Novartis just laid out the playbook for making its $2.1 million gene therapy treatment a blockbuster. Here are the next steps.

Andrew Dunn

Jan 30, 2020, 01:22 IST

Novartis

Novartis CEO Vas Narasimhan

The pharmaceutical giant Novartis has already treated about 200 infants with its rare disease gene therapy, Zolgensma, the company said Wednesday. It plans to keep growing that figure in 2020.
Zolgensma became one of the first US-approved gene therapies last May. While the therapy has shown transformative benefits to newborns with spinal muscular atrophy, it has also stirred controversy and criticism with its $2.1 million list price and a data manipulation scandal.
Early sales have largely exceeded Wall Street's expectations, with Novartis reporting $361 million in Zolgensma revenue since its commercial launch.
CEO Vas Narasimhan outlined 2020 plans to launch internationally while expanding the US market by studying a broader patient population and boosting newborn screening rates for the disease.
Novartis' plans could serve as a playbook for the emerging gene therapy space. US regulators are anticipating a flurry of gene therapy approvals in the coming years, with more than 900 active experimental drug applications in this area.
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Novartis has largely beaten Wall Street's initial sales expectations for its cutting-edge gene therapy product, Zolgensma, setting it on a trajectory into a blockbuster drug.

The gene therapy for spinal muscular atrophy - a rare genetic disease - has brought in $361 million in sales since launching in May 2019. With its controversial $2.1 million price tag, that revenue has come from treating about 200 infants so far, the Swiss pharma said Wednesday in releasing its full-year financial results.

Those results blow past the early sales of Biogen's Spinraza, the first SMA treatment approved in 2016.

Spinraza, now a multibillion-dollar revenue maker, posted $255 million in sales at a similar point when it launched in 2016, according to Chardan biotech analyst Gbola Amusa. To compare, Zolgensma's sales are 42% higher. Amusa cited Zolgensma's "superior profile" as a main driver in its success.

The analyst expects Zolgensma annual sales to exceed $2 billion within the next few years, he wrote Wednesday in a research note to investors.

Expanding internationally is Zolgensma's 'next inflection point'

And Novartis is just getting started. CEO Vas Narasimhan laid out plans Wednesday for Zolgensma's sales to keep accelerating in 2020.

The company is anticipating to expand internationally this year, with regulatory decisions expected in Europe and Japan in the first half of 2020. Currently, the therapy is only approved in the US.

"We would expect in the U.S. to be largely at the rate of 100 patients a quarter until we have approal in Europe to have the next inflection point," Narasimhan said Wednesday on the company's earnings call, adding he expects the ex-US market to be larger than the US for Zolgensma.

Narasimhan said conversations with those international regulators are going "very well." The pharma is also expecting 2020 approval decisions in other countries, including Switzerland, Canada, Australia and Brazil among others.

US newborn screening rates remain low

Within the US market, there's still plenty of room for growth as well. While Novartis reported that 97% of people on commercial insurance are now covered for the therapy, roughly half of patients enrolled in Medicaid were covered at the end of 2019.

Business Insider previously reported about several payers reversing early decisions to deny coverage of Zolgensma.

Narasimhan said the pharma is "heavily focused on driving newborn screening," where just under 40% of babies born in the US are being screened for SMA. The Swiss pharma is hoping to get that number up to 70% by the end of 2020.

In states that are screening newborns, Zolgensma is being used two to three times as frequently, David Lennon, president of the Novartis subsidiary that developed the gene therapy, said in a recent interview.

Eyeing an older patient group and facing competition

Finally, Novartis is eyeing expanding the group of patients eligible for Zolgensma. But the company will first have to convince the FDA to allow a critical study to continue, after regulators placed the trial on hold with safety concerns.

That study is testing patients up to 5 years old and delivers Zolgensma as an injection into the spinal cord. The gene therapy was initially approved in only children under 2 years old as an intravenous injection.

The company plans to submit a data package to regulators in the next few weeks to address their questions. Narasimhan said he "would expect, or at least hope"that will be sufficient to resume that trial.

Zolgensma will likely face competition from other therapies by expanding into older children.

Beyond Spinraza, which is approved for all ages, Roche is expecting an FDA decision by May 24, 2020 for its SMA drug called risdiplam. Roche has been testing its drug in the SMA population ranging from newborns to 60-year-old patients.

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