Gaucher Disease: The Fight For Market Share

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by: Peter Geschek

Cerezyme is the principal drug for Gaucher patients.

In the first quarter of 2012 Genzyme (now part of Sanofi (NYSE:SNY)) reported Cerezyme sales of 149 million euros (approx. $194 million), up 5.8% from the same quarter of the previous year.

The other supplier Shire (SHPGY) reported $72 million in Vpriv sales, up 22%.

There is now a third supplier, Pfizer (NYSE:PFE), teamed up with the Israeli company Protalix Biotherapeutics (NYSEMKT:PLX), whose product was approved by the FDA in May 2012.

Elelyso (taliglucerase alfa) is now available in the US.

But Pfizer and Protalix hit a setback when the European Medicines Agency's Committee for Medicinal Products for Human Use (NASDAQ:CHMP) decided not to recommend Marketing Authorization for Pfizer's drug. Shire's product had already been designated an orphan drug giving it exclusivity in the European Union for ten years from the time of its authorization in August 2010. The Committee, nevertheless, gave a positive risk-benefit assessment of Pfizer's drug, so efficacy was not the issue.

Pfizer pursued a request for derogation from Shire's orphan market exclusivity based on a number of factors. This request, however, was denied.

In the US Elelyso is dosed at 60 Units/kg and infused by IV in a hospital environment every other week. The infusion lasts about 60-120 minutes. Dosage adjustments may be made based on each patient's situation.

At launch, Elelyso was priced at $150,000 for a year of therapy, which is 25% lower than Cerezyme's $200,000 price tag. Elelyso also costs less than Shire's Vpriv, which was launched in 2010 at a price of $170,000 per patient per year.

Gaucher drugs replace a missing enzyme in patients who have Type 1 (non-neuropathic) Gaucher disease, which is the most common type.

A doctor administers the medications by infusion twice a month.

Gaucher disease occurs in people who do not produce enough of an enzyme called glucocerebrosidase. The enzyme deficiency causes fatty materials to collect in the spleen, liver, kidneys, and other organs and leads to low red blood cell counts and bone problems.

Type 1 Gaucher disease is ultra rare. It is estimated to affect about 6,000 people in the United States, and about 10,000 in the world.

Protalix Biotherapeutics devised a way to produce the drug in plants. The human enzyme that Gaucher disease patients lack is created in carrot cells by inserting a gene that encodes the protein into the cells.

Manufacturers of the two other Gaucher drugs - Genzyme in the US and Shire in Ireland - produce their therapeutic enzymes in mammalian (hamster) cells.

According to Protalix, their method has several advantages. First of all, the whole set up is simpler.

Protalix has built bioreactors consisting of sterilized, large flexible plastic containers for culturing and harvesting cells.

The bioreactors are optimized for temperature, lighting, air, and nutrient supplies. Since all components of the system are fixed, purification techniques for each specific protein are highly efficient.

The result is lower capital requirement, lower production costs and scalability.

In addition, upgrading plant cell bioreactors is relatively simple: no new type of equipment is needed. Adding standard modules is sufficient to increase production.

Scaling up mammalian cell bioreactors, on the other hand, is expensive: it requires newly designed equipment which would probably need new approvals from regulators.

Protalix has yet another benefit. According to the laws of nature, plant cells do not carry a risk of infection by human or other animal viruses.

Finally, Protalix's ProCellEx protein expression system produces enzymes which have uniform glycosilation patterns and therefore do not require the lengthy and expensive post-expression modifications that are required for certain proteins produced by mammalian cell-based systems.

The results in an end product that is safe and consistent.

In 2009, Genzyme began having manufacturing problems at its Allston, Massachusetts plant. In early 2012, Genzyme opened a new plant in Framingham, Massachusetts.

Shire too has been held back by capacity constraints and has been racing to bring a facility in Lexington online. In early 2012 the new plant was approved by European authorities, but the FDA set additional requirements.

Pfizer's advantages: These drugs are for an ultra rare disease for an ultra high price.

Cerezyme costs over $200,000 per patient for a year and as such is on a list of the 10 most expensive drugs in the US. Because of a simpler production environment, Pfizer can afford to underbid its competitors.

Some other factors in Pfizer's favor:

  • Pfizer has the experience and ability to facilitate pre-approvals from insurance companies.
  • Shortages of the drug in the past three years has stirred up a certain amount of animosity toward the earlier suppliers in doctors and patients. These negative feelings should not be underestimated.

Pfizer, in order to avoid these kinds of problems, is planning an inventory reserve system to avoid shortages. It will stock 24-months worth of drugs to serve all the 1,500 to 2,000 current Gaucher patients in the United States. Reserves will be kept at plants in Israel, Germany, and in the US in Kalamazoo, Michigan, and Memphis, Tennessee.

  • Anecdotal evidence suggests that the 3 medicines are not carbon copies of each other, but affect slightly differently categories of Gaucher patients.

Elelyso seems to work very well for people with bone and fatigue problems. The other two may work well in other areas.

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

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