Pharma, R&D

Novartis steps in to grab ex-US rights to pioneering gene therapy Luxturna with $170M deal

Vasant Narasimhan, Novartis

Vas Narasimhan

Just days ahead of Vas Narasimhan’s jump into the CEO’s spot, Novartis has swooped in with a $170 million deal to grab ex-US rights on Spark Therapeutics’ Luxturna, the first true gene therapy to get a US approval.

The pharma giant is paying $105 million in cash and putting another $65 million on the table for near-term European regulatory milestones. Spark $ONCE also qualifies for a royalty stream on ex-US sales.

The deal leaves Spark on track to set up its own US marketing operation for Luxturna, which is designed for RPE65 mutation-associated cases of retinal dystrophy.

Novartis will be spearheading a commercial operation in Europe that follows the tracks of two other approved gene therapies which have only managed to reach a handful of patients. And it faces some steep commercial barriers for a therapy that’s been priced at $850,000 — $425,000 per eye — in the US. Narasimhan, though, has put a big premium on playing a leading role in developing and marketing cell and gene therapies in key markets.

Dan Faga

The WAC price for Luxturna in the US falls toward the higher end of analysts’ bets, which ranged from about $600,000 to just under the $1 million mark for what’s intended as a one-time treatment for the rare, sight-stealing genetic condition. Now the highest priced therapy in the country — outpacing drugs like Spinraza at $750,000 for the first year of therapy — it fell on Spark to come up with the right pricing model that can persuade payers to cover the procedure for a tiny group of under 2,000 potential patients, with fewer than 20 new patients per year.

Wedbush is skeptical that those kinds of patient numbers will play to Novartis’ favor. They note:

Novartis’ resources and commercial expertise will not be able to overcome the main shortcoming with Luxturna program: an addressable population that is simply too small to generate meaningful value.

Novartis will also face a group of single payer operations with considerable leverage over pricing, typically well under US rates.

“By leveraging Novartis’ large, existing commercial and medical infrastructure in ophthalmology, as well as its commitment to commercializing genetic-based medicines, we help ensure that more patients with confirmed biallelic RPE65 mutation-associated retinal dystrophy who live outside the U.S., and importantly outside of Europe, have access to investigational voretigene neparvovec,” said Dan Faga, chief business officer, Spark Therapeutics. And the money they’re getting will be put toward the R&D costs for the rest of their pipeline products, including an advanced program for hemophilia B.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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