Anytime a drugmaker launches a new product--especially a highly touted potential blockbuster--it risks disappointment. The list of drugs introduced with a bang only to see sales whimper is long and disheartening. GlaxoSmithKline's ($GSK) weight-loss drug Alli, Pfizer's ($PFE) Exubera, Bristol-Myers Squibb's ($BMY) Onglyza, Eli Lilly's ($LLY) Effient, Sanofi's ($SNY) Multaq...and so on.
Some disappointments are certainly worse than others--you can't get much worse than Exubera, for instance--but failing to meet expectations is no fun in any case. And lately, we've seen a rash of failure-to-live-up-to-the-hype launches, including Dendreon's ($DNDN) prostate cancer treatment Provenge and Savient Pharmaceuticals' ($SVNT) gout drug Krystexxa.
And then there's Benlysta, the lupus treatment from Human Genome Sciences ($HGSI) and GSK. HGS's shares have dropped by almost half since the drug launched with great fanfare in March, Bloomberg notes. The excitement wasn't unwarranted: Benlysta was the first new lupus treatment in 50 years. But the doctor-administered drug costs $35,000 a year. Healthcare providers have to buy it up front and wait for reimbursement. That payment issue can slow adoption, CFO David Southwell said earlier this month.
And Benlysta faces another setback. The U.K.'s cost-effectiveness watchdog has determined it's not "good value for money," because the cost for a year of better health is too high. That's in spite of a patient access scheme--aka, discount plan--proposed by GSK (the terms weren't disclosed). The National Institute for Health and Clinical Excellence also said it would like to see Benlysta treatment compared with Rituxan, which isn't approved for the indication, because it's often used off-label in lupus patients.
That's the sort of obstacle that can crop up even for highly anticipated drugs--the sort that drag down a launch. And then there's the ever-present safety worry; just look at Multaq, which is now sputtering because of unfavorable data from a recent study. Reimbursement issues, too. So, investors are getting more cautious because they "fear the risks of commercial disappointment," RBC Capital's Michael Yee told Bloomberg.