Xolair for food allergies: effective therapy at a high price

Food allergies affect 5-10% of the American population. Their prevalence continues to increase, with significant quality-of-life impairments for patients and their families[1]. It is a unique indication in that patients are not chronically ill, but acute illness can occur within minutes even with proper precautions. Death is extremely rare[2].  For decades, the space has seen little in the way of treatment, with the cornerstone of management being strict allergen avoidance. Oral immunotherapy is an option to desensitize patients to their allergens, but it is burdensome and carries risk of allergic reactions and high discontinuation rates[3]. Xolair (omalizumab, anti-IgE antibody, Genentech/Novartis) offers high clinical benefit, safely increasing the amount of allergen that patients can tolerate without experiencing symptoms of severe allergic reactions that can occur through accidental exposure.

Xolair is incredibly efficacious in this indication, with modest safety/tolerability and convenience drawbacks. Even though it comes with a black box warning for anaphylaxis, safety is a minor concern in practice- it boasts a mild side effect profile and its safety is well established, as it has been on the market for more than 20 years in other indications.

Xolair also confers benefit in common comorbid allergic conditions, such as rhinitis, asthma, and eczema. Xolair comes as a metered-dose autoinjector or prefilled syringe that can be administered at home approximately every other week or every four weeks, depending on baseline IgE levels and body weight, and must be administered indefinitely for continued benefit. Typically, drugs with clinical innovation of 5% or more go on to achieve reasonably strong patient share. Xolair in this indication has very high clinical benefits, but at a steep price of around $100,000 a year. We anticipate strong interest from patients and physicians, but strong push-back from payers.

Xolair will likely become a candidate for biosimilar development when it goes off patent within the next few years, which will likely mitigate the high price and expand access in this poorly served indication. 

[1] https://www.cdc.gov/nchs/pressroom/nchs_press_releases/2022/20220126.htm

[2] Umasunthar et al. 2013

[3] Mori et al. 2021

Monoclonal antibodies for Alzheimer’s disease: questionable clinical benefit at a high price

With novel treatments for Alzheimer’s disease dominating the headlines, the most recent being donanemab with the FDA requesting an independent advisory committee to review its safety and efficacy[1], questions remain about their clinical benefit. As the number of patients with Alzheimer’s disease in the US is projected to grow in the coming years, so does the need for a paradigm-changing treatment. However, our model finds that the new monoclonal antibodies offer little clinical innovation over the old standard of care, donepezil. Leaving aside price, their disadvantages in safety/tolerability and dosing outweigh their modest efficacy gains.  

Despite remaining on the market, unlike its ill-fated predecessor Aduhelm, Leqembi shows negative clinical innovation over donepezil of -10.0% in our framework. This is little better than Aduhelm, which shows -11.0% clinical innovation vs. donepezil. As shown above, much of the negative clinical innovation is driven by convenience. Leqembi is given as a one-hour IV infusion every two weeks, compared with donepezil’s once-a-day pill. While Leqembi offers an efficacy benefit measured by standard measures of cognitive decline in AD, this pales in comparison to the inconvenience of the regimen, combined with high cost, high prevalence of potentially serious side effects and a black box warning for amyloid-related imaging abnormalities (ARIA). Questions also remain about how clinically meaningful the improved efficacy is: it is unclear how much patients and their families can appreciate a slowing in cognitive decline of about 6 months for the fraction of patients that experience it.[2]

Even though little separates Leqembi from Aduhelm in our framework, Leqembi has managed to achieve modest sales – around $10.1 million in 2023, still well below the original Eisai projections of $28 million for the year.[3] This is despite the fact that the Institute for Clinical and Economic Review (ICER) deemed its current annual WAC price of around $26,000 to offer low long-term value for money, suggesting a more appropriate price is around $10,000 annually.[4]

In spite of these equivocal results, in-class Eli Lilly drug donanemab was originally expected to be approved this year, with some analysts projecting blockbuster sales of more than $1 billion by 2025.[5] However, our model suggests donanemab will offer slightly lower clinical innovation than Leqembi or Aduhelm, owing to a poorer safety/adverse event profile and higher rates of ARIA.

