Novartis’ Zolgensma launch has been anything but boring: First a record-setting price tag, then a data-manipulation scandal and, with Tuesday earnings, a Street-beating first quarter on the market.
And now, on top of all that, Novartis is facing “manufacturing questions” that will delay Zolgensma’s approval in the EU and Japan.
During a third-quarter earnings call Tuesday, Novartis CEO Vas Narasimhan said regulators in those two markets submitted written questions and requested additional inspections before they would consider approving Zolgensma to treat infant spinal muscular dystrophy (SMA).
The requests were not tied to Novartis’ recent data-manipulation scandal, Narasimhan said. The company disclosed that employees in its AveXis unit had fudged data later submitted to FDA regulators in the drug's approval filing.
“The written questions have not related specifically to any of the data topics,” Narasimhan said. “They were primarily related to the manufacturing issues, as well as interest in doing additional inspections of our various manufacturing facilities.”
Novartis spokesman Eric Althoff said an inspection of Zolgensma’s manufacturing facility is scheduled for December and a decision from the EU’s Committee for Medicinal Products for Human Use (CHMP opinion) expected in the first quarter of 2020. Novartis is also expecting a Sakigake decision in Japan in the first half of next year.
Althoff didn’t specify which issues the countries’ regulators had flagged in their follow-up requests but said in an email that “questions have been mostly on manufacturing and CMC (chemistry, manufacturing and controls).”
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The delayed rollout in the EU and Japan shadowed Zolgensma’s $160 million third quarter—its first full period on the market in the U.S. The Street-beating numbers come even as some physicians have given the therapy a tepid reception.
JPMorgan analysts surveyed 26 physicians who treat SMA and found that concerns about the gene therapy's efficacy are holding back prescriptions. That means the product could struggle to bring in more than $1 billion in “sustainable revenues,” the analysts said in a note to clients.
The physicians responding to JPMorgan’s survey were unfazed by the ongoing data scandal but said they would use the gene therapy in just 56% of newborn Type 1 SMA patients and 42% of those with Type 2 SMA. That’s too small a proportion of SMA patients for Zolgensma to meet billion-dollar expectations, JPMorgan said.
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While that unfolds, Novartis has been forced to deal with internal problems after two AveXis executives allegedly ordered and then covered up fudged numbers in Zolgensma’s regulatory filing.
Late last month, Novartis announced it would fold AveXis’ quality team into its larger organization immediately. The move followed Novartis veteran Page Bouchard’s elevation to senior vice president of research and chief scientific officer at AveXis after former chief scientific officer and company founder Brian Kaspar and his brother Allan Kaspar were fired for allegedly spearheading the scandal. Brian Kasper has denied the allegations through an attorney.
Additionally, Novartis will have the AveXis head of quality assurance (QA) compliance sit on an extended Novartis QA Compliance extended leadership team. The drugmaker says it also has created a “Speak Up” whistleblower-type program to encourage employees to bring issues like this forward.