- During a second quarter call with analysts, Novartis highlighted its manufacturing capabilities, specifically for its closely watched CAR-T therapy, that is nearing the market.
- On the heels of a positive advisory committee meeting vote for CTL019 last week, CEO Jim Jimenez noted the uptick in projects moving from research to development and a streamlining of the manufacturing process.
- The company restructured several business units in August 2016, most notably integrating its Cell & Gene Therapy unit back into the larger organization, as well as making its oncology unit a standalone division.
"By integrating drug development, for example, we have improved the transition from early research to clinical development. And as a result, we have seen the number of projects moving from research to development double in the past year," said CEO Joe Jimenez on the second quarter call. "We have been able to reduce our costs by streamlining processes and in manufacturing we are improving resource allocation and reducing our external spend, which is contributing to an overall improvement in gross margin."
The Novartis restructuring is part of an industry-wide trend to consolidate amongst big pharmas. While many of the companies once grew their businesses through massive acquisitions that added redundancies in just about every area, recent efforts have been to streamline once again. A decade ago, most big pharmas were relying on blockbuster primary care drugs like statins to bring in revenues, but the business model has changed dramatically and now these companies rely on drugs with more targeted patient populations and higher price tags.
Novartis' CAR-T therapy is a prime example of a targeted drug that is only meant for a small population. There are about 5,000 cases of B-cell acute lymphoblastic leukemia (ALL) in the U.S. each year, with about 15% of those patients relapsing. Novartis is hoping to gain approval for treatment of relapsed or refractory pediatric and young adult patients with B-cell ALL.
The company's global head of drug development, Vas Narasimhan, highlighted during Novartis' second quarter call the strong efficacy of the drug, as well as the safety. He also touched upon the importance of the manufacturing process for CTL019.
"And finally, that our Novartis manufacturing process is robust with its ability to use cryopreservation and with our goal to get from clinic to [plant and back to] clinic in a time of 22 days," said Narasimhan.
"One of the interesting things that happened in the panel was a patient story was brought up in which it was clear that cryopreservation is what allows the patient to be treated given the need for chemotherapy to assess whether or not transplant would be possible. I think it nicely highlighted why cryopreservation gives physicians flexibility, give patients flexibility and give our manufacturing footprint flexibility in order to have the global scale needed to provide this therapy to thousands of patient," he added.
Being a new class of therapeutics, CAR-T offers an interesting pricing proposition. Th company wouldn't reveal its plans for pricing the drug should it be approved, but the CEO of its Oncology unit Bruno Strigini told investors that conversations with payers are well underway and the company is highlighting the high cost of the manufacturing process.
"So we are looking at a number of options, including health economic models and also outcomes models that consider the significant value CTL019 brings to patients, its scientific innovation and the high cost of manufacturing," said Strigini on the call.
"In terms of Access, our team has started to provide appropriate information to payer describing the patient population unmet needs, limited treatment options for eligible patients and manufacturing process. We believe that like for and Allogenic transplant, Access coverage will be determined on a patient-by-patient basis and payers are used to take rapid decisions for these types of patients," he added.