Leqembi is currently trialing in subcutaneous form, as is donanemab.  More convenient dosing would improve the outlook for these agents, but they will still face the headwinds of modest efficacy and significant safety concerns, as well as burdensome monitoring/imaging requirements. With all these considerations, it is difficult to believe that Eisai will hit its revenue target of $8.8 billion by 2032.[6]

[1] Edited to note 3/8/24 New York Times article

[2] https://memory.ucsf.edu/lecanemab

[3] https://www.biopharmadive.com/news/eisai-leqembi-alzheimers-target-revenue-earnings/706668/, https://www.pharmalive.com/eisai-sees-dramatic-increase-in-leqembi-uptake-following-full-fda-approval/, https://www.reuters.com/business/healthcare-pharmaceuticals/eisai-expects-alzheimers-drug-rake-revenue-665-mln-by-march-2023-11-07/

[4] https://icer.org/wp-content/uploads/2023/04/ICER_Alzheimers-Disease_Final-Report_For-Publication_04172023.pdf

[5] https://www.investors.com/news/technology/eli-lilly-stock-why-version-alzheimers-treatment-could-become-a-blockbuster-in-2025/

[6] https://www.fiercepharma.com/pharma/eisai-dials-sales-ambitions-alzheimers-med-leqembi-amid-launch-growing-pains

Evrysdi: A Potential Game-Changer for SMA Type 1 Patients

Spinraza was the first effective treatment option for Spinal Muscular Atrophy (SMA) Type 1.  Zolgensma and Evrysdi are reshaping the market because of their superior efficacy.

SMA Type 1 is a rare, debilitating genetic disorder, affecting about 1 in 10,000 live births, with symptoms beginning before six months of age. Historically, infants born with this disorder could not sit without support.  Most were expected to live two years or less.

The FDA approval of Spinraza (nusinersen, Biogen) in 2016 finally offered hope to families. The ENDEAR trial of Spinraza had such positive results that it was terminated early to give all participants access to Spinraza in an open-label extension (SHINE). Since then, Zolgensma (onasemnogene abeparvovec, Novartis, approved 2019) and Evrysdi (risdiplam, Roche, approved 2020) have emerged as alternative treatment options.

Like Spinraza, Evrysdi is a chronic treatment. However, it offers several benefits over Spinraza. In infantile-onset, symptomatic SMA Type 1 patients less than two years old, Evrysdi has noticeably higher efficacy (event-free survival and motor milestone response). These gains reduce mortality and morbidity. Evrysdi is a daily oral therapy, more convenient than Spinraza’s intrathecal bolus route.

Evrysdi is dosed by kg/bodyweight, with an annual price cap not to exceed that of treating a 44 lb child, complicating any simple cost comparison. However, even at its maximum price, the annual cost of Evrysdi is less than that of maintenance Spinraza.

In the Equinox model, Evrysdi offers 15.1% clinical innovation versus Spinraza. Historically, drugs that have scored >10% clinical innovation have become market dominators, and so far, annual sales of Evrysdi have trended in this direction.

One way that Spinraza has an edge over Evrysdi is its quantity of supporting data, since Evrysdi has not been around as long to establish a track record.

Zolgensma is another promising treatment option for SMA type 1. Unlike Spinraza and Evrysdi, Zolgensma is a single-dose gene therapy. At approximately $2.25 million 2023 USD (WAC, Micromedex), its price tag has been criticized in the past. However, Novartis offers different payment plans, including outcome-based and over-time payment plans, both up to 5 years.

Spinraza and Evrysdi (at maximum dose) overtake that $2.25 million mark after about 5 and 6 years of treatment, respectively. However, this calculation ignores other direct costs (such as hospitalization) and the potential for additional therapies if the initial treatment is insufficient. This added cost is worth considering since recent data shows that 7.5 years after dosing, almost one-third of Zolgensma-treated patients had received follow-up treatment. Unlike Spinraza and Evrysdi, a patient cannot simply switch off of Zolgensma if it does not perform as expected. Discounts, negotiations, and payer willingness to sponsor an expensive one-time therapy like Zolgensma also complicate the picture.

In summary, in a head-to-head comparison against Spinraza, Evrysdi is the clear winner. This sets it up to become a future standard-of-care as data continue to accumulate. Zolgensma is also innovative over Spinraza. However, it will likely continue to face challenges as payers continue to negotiate the best way to finance an expensive one-time treatment where a cost-effective outcome cannot always be guaranteed.

Prospects for ulotaront in schizophrenia

Conclusion: Though ulotaront offers an improved safety/tolerability profile over the generic antipsychotic risperidone for patients with schizophrenia, its likely price would consign it to later-line use if approved.

