To be cost-ef­fec­tive, Bio­gen should slash Spin­raza price, and No­var­tis can­not jus­ti­fy a $4M-$5M price tag for Zol­gens­ma — ICER

As treat­ments for rare dis­eases and gene ther­a­pies make strides on the US mar­ket, the is­sue of pric­ing is once again cen­ter stage. Bio­gen should cut the price of its spinal mus­cu­lar at­ro­phy (SMA) treat­ment Spin­raza and the price for No­var­tis’ one-shot Zol­gens­ma — which is ex­pect­ed to win FDA ap­proval by May — is jus­ti­fi­able up to $1.5 mil­lion, Boston-based ICER con­clud­ed on Wednes­day.

Akin to NICE in the UK, ICER is an in­de­pen­dent body that an­a­lyzes the cost-ef­fec­tive­ness of drugs and oth­er med­ical ser­vices in the Unit­ed States. Un­like NICE, though, ICER is not gov­ern­ment-af­fil­i­at­ed, but its de­ter­mi­na­tions are in­creas­ing­ly be­com­ing in­flu­en­tial with pay­ers.

Spin­raza was ap­proved by the FDA amidst much fan­fare in 2016 as the first and on­ly dis­ease-mod­i­fy­ing treat­ment for SMA, a rare and but lead­ing ge­net­ic cause of in­fant deaths. But the price tag of $750,000 for the first year of ther­a­py (and a $375,000 there­after) sparked heavy crit­i­cism, even though many pay­ers even­tu­al­ly agreed to re­im­burse the treat­ment. It gen­er­at­ed $1.7 bil­lion in 2018 sales for Bio­gen.

No­var­tis’ Zol­gens­ma is cur­rent­ly un­der FDA re­view and the agency is ex­pect­ed to an­nounce its de­ci­sion in the com­ing months. The Swiss drug­mak­er has sug­gest­ed a price of $4 mil­lion for the gene re­place­ment ther­a­py, which it ac­quired via its $8.7 bil­lion takeover of AveX­is, may be jus­ti­fied.

David Rind

“(T)he cur­rent price of Spin­raza far ex­ceeds com­mon thresh­olds for cost-ef­fec­tive­ness. The price of Zol­gens­ma is not yet known, but there has been pub­lic dis­cus­sion of prices above com­mon­ly ac­cept­ed cost-ef­fec­tive­ness thresh­olds as well. These treat­ments will be cov­ered by US in­sur­ers re­gard­less of the pric­ing, but the rip­ple ef­fect of pric­ing de­ci­sions like these threat­ens the over­all af­ford­abil­i­ty and sus­tain­abil­i­ty of the US health sys­tem,” ICER’s chief med­ical of­fi­cer David Rind said in a state­ment.

In the ini­tial draft ICER rec­om­men­da­tions is­sued late last year, ICER had sug­gest­ed Zol­gens­ma — priced at $2 mil­lion — could be more cost-ef­fec­tive in the long run ver­sus Spin­raza.

On Wednes­day, ICER’s fi­nal re­port sug­gest­ed al­though Spin­raza’s price “should be far low­er than it is, and the price for Zol­gens­ma should be low­er than the hy­po­thet­i­cal $4-5 mil­lion price the man­u­fac­tur­er has sug­gest­ed could be jus­ti­fied.”

ICER con­duct­ed its analy­ses us­ing two mea­sures: 1) QALYs, or qual­i­ty-ad­just­ed life-years, are a mea­sure of the state of health of a per­son or group in which the ben­e­fits — in terms of length of life — are ad­just­ed to re­flect the qual­i­ty of life. Es­sen­tial­ly, one QALY is equal to one year of life in per­fect health. 2) Life years gained (LYG), which ex­press­es the ad­di­tion­al num­ber of years of life that a per­son lives as a re­sult of re­ceiv­ing a treat­ment.

His­tor­i­cal­ly, life ex­pectan­cy in the most com­mon and se­vere form of SMA (type I) is less than two years. Sur­vival de­pends on res­pi­ra­to­ry func­tion, and many in­fants and chil­dren even­tu­al­ly re­quire per­ma­nent ven­ti­la­tion.

Us­ing the QALY mea­sure for cost-ef­fec­tive­ness, Spin­raza’s val­ue was as­sessed in the presymp­to­matic pop­u­la­tion, as there are da­ta sup­port­ing its ef­fec­tive­ness in these types of pa­tients. The drug’s price should be be­tween $72,000-$130,000 for the first year of treat­ment and be­tween $36,000-$65,000 for each suc­ces­sive year. Un­der the LYG bench­mark, Spin­raza would need to be priced be­tween $83,000-$145,000 dur­ing the ini­tial year and $41,000-$72,000 for each suc­ces­sive year, ICER said.

