Novartis gets the green light to start marketing its next prospective blockbuster. And they're charging a premium for convenience
A last-minute holdup at the FDA has been cleared up as regulators stamped their approval on Novartis’ new multiple sclerosis drug ofatumumab.
The FDA had delayed the decision a couple of months ago — largely eliminating the advantage that Novartis had paid for with a priority review voucher — raising some questions about what kind of last-minute hiccups may have been involved. But the pharma giant has avoided the fate of Gilead and BioMarin, announcing the approval on Thursday and sounding the opening shot on what will be a blockbuster chase for $1 billion-plus in annual sales.
Novartis $NVS got this drug from GlaxoSmithKline in their big vaccines-for-cancer therapies swap some years back. But Novartis never had much success selling it as a leukemia therapy.
They’ve whetted analysts’ appetites, though, with a B-cell blaster that can be administered at home, cutting ahead of the line of the rivals in the market that require a trip to an infusion center. And they’re charging for the convenience.
A spokesperson for Novartis tells me that the wholesale price of the drug — to be marketed as Kesimpta — is $83,000, more in line with Rebif ($86,000) than Roche’s hot rival Ocrevus, which hit the market at a discounted price of $65,000. The price of infusion, Novartis notes, drives up the overall cost of drugs like Ocrevus.
Cowen’s Steve Scala picked up on the pricing argument in a note out Thursday afternoon. Factoring in the infusion costs, he writes:
Novartis notes that the total annual cost of Ocrevus is estimated to be on average $100,500, and can vary significantly depending on where the infusion is administered. Relative to this comparison, Kesimpta is priced at a discount, and it will be reimbursed through a pharmacy benefits model.
That’s inspired estimates averaging around $1.3 billion in peak sales for MS, making it a top-10 late-stage drug when ranked by prospective sales. CEO Vas Narasimhan also hasn’t been shy about encouraging ambitious goals. Roche, meanwhile, reported sales of $2.2 billion for the first half of this year, making it one of their fastest-growing franchises.
Here’s the Phase III data that won over regulators:
Kesimpta demonstrated a significant reduction in ARR (annualized relapse rate) by 51% (0.11 vs 0.22) and 59% (0.10 vs 0.25) compared with teriflunomide (Sanofi’s aging Aubagio) (P<.001 in both studies) in ASCLEPIOS I and II, respectively (primary endpoint). Kesimpta also showed a relative risk reduction of 34.4% (P=.002) in 3-month CDP compared with teriflunomide in pre-specified meta-analysis, as defined in ASCLEPIOS1.