Was PTC Ther­a­peu­tics play­ing games when it tried to defuse the de­flaza­cort con­tro­ver­sy with a $35,000 an­nu­al price?

PTC Ther­a­peu­tics CEO Stu­art Peltz

When PTC Ther­a­peu­tics $PTCT CEO Stu­art Peltz rolled out the biotech’s Q1 re­port this morn­ing, he not­ed that com­pa­ny ex­ecs came up with what they be­lieve is a “sus­tain­able” price for the cheap, old steroid ac­quired from the con­tro­ver­sial crew at Marathon Phar­ma­ceu­ti­cals for $140 mil­lion up front and tar­get­ed at the Duchenne com­mu­ni­ty in the US.

The net price, he said, would av­er­age $35,000 a year for a pa­tient that weighed 25 kilo­grams, or 55 pounds.

“We be­lieve this rep­re­sents sus­tain­able pric­ing which bal­ances pro­vid­ing ac­cess to all el­i­gi­ble pa­tients in the US in an ul­tra or­phan pop­u­la­tion while main­tain­ing suf­fi­cient in­fra­struc­ture and pro­grams, in­clud­ing con­tin­ued in­vest­ment in Duchenne,” Peltz said.

That $35,000 net — the price pay­ers could ex­pect af­ter dis­counts — sound­ed like quite a drop from the $89,000 an­nu­al price point that trig­gered a storm of protest for Marathon, un­til you start to do the math on what these pa­tients ac­tu­al­ly weigh.

Matthew Eck­ler, RBC

RBC’s Matthew Eck­ler did the math, and came up with a much high­er num­ber. If you con­sid­er that most of the boys are in the 35- to 40-ki­lo range, he says, you’re re­al­ly talk­ing about an av­er­age range more like $45,000 to $50,000 a year.

That’s 45 to 50 times more than the $1,000 av­er­age price Duchenne par­ents have been pay­ing to bring in de­flaza­cort, a gener­ic out­side the US which has been avail­able for decades at a low price. But now that it’s ap­proved and avail­able in the US, those for­eign sup­pli­ers are be­ing closed to Amer­i­can fam­i­lies. And PTC’s “net” price may ac­tu­al­ly wind up high­er than the $54,000 price Marathon field­ed, but failed to sell.

Ac­cord­ing to com­mu­ni­ty ac­tivist Chris­tine Mc­Sh­er­ry of the non­prof­it Jett Foun­da­tion, many of the old­er pa­tients like her son now weigh 60 to 100 ki­los, and at that range the price — pro­vid­ed PTC sticks to the weight/cost ra­tio — par­ents would ac­tu­al­ly be forced to buy the steroid with a net price high­er than Marathon’s $89,000 tag.

So, I asked Eck­ler, for boys weigh­ing 75 ki­los this would mean a price of $105,000?

Eck­ler replied:

Based on what they have told us yes, but that as­sumes the cost per mg is the same for all size boys.

It’s pos­si­ble that they could work out agree­ments with pay­ors where the cost per mg is not sta­t­ic based on the weight of boys. At this point (we) will have to wait and see. Re­gard­less, there will be boys who are much heav­ier than the 25mg guide­line and thus (their) cost is go­ing to be more.

PTC did not ex­plain what it’s whole­sale ac­qui­si­tion cost, or WAC, was or how the weight/price for­mu­la would work. It’s ex­treme­ly un­usu­al for com­pa­nies to avoid the high WAC price tag en­tire­ly. Most be­gin with that and then ne­go­ti­ate pri­vate­ly with pay­ers.

Even at $35,000, an­a­lysts like Eck­ler ex­pect the head­lines to con­tin­ue to run against PTC, now that the com­pa­ny has picked up the price goug­ing ti­tle that Marathon has been try­ing so hard to shed. And that could play hav­oc with PTC’s plans to start work­ing with the US Duchenne com­mu­ni­ty as it tries to force the FDA to re­verse its po­si­tion on ataluren — a drug that failed its last three stud­ies in a row — and ap­prove it for US mar­ket­ing. The drug is avail­able in Eu­rope.

