Gene Therapy, Pharma

Is biopharma’s first $1.5M therapy now in Phase III?

Keying off of Spark Therapeutics’ rollout of Luxturna as the first approved gene therapy in the US, the analysts at Leerink have been crunching the numbers on what the first hemophilia gene therapies could fetch. And by raising their estimate to $1.5 million, they may well be tempting fate at a time the debate over drug pricing is reaching the boiling point in the US.

Spark satisfied most analysts with its $425,000 price per eye for Luxturna. And Leerink says that the positive response by Harvard Pilgrim to a 30-month durability starting point for a gene therapy pricing agreement set the stage for many of the rest of the field to follow suit. And that will justify a $1.5 million-plus price for a therapy that could replace current standards in hemophilia with a similar track record on durability.

After checking with some KOLs in the field, Leerink offered:

As a result of this work, we are raising our assumed price for hemophilia gene therapies in our coverage universe to $1.5M per patient in the US ($1M in the EU), an increase from prior assumptions of $350,000-$500,000 (hemophilia A) and $500,000 (hemophilia B) per patient. Our checks indicate that there may be some headroom above this price, potentially up to $2M per patient on a gross basis, but given the uncertainty about responsiveness, rebates and other factors, we believe $1.5M is a justifiable estimate for net price per patient at this juncture….

We believe the manufacturers are testing the waters currently as they embark on Phase 3 trials in order to determine where payors push back significantly. Based on our checks, a price somewhere in the range of $1-2M per patient seems most likely.

The big reason for that 7-figure price tag is based on payers’ willingness to cover the $580,000 to $800,000 price per patient for factor replacement therapy, giving them some upside even with a $1 million-plus sticker for a once-and-done gene therapy. And that could have a profound effect on Spark $ONCE, BioMarin $BMRN and uniQure $QURE, which are all engaged in development efforts.

As long as the average patient can rely on factor replacement therapy, Leerink adds, the low hanging fruit for the developers early on will be among the most severe patients, and sticking with that small patient population also helps justify the big number.

At this stage of the game, the biotechs leading this field will likely hedge their bets, steering clear of offering any numbers they may have in mind as they test the waters on the final price tag. But Leerink just gave them a big opportunity to continue their private payer talks with some big numbers in mind.

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