“As the re­port notes, there is a sig­nif­i­cant dif­fer­ence in ro­bust­ness and qual­i­ty of ev­i­dence for Spin­raza as com­pared to Zol­gens­ma. The analy­sis, how­ev­er, fails to ac­count for those dif­fer­ences. Spin­raza is the stan­dard of care in SMA and has ben­e­fit­ted the lives of more than 6,600 peo­ple. In con­trast, Zol­gens­ma is an ex­per­i­men­tal ther­a­py which has re­port­ed re­sults to date for on­ly 15 pa­tients fol­lowed for up to 2.5 years, sev­en of whom are re­port­ed to have sub­se­quent­ly ini­ti­at­ed treat­ment with Spin­raza,” a Bio­gen spokesper­son said in an emailed state­ment.

Mean­while, ICER did not vote on the long-term val­ue of Zol­gens­ma, as its fi­nal price is not yet known. It con­duct­ed its as­sess­ment for the SMA type I pop­u­la­tion as this is the on­ly pop­u­la­tion in which it has been clin­i­cal­ly eval­u­at­ed. Us­ing QALY, the ther­a­py’s price for type I SMA would need to be be­tween $310,000-$900,000 per shot, while un­der the LYG bench­mark it would need to be be­tween $710,000-$1.5 mil­lion per treat­ment, ICER con­clud­ed.

“The val­ue mea­sures and thresh­olds em­ployed by ICER in this re­port are de­signed around the sta­tus quo of chron­ic care man­age­ment and can­not pos­si­bly cap­ture the full ben­e­fits of dis­ease-mod­i­fy­ing treat­ments de­liv­ered as a one-time ad­min­is­tra­tion,” a No­var­tis spokesper­son said in an emailed state­ment.

ICER al­so rec­om­mend­ed pay­ers en­dorsed the con­cept of val­ue-based con­tracts, a sys­tem in which a re­im­burse­ment for a sub­stan­tial por­tion of the treat­ment is not passed on to the drug­mak­er, should pa­tients not re­ceive ad­e­quate clin­i­cal ben­e­fit.


Im­age: Shut­ter­stock

Jake Van Naarden, Josh Bilenker, Nisha Nanda (Credit: Loxo, Aisling Capital)

Josh Bilenker and his Loxo crew are tak­ing the reins on on­col­o­gy R&D at Eli Lil­ly, culling the weak and map­ping a new path

Josh Bilenker, Jake Van Naarden and Nisha Nanda came out of Eli Lilly’s $8 billion Loxo Oncology buyout with a bundle of cash and plenty of choices on what they could do next. Start a new company, go public. Live on the beach in 5-star luxury. Contemplate the stars — in their own observatory.

So what are they doing?

They formed a new executive team that is taking over the management of Eli Lilly’s hundreds-strong oncology R&D group — essentially using Loxo as a base for a bold new experiment in Big Pharma R&D in an attempt to create a true biotech environment with the deep pockets of a top-15 industry player. They’ve recruited David Hyman from Memorial Sloan Kettering to join the team as chief medical officer. And the mandate includes culling out the oncology pipeline, highlighting their star prospects and going after new programs wherever they can find the best prospects.

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J&J team shows off 'break­through' BC­MA CAR-T da­ta, and that could cause a big headache at blue­bird and Bris­tol-My­ers

Just hours after J&J’s oncology team bragged about scoring a breakthrough therapy designation for their BCMA CAR-T drug, they pulled the wraps off of the multiple myeloma data for JNJ-4528 that impressed the FDA. And it’s easy to see why they may well be on a short path to a landmark approval — which may well be making the rival team at bluebird/Bristol-Myers more than a little nervous.

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J&J's Mathai Mammen at an Endpoints News event in Boston, June 2018 (Photo: Rob Tannenbaum for Endpoints News)

J&J fronts $750M cash to grab a failed can­cer drug that’s been re­pur­posed as a pow­er­ful an­ti-in­flam­ma­to­ry

J&J has stepped up with one of its blockbuster drug buys, agreeing to pay Austin-based XBiotech $XBIT $750 million in cash and up to $600 million more in milestones for their late stage-ready anti-inflammatory drug bermekimab — which some longtime biotech observers may recognize as a failed cancer therapy with a disaster-prone past.

