- Jazz Pharmaceuticals continues to grapple with manufacturing complications that have crimped the supply and sales of its blood cancer drug, Erwinaze.
- Though second quarter Erwinaze revenue rose 20% year over year, Jazz leadership noted inventory is "extremely limited" due to issues at the drug's single-source provider, Porton Biopharma Limited. In March 2016, the Food and Drug Administration hit PBL with a Form 483 detailing significant violations in the way the company was manufacturing finished pharmaceuticals and active pharmaceutical ingredients.
- Since then, PBL has received a warning letter, another Form 483 and ruffled feathers with U.K. regulators. While the production problems have made Erwinaze vulnerable to supply disruptions, Jazz reiterated guidance this month that net 2018 sales of the drug will be between $190 million to $220 million.
The violations at PBL are affecting more than just the production of Erwinaze (asparaginase Erwinia chrysanthemi). On a recent earnings call, Jazz executives said the precarious inventory position is weighing on commercialization too.
"Knowing we've not had sufficient product supply to meet all demand, we have chosen to reduce our promotional efforts around that," CEO Bruce Cozadd said on the call. "So we don't want to go out and create demand, particularly in new patient populations, that we then can't satisfy."
Jazz also explained that educational activities — especially those concerning Erwinaze's efficacy in adolescents and young adults — have been gummed up.
"We'd like to be getting that story out more," Cozadd said.
The concern is understandable, given Erwinaze is Jazz's second biggest brand, behind the narcolepsy and cataplexy drug Xyrem (sodium oxybate). Jazz is walking a fine line as well, since it licenses the drug from PBL. That agreement expires in December 2020, though it could be lengthened through five-year extensions provided that neither company terminates the deal by December 2018.
"We cannot predict whether the term of the agreement will be extended or, if extended, the terms of any such extension. If the agreement is terminated, we will lose our license to sell Erwinaze in any market after December 2020, except under specified terms for a post-termination transition period," Jazz wrote in its most recent quarterly filing with the Securities and Exchange Commission.
The manufacturing problems holding down Erwinaze, along with generic competition threatening Xyrem, could be weighing on investor optimism. Shares of the biotech fell 3.7% following its second quarter earnings report despite almost 27% year-over-year revenue growth.