Biotech Analysis Central Pharma News: Spark's Pricing Woes, Novartis' Breast Cancer Advance, Sangamo's Partnership With Pfizer

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Includes: BIIB, IONS, NVS, ONCE, PFE, SGMO
by: Terry Chrisomalis

Summary

Spark's pricing of Luxturna is sure to spark a heavy pricing debate on drug costs.

Novartis receives breakthrough therapy designation for breast cancer drug Kisqali.

Sangamo Therapeutics develops partnership with Pfizer to develop gene therapy treatment for ALS.

Welcome to Biotech Analysis Central Daily News, a daily news report and analysis about what has happened lately in the biotech industry.

Spark Therapeutics Issues Pricing On Gene Therapy Drug Luxturna

News: Recently, Spark Therapeutics (ONCE) announced its pricing strategy for its drug Luxturna, which treats patients with a rare disorder that causes blindness. This drug treats patients with a rare disease known as biallelic RPE65-mediated inherited retinal disease (IRD). The drug works by having a gene being replaced in a patient's retinal cells, which restores vision. This happens when the gene generates a protein necessary to help with vision problems. Spark is pricing its therapy at $850,000 per year. That would mean it will cost roughly around $425,000 per eye per year.

Analysis: Spark Therapeutics is stuck in a rough spot. That's because now it must convince payers and insurers to cover the cost of the treatment. It is not highly likely that patients will be able to afford this treatment themselves. It is up to Spark to convince them to hand over the cash for getting this drug out to patients. This all looks grim for Spark, but it has a bright spot. Its drug Luxturna is only needed to treat a patient once, and then they are cured of the disease. On the other hand, other medications like Spinraza cost a whopping $750,000 for the first year. After the first year, the patient must continue treatment and the cost for subsequent treatments are $375,000. That means Biogen (BIIB) and Ionis Pharmaceuticals (IONS) will continue to collect that amount for those treated with Spinraza for the life of the patient. On the other hand, Luxturna is a one time treatment and that's it. That doesn't stop the fact that there will be a massive outcry from the public on pricing. Fortunately for Spark Therapeutics it has a plan in place to carry out the cost of the treatment over a period of time, as opposed to a one time charge up front. The problem is that such a plan has not yet been set in motion. That means for the time being it has to convince insurers to pay the large amount of $850,000 per year. As long as Spark Therapeutics gets its payment using the ability to be paid over time, it should be in a good spot like Biogen and Ionis. Spark Therapeutics remains a good buy.

Novartis Picks Up Breakthrough Status For Breast Cancer Drug Kisqali

News: Recently, Novartis (NVS) announced that the FDA had given its breast cancer drug Kisqali breakthrough therapy designation. One thing to note is that the company is seeking for approval of Kisqali in pre- or perimenopausal women with hormone-receptor positive HR+/HER2- advanced or metastatic breast cancer. In addition, this potential approval will be for Kisqali in combination with either tamoxifen or an aromatase inhibitor.

Analysis: The breakthrough therapy designation is really good news for Novartis. That's because this designation is only given to such treatments that show to be superior to currently available therapies - meaning being better as a monotherapy or as a combination therapy compared to the current standard of care. What I also like about this designation is that it helps speed up the review process for the drug. That means that it will take less time than normal to get this drug out to patients that need a better treatment option. I believe that Novartis will likely get approval for this drug when it gets put up for review. The reason why I state this is because of positive data observed in a phase 3 trial known as MONALEESA-7. During the trial, it was observed that Kisqali saw patients treated with Kisqali obtain progression-free survival (PFS) of 28 months. That compares to endocrine therapy alone which only obtained a PFS rate of 13 months. Clearly there is a huge advantage for patients taking Novartis' combo therapy compared to endocrine therapy alone. That's why I have high hopes that the FDA will likely approve Kisqali for this indication. Novartis has done well with its pipeline. It remains a good buy.

Sangamo Therapeutics Generates Collaboration Agreement With Pfizer for ALS Disease

News: Sangamo Therapeutics (SGMO) recently announced that it had generated a collaboration agreement with Pfizer (PFE) to develop a gene therapy program targeting patients with ALS or Lou Gehrig's Disease. More specifically, Sangamo will use its Zinc Finger Protein - ZFP technology -- to target a mutated gene known as C90RF72. According to the terms of agreement Sangamo will obtain an upfront milestone payment of $12 million. It then has the potential to earn and additional $150 million in milestones and tiered royalties on net sales.

Analysis: At first sight this deal may seem weak, but I believe it is good nonetheless. That's because the upfront payment of $12 million provides a nice cushion of cash, which otherwise Sangamo would have to raise. Secondly, it strengthens the relationship between Sangamo and Pfizer. It is because this isn't the first pact that the two companies have made. Back in May of 2017 Sangamo and Pfizer created a collaboration agreement to co-develop a clinical candidate for Hemophilia A. Why I believe the relationship can only get stronger is the fact that Sangamo has a large pipeline. That means that this won't be the last deal that the two companies will collaborate on. It doesn't even rule out the possibility for Pfizer to eventually acquire Sangamo at a premium. Of course, that depends if the programs progress as planned with positive data. In either case, a new treatment option for patients with ALS is highly welcomed. Back in May of 2017, the FDA approved a drug known as Radicava which was developed and sold by MT Pharma America (a division of Mitsubishi Tanabe pharmaceuticals, a Japanese pharma company. What's the issue then? The problem is that this drug was approved not because it improved survival in patients. It was approved because it slows down the deterioration associated with ALS. That means that the more treatments that start to come out attempting to treat ALS, the better it will be for patients who need a new form of treatment. Sangamo Therapeutics remains a strong buy.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.