If you’re curious about the pitfalls of CAR-T drug commercialization, look no further than Bristol Myers Squibb’s Abecma partner 2seventy bio.
After reporting a sizable revenue decline for the companies’ multiple myeloma cell therapy in 2023’s third quarter, 2seventy stands out as a prime example of the dangers of scaling up a process before suffering lower-than-expected demand, one group of analysts contends.
As reported by BMS earlier this month, third-quarter Abecma sales in the U.S. clocked in at $69 million, which marks a 40% decline over the amount BMS collected in the second quarter. 2seventy attributed the drop to “increased competition” from Johnson & Johnson and Legend’s rival BCMA-targeted CAR-T Carvykti.
What’s more, 2seventy expects competition will continue to take a chunk out of Abecma’s sales potential in the fourth quarter, and the company no longer expects to achieve its original 2023 sales guidance range of $470 million to $570 million for the drug.
On a quest to “restore growth in Abecma,” BMS and 2seventy said they’re focused on rapidly expanding the CAR-T’s treatment site footprint as well as “competitively differentiating” the med’s real-world data and safety profiles.
Overall, 2seventy’s third-quarter revenue decline of 67% eclipsed the quarter-over-quarter decline in Abecma of 40%, analysts at Leerink Partners wrote in a recent note to clients. The loss demonstrates the “pitfalls of scaling up a process and then experiencing lower-than-anticipated demand,” the analysts said.
BMs and 2seventy share a 50/50 profit split on Abecma. The smaller decline in sales is booked by BMS, while profit share booked as revenue for 2seventy suffered a bigger rate of loss.
As for Abecma’s future, once the med potentially moves into earlier-line therapy, there will be a temporary sales inflection before Carvykti again scoops up the majority of market share, forcing another Abecma slowdown, the analysts figure.
2seventy and BMS would have to “sustain growth for multiple quarters to change this perception,” the Leerink team added.
Based on 2seventy’s Abecma earnings split with BMS, U.S. gross profitably for the cell therapy hit a scant $1.17 million in the third quarter.
According to Leerink, this implies a cost of goods sold per Abecma dose of $361,000 versus $210,000 per dose in the second quarter. The final cost of goods sold for CAR-T products largely comes down to overhead and equipment utilization rates at manufacturing sites, the analysts explained.
“When product sales, and thus manufacturing volume, fall short of the scale for which a process is designed, CoGS can increase exponentially,” the Leerink team said, adding that commercial site expansion could have exacerbated the loss in the third quarter.
For comparison, J&J’s Chinese partner Legend announced that Carvykti had generated approximately $152 million in sales for the third quarter.