Antipsychotics such as risperidone, olanzapine, and quetiapine provide efficacy for patients with schizophrenia, but come with substantial safety/tolerability baggage. However, Ulotaront (Sunovion), an antipsychotic in phase 3 clinical trials, may reduce unmet need by providing efficacy comparable to current therapies with fewer tolerability issues.

We modeled risperidone as the standard of care, as it gave the lowest unmet need score in our framework. Efficacy values on the Positive and Negative Syndrome Scale (PANSS) in our analysis are from short-term trials, but efficacy may differ in long-term settings and uncontrolled patient populations.

While ulotaront did not reduce PANSS scores as much as risperidone did, it had a lower discontinuation rate, giving it a slight edge over risperidone in efficacy. Ulotaront appears to provide acceptable efficacy with improved tolerability over the commonly used atypical antipsychotics.

However, we expect ulotaront’s cost will limit its share. We projected its annual wholesale acquisition cost (WAC) at about $17,000, equal to that of Lybalvi (olanzapine/samidorphan, Alkermes), a schizophrenia drug with a similar therapeutic profile that entered the US market in late 2021. Generic risperidone’s yearly cost is about $130. The assumed price diminishes ulotaront’s clinical innovation by -6.9%. The result is overall minimal clinical innovation of 1.8%. History shows that new drugs need to hit 5% clinical innovation to have good commercial prospects.

If we compare ulotaront with Lybalvi, ulotaront has 2.7% clinical innovation over Lybalvi, based on a slightly better side effect profile and marginally better efficacy.

We predict that ulotaront will occupy a niche similar to Lybalvi’s. Both drugs have efficacy like the second-generation antipsychotics, a high price penalty, and notably improved safety and tolerability. Generics will remain the top first-line choice owing to price. However, even with low clinical innovation compared to risperidone, we expect ulotaront and Lybalvi will be important for patients who fail or cannot tolerate generic antipsychotics.

Lybalvi’s team is already thinking about competing against generics, expecting that the frequent drug-switching (usually driven by adverse events) seen in schizophrenia will get their drug tested in many patients. Sunovion will likely adopt a similar strategy with ulotaront.

Download PDF of references used for model

Trikafta: A Major Step Forward for Cystic Fibrosis Patients

Cystic fibrosis (CF) affects more than 30,000 patients in the US. Recent treatments for CF focus on modulating the CFTR gene, with Vertex Pharmaceuticals’ Kalydeco (ivacaftor), Orkambi (lumacaftor/ivacaftor), and Symdeko (tezacaftor/ivacaftor) as the only approved therapies that provide more than symptomatic relief. Those agents, however, either are indicated for small segments of the CF population or offer modest clinical improvements as measured in Equinox Group’s model. 

Enter Vertex’s newest treatment, Trikafta (elexacaftor/tezacaftor/ivacaftor), approved in October 2019, which expands the number of CF patients who can benefit from CFTR modulators and offers significant improvement in clinical outcomes.  Trikafta has a broad label for all CF patients aged 12 years and older with at least one F508del mutation (approximately 85% of CF patients in the US carry a copy of the F508del mutation). Trikafta’s approval allows Vertex to treat both the underserved heterozygous F508del population and the homozygous F508del population, where both Orkambi and Symdeko are options.

Trikafta offers very high clinical innovation in patients with the heterozygous F508del mutation, delivering a 15% improvement over Pulmozyme (dornase alfa, Genentech) — with clear gains in efficacy, mortality, and morbidity:

For these heterozygous patients, Equinox’s Rare Disease Normative Price Calculator finds Trikafta to be reasonably priced at annual US WAC of $311,500, given its level of clinical benefit.

Equinox Group’s research and predictive model for pricing agents targeted to rare diseases has found that three factors drive pricing potential:

• Size of the patient population

• Level of disease seriousness (mortality and morbidity), and

• Clinical improvement as measured in the Equinox unmet need model

Trikafta’s published data in the homozygous population is not sufficient to allow Equinox to accurately characterize the clinical benefit for those patients, so we cannot comment on the appropriateness of its price in that population. 

In Q1 of 2020, Trikafta achieved $900 million in sales.  That substantial and rapid commercial success is attributable both to a much larger target population than Vertex’s older CF treatments and to its very high clinical innovation in the heterozygous F508del group. 

Radicava: Not Innovative Enough to Sustain Strong Start

Conclusion: Despite the early success of Radicava, the new ALS treatment provides little clinical innovation. After the buzz surrounding the first new drug for ALS treatment in 22 years passes, we expect patient share to decline. Radicava’s modest efficacy barely improves patient outcomes; our rare diseases model shows that it’s priced too high relative to its clinical benefit.