The drug targets the IL-1a pathway. J&J $JNJ R&D chief Mathai Mammen is cutting a check for a drug that has produced positive mid-stage data in patients suffering from a skin condition called hidradenitis suppurativa with another mid-stage program underway for atopic dermatitis.

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Sangamo CEO Sandy Macrae

Pa­tient #9 has been a con­cern, but Sang­amo and Pfiz­er are bull­ish about win­ning the marathon he­mo­phil­ia A gene ther­a­py race

Patient number 9 has given Sangamo and its partners at Pfizer some heart palpitations in their high profile hemophilia A gene therapy program.

After watching his Factor VIII level rise following treatment like the rest, the crucial efficacy gauge they track saw a sudden and significant plunge. At week 13, the FVIII level had dropped below normal. Then it began to rise again.

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Un­lock the full End­points ex­pe­ri­ence for your com­pa­ny — and sup­port our mis­sion of in­de­pen­dent bio­phar­ma re­port­ing

I want to give readers a quick update on the most important part of our business model — premium subscriptions. We have some crucial financial goals we hope to achieve by the end of the year, and the team here in Lawrence is ready to ship some swag to kick off this limited December promotion.

We offer two premium plans — Enterprise for companies ($1,000/year, unlimited people), and Insider for individuals ($200/year). This month of December will be the last chance to enroll at the original rates — which have remained flat since we launched them in 2017.

One of Wall Street’s most high-pro­file hedge funds push­es Alex­ion's CEO to the auc­tion block — and he's not budg­ing

Fresh off buying Barnes & Noble and prodding AT&T with some heavy-handed criticism after picking up a $3.2 billion stake in the company, the activist — and supremely high profile — hedge fund Elliott Management has stepped up with some M&A advice for Alexion’s management team.
And the execs on the team $ALXN are giving them a polite — but very firm — stiff arm Friday morning.
In a release out early Friday, the big biotech said that the Elliott team had been in touch to encourage them to sell the company. But that’s not on the agenda.

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Samantha Budd Haeberlein. Biogen via YouTube

UP­DAT­ED: Skep­tics pounce as Bio­gen de­tails pos­i­tive sub­group analy­sis on ad­u­canum­ab — and both sides are dig­ging in

“Exhilarating.” “A major advance.” “A milestone achievement.” If one had just tuned into the panel comments on Biogen’s presentation at CTAD, it would seem that the biotech had an impressive, disease-modifying Alzheimer’s drug in aducanumab.

But off the stage, reactions to their admittedly complicated dataset and the biotech’s explanation for resurrecting a drug that failed its futility analysis were a lot more mixed, with analysts continuing to question whether the evidence is substantial enough to warrant an FDA approval and raising new doubts on the safety side.

In an investor call later in the day, execs noted that they are not planning another study and stood by their intention, publicized in October to much surprise, to submit regulatory filings based on what they have.

“We don’t file willy nilly,” said Al Sandrock, head of R&D. “We only go to filing when we believe that there is a benefit-risk argument based on science, based on data. And if you look at our history, we haven’t done filings right and left without good reason.”

Biogen had a theory going into the Clinical Trials on Alzheimer’s Disease meeting.

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Vas Narasimhan, Getty Images

No­var­tis CEO Vas Narasimhan's R&D up­date spot­lights next wave of drug stars as well as late-stage fa­vorites

As one of the biggest spenders in biopharma R&D, Novartis execs love to tout the scope of its late-stage pipeline, spotlighting the winners most likely to create blockbuster revenue streams in the near future.

Building on the 5 drug approvals the pharma giant expects to end the year with, Novartis CEO Vas Narasimhan — who’s done a slate of acquisitions topped by the recent $9.7 billion MedCo buyout — tapped the top emerging drugs as:

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Jeff Jonas, Sage

UP­DAT­ED: Sage's star ex­per­i­men­tal de­pres­sion drug fails the cru­cial MOUN­TAIN study — shares crash

Sage Therapeutics’ crucial MOUNTAIN study for Sage-217 has failed, setting the stage for a quick and ugly investor backlash.

Widely viewed by analysts as the critical clinical study $SAGE needed to win on major depression, researchers say the drug failed to beat out a placebo at day 15, falling well short of the mark for statistical significance on the primary endpoint. And investors reacted with alacrity, fleeing the stock and gutting the price with a 60% instantaneous drop — erasing about $4.6 billion in market cap in an instant.

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