it.”

But then there’s the flip side, where everything has changed. Or at least speeded into a relative blur. Here’s Bolzon:

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Emma Walmsley, GlaxoSmithKline CEO (Kevin Dietsch/Pool via CNP/Alamy)

Glax­o­SmithK­line hus­tles the 7th PD-1 past the fin­ish line with Jem­per­li. But how big will up­take be?

Everything came up sevens for GlaxoSmithKline on Thursday as the pharma notched the seventh PD-1 approval seven years after the first such drugs were OK’ed in Keytruda and Opdivo. But will it bring GSK good fortune?

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Bio­phar­ma ramps up lob­by­ing spend as drug pric­ing leg­is­la­tion nears

The top biopharma companies in the world collectively spent more than $40 million in just the first quarter of 2021 on lobbying Congress as part of preparations to stave off major drug pricing legislation that’s expected later this year.

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House Committee on Oversight and Reform Chairwoman Carolyn Maloney (Getty Images)

House De­moc­rats call on Emer­gent ex­ecs to tes­ti­fy on qual­i­ty is­sues next month

The House Oversight Committee is investigating Covid-19 vaccine producer Emergent BioSolutions, which secured a $628 million US government contract to make AstraZeneca and J&J vaccines despite “a long, documented history” of quality control issues, Democrats said in a letter to the contract manufacturer’s executives.

Emergent’s Baltimore plant, which was shuttered on Monday by FDA, has been embroiled in controversy after being forced to destroy millions of AstraZeneca and J&J doses due to an ingredient mix-up and possible contamination.

JP Gabriel, Ocugen

JP Gabriel watched from the bleach­ers as the pan­dem­ic raged. Now head of sup­ply chain at Ocu­gen, he's ready to bat

The world was in the middle of the most pressing public health risk his generation had ever seen, and JP Gabriel felt like he was sitting on the sidelines. As a VP of biologics and mRNA manufacturing at Ultragenyx, Gabriel watched from the sidelines as players like Pfizer/BioNTech and Moderna used mRNA tech to chase their own Covid-19 vaccines.

This month, Gabriel got the chance to get his hands dirty against the pandemic — but it won’t be with mRNA.

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