Dive Brief:
- The Food and Drug Administration on Wednesday approved UltraGenyx Pharmaceutical Inc.'s rare disease drug Mepsevii, awarding the company a coveted Rare Pediatric Disease Priority Review Voucher in the process.
- A first commercial product for the decade-old biotech, Mepsevii is indicated to treat an inherited metabolic condition called mucopolysaccharidosis type VII (MPS VII), which more commonly known as Sly syndrome.
- UltraGenyx said on a Nov. 15 conference call that it intends to price the drug at about $375,000 per year, below the $500,000 or so that most analysts expected.
Dive Insight:
Sly syndrome is a rare lysosomal storage disease that only affects about 150 people worldwide, meaning sales for this drug are always going to be limited. Prior to UltraGenyx announcing its pricing strategy, analysts were anticipating about $200 million in sales for this drug — that's likely to be slightly lower.
It also is a smart pricing strategy in light of the current environment, where payers are now also pushing back against rare disease drug developers, as well as higher priced medications for larger patient populations.
Yet, even with the small patient population, this is a major step forward for the company. It marks their transformation from a clinical stage company to a commercial organization, allowing it to build a small sales force ahead of approvals for some of the other rare disease drugs it has in its pipeline.
Potentially the biggest win for UltraGenyx is that it also received a Priority Review Voucher (PRV) as part of the approval. These vouchers, which shorten review time for a drug, are given as an incentive by the FDA to boost drug development for rare pediatric and tropical diseases.
What makes PRVs so special is that they can be used with any drug (not just those that treat rare pediatric or tropical diseases), and that they can be bought and sold. The small biotech might be able to monetize the voucher and bring in as much as Mepsevii (vestronidase alfa) sales could bring in during a year.
Other companies have paid hefty sums to pick up PRVs and some companies even stockpile these vouchers to use when needed. These vouchers can help companies gain a competitive edge — allowing them to jump ahead of competitors in areas of high competition.
Most recently, Gilead Sciences Inc. paid $125 million to Sarepta Therapeutics for its PRV. Perhaps more famously, Regeneron and Sanofi SA picked up a PRV from BioMarin for $67.5 million that they used to push their PCSK9 inhibitor Praluent (alirocumab) ahead of Amgen Inc's Repatha (evolocumab).
On another occasion, Sanofi paid $245 million to Retrophin to gain a PRV that it used to bring its diabetes drug Soliqua (insulin galrgine/lixisenitide) to market. And in one of the highest priced purchases of a PRV, in 2015 AbbVie Inc. paid $350 million to United Therapeutics for its voucher.
Looking at purchase prices over time, however, suggests that PRVs might not fetch as much as they once did, possibly limiting UltraGenyx's upside.