- More than 20 commercial insurance plans have coverage policies now in place for Novartis' gene therapy Zolgensma, which was launched in the U.S. in late May and priced at a record $2.1 million per patient.
- Company executives, however, declined to specify how many patients have been treated commercially to date, and held off on giving sales guidance for the one-time treatment. How Zolgensma performs is a key focus for investors in Novartis, which last year paid $8.7 billion to acquire the therapy's developer, AveXis.
- Although there are signs of some early pushback from insurers on Zolgensma's label in spinal muscular atrophy, Novartis said nearly all patients using its support program OneGene have received approval for the therapy's use via policy or by medical exceptions.
Strong performance in the second quarter spurred Novartis to raise its sales and profit forecasts for the year, sending shares in the drugmaker to near five-year highs on Thursday.
Company executives, though, fielded just as many questions from Wall Street analysts on Zolgensma (onasemnogene abeparvovec) as they did on the rest of the Swiss pharma's business. Such interest is reflective of the gene therapy's importance to CEO Vas Narasimhan's push into complex medicines, as well as its status as the world's most expensive drug.
Details given by Novartis on Thursday suggest positive progress, although it is still early in Zolgensma's launch and more definitive judgments will need to wait until release of third quarter earnings, when Novartis indicated it would first offer sales results.
Roughly 40% of commercial patients with spinal muscular atrophy who are eligible for Zolgensma are represented by the 20 insurance plans which now have policies in place. Additionally, four Medicaid plans have policies on coverage, Novartis said.
Still, some policies are more conservative than the label approved by the Food and Drug Administration, with criteria on combination use with Biogen's Spinraza (nusinersen) one of the more common restrictions. Several plans, including Anthem's and those of two Blue Cross Blue Shield affiliates, set out limitations on the maximum age at treatment.
The first U.S. patient to receive Zolgensma commercially was treated on June 7, about two weeks after the drug's approval, and Novartis has confirmed multiple patients have now been treated.
"In some instances, we've even had patients approved for therapy from the time of receiving the prescription within 24 hours," said Novartis' Narasimhan, who noted on a Thursday conference call that he is personally involved in many elements of the launch.
For patients covered by plans without a policy in place, Novartis said coverage is usually granted through medical exceptions.
One component of Zolgensma's launch yet to fall into place, however, is an installment plan proposed by Novartis to spread out the $2.1 million cost for the therapy over five years.
While 17 plans have signed letters of intent on contracting terms, none are yet using the annuity model to pay for Zolgensma. Paying over time is seen as a critical component to commercializing gene therapy, but current regulations make such arrangements difficult.
"To date, because it is very early days, we don't have any plans currently using these kinds of models," said Narasimhan. "But we continue to work with plans in terms of contracting."
Investors impatient for more details on Zolgensma, however, can take solace in the strengthening performance of Novartis' business overall.
Net sales increased by 8% year over year, driven by drugs like Costenyx (secukinumab), Entresto (sacubitril/valsartan) and, increasingly, Lutathera (lutetium Lu 177 dotatate). Core operating profits, meanwhile, rose by 20%.
As a result, Novartis increased its sales forecast and now expects mid- to high-single-digit growth for 2019, which would put it among the top performing pharmas.
Those upgrades come despite Novartis setting aside $700 million for a potential agreement to settle allegations of illegal kickbacks given to doctors as part of a speaker program run between 2002 and 2011.
Shares in Novartis were trading up on U.S. markets by nearly 4% at mid-day.