Notes Eck­ler:

Drug pric­ing has re­mained in the head­lines as a non-par­ti­san po­lit­i­cal ral­ly­ing cry, and we don’t an­tic­i­pate this will change in the near term. Ul­ti­mate­ly, we see this as­set as neg­a­tive on an NPV ba­sis giv­en: 1) the sig­nif­i­cant up­front in­vest­ment ($140M vs. 2017 sales guid­ance of $5-$10M) for a drug which we view as hav­ing ~120M in peak sales po­ten­tial; 2) the avail­abil­i­ty of oth­er cor­ti­cos­teroids for DMD pa­tients; and 3) the like­li­hood of con­tin­ued pric­ing con­tro­ver­sy and pay­or push­back re­sult­ing in a tem­pered com­mer­cial launch.

I asked an­oth­er an­gry Duchenne par­ent what she planned to do now that PTC has post­ed a price.

“Still go­ing to Mex­i­co,” she replied, re­fer­ring to the low-cost phar­ma­cies that sell drugs cheap along the bor­der.

One big stum­bling block that PTC faces is gener­ic pred­nisone, which is shap­ing up as the pre­ferred steroid among pay­ers — for some ob­vi­ous rea­sons. I asked Ex­press Scripts about their ap­proach to de­flaza­cort (brand name Em­flaza), and they replied:

We are re­quir­ing a pri­or au­tho­riza­tion for this med­ica­tion. For the man­age­ment of DMD, our cri­te­ria re­quires pa­tients to try the low­er cost, equal­ly ef­fec­tive pred­nisone be­fore Em­flaza. Ex­cept for rare cas­es, the low­er cost pred­nisone should work for pa­tients. The price of pred­nisone is any­where from $0.08 per tablet to $1.50 per tablet.

The neg­a­tive sen­ti­ment isn’t sit­ting too well with the in­vest­ment com­mu­ni­ty, which has dri­ven PTC’s shares down by 10% so far to­day.

GSK presents case to ex­pand use of its lu­pus drug in pa­tients with kid­ney dis­ease, but the field is evolv­ing. How long will the mo­nop­oly last?

In 2011, GlaxoSmithKline’s Benlysta became the first biologic to win approval for lupus patients. Nine years on, the British drugmaker has unveiled detailed positive results from a study testing the drug in lupus patients with associated kidney disease — a post-marketing requirement from the initial FDA approval.

Lupus is a drug developer’s nightmare. In the last six decades, there has been just one FDA approval (Benlysta), with the field resembling a graveyard in recent years with a string of failures including UCB and Biogen’s late-stage flop, as well as defeats in Xencor and Sanofi’s programs. One of the main reasons the success has eluded researchers is because lupus, akin to cancer, is not just one disease — it really is a disease of many diseases, noted Al Roy, executive director of Lupus Clinical Investigators Network, an initiative of New York-based Lupus Research Alliance that claims it is the world’s leading private funder of lupus research, in an interview.

Fangliang Zhang, AP Images

UP­DAT­ED: Leg­end fetch­es $424 mil­lion, emerges as biggest win­ner yet in pan­dem­ic IPO boom as shares soar

Amid a flurry of splashy pandemic IPOs, a J&J-partnered Chinese biotech has emerged with one of the largest public raises in biotech history.

Legend Biotech, the Nanjing-based CAR-T developer, has raised $424 million on NASDAQ. The biotech had originally filed for a still-hefty $350 million, based on a range of $18-$20, but managed to fetch $23 per share, allowing them to well-eclipse the massive raises from companies like Allogene, Juno, Galapagos, though they’ll still fall a few dollars short of Moderna’s record-setting $600 million raise from 2018.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 83,100+ biopharma pros reading Endpoints daily — and it's free.

As it hap­pened: A bid­ding war for an an­tibi­ot­ic mak­er in a mar­ket that has rav­aged its peers

In a bewildering twist to the long-suffering market for antibiotics — there has actually been a bidding war for an antibiotic company: Tetraphase.

It all started back in March, when the maker of Xerava (an FDA approved therapy for complicated intra-abdominal infections) said it had received an offer from AcelRx for an all-stock deal valued at $14.4 million.

The offer was well-timed. Xerava was approved in 2018, four years after Tetraphase posted its first batch of pivotal trial data, and sales were nowhere near where they needed to be in order for the company to keep its head above water.

