- The U.K. agency responsible for evaluating the cost-effectiveness of drugs has advised against using Biogen's Spinraza to treat a rare disorder known as spinal muscular atrophy (SMA).
- Spinraza received U.S. approval for SMA in December 2016 and European approval six months later. Biogen set the drug's list price at $125,000 per vial, or $750,000 for the first year of treatment — a price tag that has proven troublesome for the National Institute for Health and Care Excellence (NICE).
- While noting Spinraza's efficacy in the clinic, the U.K. agency concluded it wasn't a cost-effective use of National Health Service resources. That guidance isn't finalized, however, and may change as the appraisal process continues. What's more, analysts expect ex-U.S. sales of the drug will continue to grow regardless of NICE's recommendation.
Despite having only been on the market for roughly 18 months, Spinraza (nusinersen) is en route to becoming Biogen's next blockbuster. The drug raked in $787 million during the first six months of 2018, split about 50-50 between U.S. and rest-of-world sales.
Franchise growth was especially noteworthy outside the U.S., where Biogen recorded just $9.1 million during the first half of 2017. The big biotech now records Spinraza revenue in more than 25 international markets, and detailed on its most recent earnings call how 75% of ex-U.S. Spinraza sales come from just seven: Australia, Brazil, Germany, Italy, Japan, Spain and Turkey.
"We continue to believe that the international opportunity for Spinraza is even greater than in the U.S. as we continued the momentum of new country launches, and we believe there is significant ex-U.S. opportunity, not just in Europe but also in Asia-Pacific and Latin American markets," Jeffrey Capello, Biogen's chief financial officer, said on the July 24 call.
Yet the company and analysts don't seem to be banking much of that opportunity on the U.K.
Investment bank Evercore ISI, for instance, expects NICE to ultimately limit Spinraza reimbursement to those patients with an early onset and severe form of SMA classified as Type 1. While that type is the disease's most common form, it also carries a very low median life expectancy. NICE and the SMA Trust estimate there are only 25 children with Type 1 SMA alive in the U.K. at a given time.
The NICE recommendation isn't solidified. There's still a consultation period, as well as a second appraisal committee meeting scheduled for Oct. 23. But after weighing patient needs with clinical efficacy and the drug's "most plausible cost-effectiveness estimates," which range from £400,000 to £600,000 per quality-adjusted life year, the agency's decision makes it seem unlikely that Spinraza will receive broad reimbursement.
"Even taking these factors into account, and considering the proposed commercial arrangement; the cost of nusinersen is too high for it to be considered a cost-effective use of NHS resources," NICE said in its appraisal. "Because of this, nusinersen is not recommended."
Nevertheless, Biogen remains bullish on its ex-U.S. prospects. The company has filed for regulatory approval in seven more countries this year, and plans to file in as many as four more by year's end.
Evercore predicts peak ex-U.S. sales of $1.35 billion for Spinraza and notes the drug is well on its way to reaching that.
"[W]e feel reasonably comfortable thinking that Spinraza ex-US can grow from an already strong base to meet expectations ... especially considering new countries like Switzerland will also be coming online," analyst Umer Raffat wrote in an investor note previewing NICE's first committee meeting assessing Spinraza reimbursement.