Krystexxa shows signs of life as Horizon keeps pushing sales force expansion

Repositioning the gout drug Krystexxa was getting results, so Horizon has been amping up its marketing by expanding its sales force considerably.

Back in May, Horizon Pharma unveiled plans to throw more commercial heft behind gout med Krystexxa, a product that’s had a long and difficult journey. And that’s because the company liked what it saw after a recent marketing tweak.

The Illinois drugmaker had found early success in repositioning the med as a treatment for refractory gout, a subset comprising 50,000 to 60,000 U.S. patients, execs recently told Jefferies analyst David Steinberg. As he wrote in a note to clients, they noted “both improved reception by the medical community and payers” after “reframing the product’s safety profile and proper utilization of the drug.”

The result? Forty percent to 50% growth in patients over the past year, Steinberg noted—enough to convince Horizon that Krystexxa could shine with more backup from sales. As part of its first-quarter earnings announcement, the company laid out plans to bulk up its sales organization from more than 100 staffers to nearly 200—and it raised its peak net sales estimate for the drug to more than $400 million, up from more than $250 million.

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Krystexxa is already far ahead of where it had been when Horizon agreed to acquire owner Crealta—which had snatched the med from bankrupt developer Savient—in December 2015 and started shifting Krystexxa toward patients with more severe and treatment-resistant gout. Savient had gone after the general gout population of 3 million and failed to gain traction.

Horizon had originally used a 40-person rheumatology sales force to hawk Krystexxa alongside its corticosteroid Rayos, but as its sales ranks have swelled, so has revenue: In this year’s second quarter, the med raked in $38.3 million, a 93% leap over the second quarter of 2016’s haul of $19.9 million.

But the way management sees it, there’s still a long way to go. Only about 2,000 of those 50,000 and 60,000 eligible U.S. patients are currently receiving the treatment, which execs say spells a “significant opportunity,” Steinberg wrote.

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And in the meantime, Horizon execs are celebrating the delayed implementation of changes to Medicaid 340B, a program shift that would cost the company a one-time step-down that would wipe out about a quarter of Krystexxa sales, with certain hospitals reimbursing at just one cent per vial.

Thanks to a recent decision from the U.S. Department of Health and Human Services to postpone implementing the program until next July, “management remains ‘hopeful’ that the rules governing this program will be less draconian if reworked,” Steinberg noted.