Drug man­u­fac­tur­ing gi­ant Lon­za taps Roche/phar­ma ‘rein­ven­tion’ vet as its new CEO

Lonza chairman Albert Baehny took his time headhunting a new CEO for the company, making it absolutely clear he wanted a Big Pharma or biotech CEO with a good long track record in the business for the top spot. In the end, he went with the gold standard, turning to Roche’s ranks to recruit Pierre-Alain Ruffieux for the job.

Ruffieux, a member of the pharma leadership team at Roche, spent close to 5 years at the company. But like a small army of manufacturing execs, he gained much of his experience at the other Big Pharma in Basel, remaining at Novartis for 12 years before expanding his horizons.

Covid-19 roundup: Ab­b­Vie jumps in­to Covid-19 an­ti­body hunt; As­traZeneca shoots for 2B dos­es of Ox­ford vac­cine — with $750M from CEPI, Gavi

Another Big Pharma is entering the Covid-19 antibody hunt.

AbbVie has announced a collaboration with the Netherlands’ Utrecht University and Erasmus Medical Center and the Chinese-Dutch biotech Harbour Biomed to develop a neutralizing antibody that can treat Covid-19. The antibody, called 47D11, was discovered by AbbVie’s three partners, and AbbVie will support early preclinical work, while preparing for later preclinical and clinical development. Researchers described the antibody in Nature Communications last month.

President Donald Trump (left) and Moncef Slaoui, head of Operation Warp Speed (Alex Brandon, AP Images)

UP­DAT­ED: White House names fi­nal­ists for Op­er­a­tion Warp Speed — with 5 ex­pect­ed names and one no­table omis­sion

A month after word first broke of the Trump Administration’s plan to rapidly accelerate the development and production of a Covid-19 vaccine, the White House has selected the five vaccine candidates they consider most likely to succeed, The New York Times reported.

Most of the names in the plan, known as Operation Warp Speed, will come as little surprise to those who have watched the last four months of vaccine developments: Moderna, which was the first vaccine to reach humans and is now the furthest along of any US effort; J&J, which has not gone into trials but received around $500 million in funding from BARDA earlier this year; the joint AstraZeneca-Oxford venture which was granted $1.2 billion from BARDA two weeks ago; Pfizer, which has been working with the mRNA biotech BioNTech; and Merck, which just entered the race and expects to put their two vaccine candidates into humans later this year.

Is a pow­er­house Mer­ck team prepar­ing to leap past Roche — and leave Gilead and Bris­tol My­ers be­hind — in the race to TIG­IT dom­i­na­tion?

Roche caused quite a stir at ASCO with its first look at some positive — but not so impressive — data for their combination of Tecentriq with their anti-TIGIT drug tiragolumab. But some analysts believe that Merck is positioned to make a bid — soon — for the lead in the race to a second-wave combo immuno-oncology approach with its own ambitious early-stage program tied to a dominant Keytruda.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

Pfiz­er’s Doug Gior­dano has $500M — and some ad­vice — to of­fer a cer­tain breed of 'break­through' biotech

So let’s say you’re running a cutting-edge, clinical-stage biotech, probably public, but not necessarily so, which could see some big advantages teaming up with some marquee researchers, picking up say $50 million to $75 million dollars in a non-threatening minority equity investment that could take you to the next level.

Doug Giordano might have some thoughts on how that could work out.

The SVP of business development at the pharma giant has helped forge a new fund called the Pfizer Breakthrough Growth Initiative. And he has $500 million of Pfizer’s money to put behind 7 to 10 — or so — biotech stocks that fit that general description.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 83,100+ biopharma pros reading Endpoints daily — and it's free.

Leen Kawas, Athira CEO (Athira)

Can a small biotech suc­cess­ful­ly tack­le an Ever­est climb like Alzheimer’s? Athi­ra has $85M and some in­flu­en­tial back­ers ready to give it a shot

There haven’t been a lot of big venture rounds for biotech companies looking to run a Phase II study in Alzheimer’s.

The field has been a disaster over the past decade. Amyloid didn’t pan out as a target — going down in a litany of Phase III failures — and is now making its last stand at Biogen. Tau is a comer, but when you look around and all you see is destruction, the idea of backing a startup trying to find complex cocktails to swing the course of this devilishly complicated memory-wasting disease would daunt the pluckiest investors.