Strong Start

According to Mitsubishi Tanabe Pharma America, more than 3,500 ALS patients in the US have been treated with Radicava (edaravone), representing around 20% of ALS patients in the US. This patient share is likely driven by excitement from advocacy groups: following Radicava’s approval, ALS Association president and CEO Barbara Newhouse shared her organization’s hope that the approval “signals the beginning of a new chapter” in ALS treatment. Calaneet Balas, an executive VP for the organization, stated there was “a great amount of excitement” surrounding the drug’s approval and that she thinks the new agent “has brought true hope to [the ALS] community.” Disease burden in ALS in extremely high, and the heavy press coverage surrounding the approval propelled a strong first-year of sales: Radicava tallied $110 million in sales in the US alone in the drug’s first full year.

Skepticism

Despite the strong start, we don’t believe Radicava’s growth in the ALS market will be sustained. Radicava is an expensive addition (WAC=$137,400/yr) to riluzole and offers only small efficacy improvements compared to riluzole alone. That modest slowing of disease progression is offset by the inconvenience of near-daily IV infusions in two-week intervals and an absence of data on damage reversal and survival benefits. For Radicava’s price to match the clinical benefit vs. cost of other drugs in rare diseases, its WAC price should be about $55,000/yr.

In addition, although Radicava was approved for all ALS patients, it has only shown results in a small subset of patients who were recently diagnosed (within 2 years) and whose symptoms have rapidly progressed. It is estimated that only 7% of ALS patients meet these criteria, and the authors of the pivotal study state, “There is no indication that edaravone might be effective in a wider population of patients with ALS who do not meet the criteria.”

This limitation has not been lost on payers, with companies such as United Healthcare and Tufts Healthcare requiring patients to meet the trial inclusion criteria in order for their treatment costs to be covered. Lastly, while Radicava boasted strong initial sales figures, we don’t yet have data on rates of treatment discontinuation, which could be high given the modest efficacy, high cost, and inconvenience.

Many doctors share our skepticism. In Discussing edaravone with the ALS patient: an ethical framework from a U.S. perspective, Yeo & Simmons argue that physicians should see past the excitement from advocacy groups. In line with our analysis, these authors urge physicians to take the time to understand the costs and impact of administration demands on patients’ quality of life, and weigh them against the modest efficacy seen in trials.

Our prediction has already started to come true. Mitsubishi Tanabe expects Radicava sales to decline in 2019. In line with our analysis, Mitsubishi expects the inconvenience of frequent infusions to be a deterrent for patients, and the company is already trialing an oral suspension formulation of Radicava that would help justify its current price.

Hemlibra: A Strong Leader in Hemophilia A

Conclusion: The clear leader for hemophilia A patients with factor VIII (FVIII) inhibitors, Hemlibra (emicizumab, Roche) also brings competitive heft to the larger, more crowded, space of hemophilia A without inhibitors. Combining improved efficacy and convenience, Hemlibra offers significant clinical innovation over the current standard of care (SOC), Advate (Shire).

First approved in November 2017, Hemlibra is well positioned within the hemophilia A market. For patients with inhibitors, it wins in a landslide when compared to bypassing agents such as recombinant activated factor VII (NovoSeven®, Novo Nordisk). Among this small group, Hemlibra substantially reduces cost and administration frequency in addition to improving efficacy.

But how does Hemlibra look in the much larger (and more brand-loyal) population of patients without inhibitors, an indication Hemlibra won in October 2018?

Compared to Advate, the current SOC among patients without inhibitors, Hemlibra shows meaningful improvements in efficacy, tolerability, and convenience, leading to an 8.7% reduction in unmet medical need, as seen in the waterfall chart. While Advate requires at least three IV bolus administrations a week, Hemlibra can be given as a weekly subcutaneous injection with better outcomes in annualized bleeding rate and in the proportion of patients experiencing zero bleeds per year. 

So far, Hemlibra sales have backed analysts’ high expectations. Hemlibra brought in $224 million in 2018 revenue and looks to claim an even larger market share in hemophilia A patients, both with and without FVIII inhibitors, moving forward.

Our analysis combined clinical trial data from both Hemlibra and Advate prescribing information labels as well as the HAVEN 3 study.

Oral semaglutide: A game changer in type 2 diabetes

Conclusion: Oral semaglutide’s clinical improvement over Januvia (sitagliptin, Merck) is 17 percent – a historically high level of innovation. In type 2 diabetes, nearly every new entrant over the last 20 years has offered an improvement in the low single digits or less. 

