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5:47 PM
Jun 28, 2019
 |  BioCentury  |  Finance

All eyes on new modality launches, cancer and rare disease data in 3Q19

Investors to watch new modality launches and cancer and rare disease data in a light 3Q19

While the typical summer lull means fewer catalysts in the third quarter, investors will be keeping a close eye on launches of new modality drugs.

Of special interest to multiple buysiders is the launch of SMA gene therapy Zolgensma onasemnogene abeparvovec-xioi from the AveXis Inc. unit of Novartis AG, which could be the first litmus test of gene therapy's commercial potential.

“It’s important that the first few launches support the idea that these can be big commercial products and that the valuations of these companies are warranted,” Loncar Fund’s Brad Loncar said.

On the clinical data front, rare diseases and cancer will continue to command investor attention.

Buysiders will also be awaiting commercial and regulatory updates that could catalyze M&A.

New modalities on the market

So far most of the new modality products on the market have done reasonably well versus expectations, with the caveat that, other than Biogen Inc.'s Spinraza nusinersen, they’re still in the early phases of their launches.

However, OrbiMed's Sven Borho said the significance of other new modality launches pales in comparison to that of Zolgensma. “AveXis is important, but I think that’s the only one.”

Loncar noted that Zolgensma stands out as a particularly good case study for gene therapy because it is entering an Orphan market where a disease-modifying therapy -- Spinraza -- is already heavily used.

“It will give us a good window into how gene therapies compete in a market for which they’re not the only show in town,” said Loncar.

“It will give us a good window into how gene therapies compete in a market for which they’re not the only show in town.”

Brad Loncar, Loncar Fund

FDA approved Zolgensma on May 24, with Novartis announcing a price of $2.125 million. The Swiss pharma was hoping to employ an outcomes-based contract that put the majority of Zolgensma’s price at risk, similar to bluebird bio Inc.’s European commercial plans for its β thalassemia gene therapy Zynteglo. Those plans appear to have been scuppered by Medicaid’s best price rule, at least for now (see “Zolgensma’s Label More Surprising than its Price” and “Unsung Public Policy Innovators”).

Sales data from eight new modality therapies approved from 2016-18 show that only two came in below analyst consensus estimates in 1Q19. Ophthalmic gene therapy Luxturna voretigene neparvovec-rzyl from Spark Therapeutics Inc. and ex-U.S. partner Novartis had 1Q19 sales of $9.8 million, 26% below expectations. Despite outpacing competitor Kymriah tisagenlecleucel, Gilead Sciences Inc.’s CAR T therapy Yescarta axicabtagene ciloleucel missed 1Q19 analysts expectations by 9%, with three-month sales of $96 million (see Table: “New Modality Launches”).

Loncar said he plans to continue to monitor the progress of CAR T launches, though not with high hopes. “Those expectations are about as low as they could possibly get,” he said.

Table: New modality launches

Of the ten nucleic acid therapies, gene therapies and cell therapies receiving their first worldwide approvals in 2016-2018, eight have reported sales data. While most exceeded consensus estimates for 1Q19 sales, only spinal muscular atrophy therapy Spinraza nusinersen from Biogen Inc. (NASDAQ:BIIB) brought in over $100 million in revenues during the quarter. (A) Total revenues; Exodys is only marketed product; (B) Estimate from a single analyst; consensus not available Source: company earnings reports, analyst reports

CompanyPartnerProductFirst approved2018 sales ($M)1Q19 sales ($M)1Q19 estimateAbove/ below estimate
Nucleic acid therapies
Sarepta Therapeutics Inc. (NASDAQ:SRPT)Exondys 51 eteplirsen9/16/16$301.0 (A)$87.0 (A)$86.55 (A)0%
Biogen Inc. (NASDAQ:BIIB)Licensed from Ionis Pharmaceuticals Inc. (NASDAQ:IONS)Spinraza nusinersen12/23/16$1,724.0$518.0$485.07%
Alnylam Pharmaceuticals Inc. (NASDAQ:ALNY)Onpattro patisiran8/10/18$12.5$26.3$18.046%
Akcea Therapeutics, Inc. (NASDAQ: AKCA)Spun out of Ionis Pharmaceuticals Inc. (NASDAQ:IONS)Tegsedi inotersen10/5/18$2.0$7.0$6.74%
Gene therapies
Orchard Therapeutics plc (NASDAQ:ORTX)Licensed from GlaxoSmithKline plc (LSE:GSK; NYSE:GSK)Strimvelis5/26/16$2.1NR$0.5NA

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