At this writing, oral semaglutide (from Novo Nordisk) is expected to win approval by the end of 2019. Our analysis compares it to Januvia (with metformin in the background).  The waterfall chart shows that oral semaglutide reduces unmet medical need in type2 diabetes by over 17 percent, compared to Januvia. 

Efficacy drives oral semaglutide’s improvement, reflecting superior glycemic control and reduction in CV events. The efficacy advantages ripple through to mortality and morbidity, conferring still more clinical benefit.  Oral semaglutide has a modest disadvantage in safety/tolerability and slightly higher cost relative to Januvia (we assume the oral form will cost the same annually as the subcutaneous Ozempic).  The net benefit is impressive and will be diminished only marginally when generic sitagliptin reaches market.

The clinical data used in this analysis for Januvia comes from its package insert, and for oral semaglutide, most of the information comes from its phase 3 clinical trials: PIONEER 1, PIONEER 2 and PIONEER 3. 

Tymlos: A new force in the osteoporosis market

Conclusion: In postmenopausal osteoporosis patients at high risk of fracture, Tymlos offers improved efficacy at a much lower price than Forteo. We expect Tymlos to slowly but significantly cut into Forteo’s share.

Tymlos to Overtake Forteo in PTH-treated Market Segment

Direct competitors, Tymlos (abaloparatide, Radius) and Forteo (teriparatide, Lilly) are both anabolic agents, delivered subcutaneously, and indicated for postmenopausal women at high risk of fracture.* In a study comparing both agents to placebo (ACTIVE trial), Tymlos outperformed Forteo on almost every endpoint, including percent reduction in patients with vertebral and non-vertebral fractures and increased bone mineral density at various bone sites. At less than half the price of Forteo (WAC = $17,000 versus $40,000 /yr), Tymlos is well-positioned to cut deeply into Forteo’s market share. Since osteoporosis patients are unlikely to switch medications, we expect Tymlos will rely on capturing newly diagnosed patients. So far, Tymlos has been successful in this approach: Radius claims that Tymlos captured 40% of new anabolic patient starts in December 2018. The impact Tymlos will have on Forteo’s market share is already emerging. After years of constant growth, Forteo’s revenue decreased steadily throughout 2018.

Evolution of the Osteoporosis Market

The osteoporosis market continues to become stratified into lines of therapy. Payers will likely require all newly diagnosed patients (except those with very high fracture risk) to try a generic bisphosphonate first. Next, a patient will likely be directed towards Prolia (denosumab, Amgen) due to its moderate efficacy, better convenience, and lower cost compared with the anabolic agents (Prolia costs $2,400 per year and is administered subcutaneously every 6 months). Patients failing Prolia would then try Tymlos or Forteo.

On the Horizon

Amgen and UCB’s drug Evenity (romosozumab) will soon win approval and will directly compete with Tymlos and Forteo in the high-risk population. Evenity looks inferior to Tymlos in our model because its advantages in side effects and convenience don’t make up for its poorer efficacy. However, with its efficacy on par with Forteo and with better convenience, Evenity should further erode Forteo’s patient share and challenge Tymlos if priced similarly.

*Advanced age, frailty, glucocorticoid use, very low T scores, and increased fall risk are indicators of higher fracture risk in osteoporosis patients.

Xeljanz: Is ulcerative colitis finally the place for JAKs to shine?

When the first JAK (janus kinase) inhibitor, Xeljanz (tofacitinib, Pfizer), was approved for rheumatoid arthritis (RA) in 2012, many thought it would quickly eat up a large piece of the market.  Sales since then, however, have been disappointing.  Some believe this has to do with its initial failure to get approved in Europe, while others believe that there were lingering safety issues that were not recognized in the label. Regardless, sales have continued to climb.

Six months ago, Xeljanz hit the ulcerative colitis (UC) scene –the first JAK to do so. Compared to the current standard of care, Entyvio (vedolizumab, Takeda), Xeljanz shows significant improvement in ­­­both efficacy and convenience, demonstrating that having an oral route of administration could be a game-changer in the world of ulcerative colitis.

Now that Xeljanz has an EMA approval in RA (as of March 2017) and more long-term safety data has been released, we expect it to quickly eat up a corner of the UC market. With four other JAKs in late development, this class could pose a serious threat to anyone else hoping to compete in ulcerative colitis.