Novartis flexes CV marketing muscles against PCSK9 rivals with MedCo deal

Narasimhan
Novartis could leverage its Entresto salesforce and cardiovascular marketing experience to help with inclisiran launch against fellow anti-PCSK9 cholesterol drug, but hurdles such as reimbursement remain. (Novartis)

Watch out, Amgen, Sanofi and Regeneron. Thanks to Novartis' $9.7 billion Medicines Company buyout pact, PCSK9 competition is about to get a lot more intense. But while the Swiss drugmaker will enter the scene armed with a marketing sensibility that MedCo lacked, the question remains: Can Novartis make its heart prospect work where its two rivals have failed?

The centerpiece of the buyout is inclisiran, which lowers bad cholesterol by targeting the RNA that makes the PCSK9 protein. With successful phase 3 data, the drug is poised to go up against existing antibodies, Amgen’s Repatha and Regeneron and Sanofi’s Praluent.

RELATED: Novartis strikes $9.7B takeover of The Medicines Company

To hear Novartis CEO Vas Narasimhan tell it, the Swiss pharma could leverage its existing cardiovascular sales capabilities under fast-growing heart failure drug Entresto, as well as inclisiran’s winning clinical profile, to ensure a success.

On a Monday conference call, Narasimhan went to great lengths to tout how Novartis’ 50 year-plus experience in cardiovascular disease makes it a great marketer for inclisiran. “We will leverage Novartis’ deep operational expertise in primary care, medical education and market access, and we can also over time leverage the broader Novartis pipeline,” he pointed out.

The company recently successfully launched new combo drug Entresto, whose sales grew 60% to hit $430 million in the third quarter. And it also has a strong CV presence thanks to its valsartan franchise, including Diovan and Exforge, which are still racking up blockbuster sales.

Despite different indications, Entresto physicians cover about 80% of prescribers of statins or existing PCSK9s in the U.S., Narasimhan noted. “We believe with an incremental few hundred reps we can support the launch of inclisiran, including a specialized force to enable Part B utilization with the relevant health centers and providers,” he said. As for outside of the U.S., Novartis thinks it can cover about 90% of the doctors it wants to with the existing Entresto field team.

That's not great news for its future competitors, which both suffered slow launches despite great interest from the beginning because of their LDL cholesterol-lowering abilities—especially since Narasimhan says Novartis can learn from their mistakes.

When Repatha and Praluent first reached the market in 2015, payers—convinced the drugs weren't cost-effective—put up significant reimbursement hurdles that led to an estimated 80% of claims being initially rejected. As a result, up to 50% of patients abandoned the drugs due to high out-of-pocket costs, Narasimhan noted Monday.

RELATED: Amgen escalates PCSK9 pricing war with permanent 60% price cut on Repatha

Amgen and Regeneron/Sanofi caved to a demand from drug cost watchdog the Institute for Clinical and Economic Review to lower the drugs’ net prices last year, and only recently cut their list prices by 60% after lackluster launches.

In what would be a “compelling offering,” Novartis would aim to price inclisiran “within the approximate cost-effective range that has been put out in the past,” Narasimhan told investors.

“We believe a medicine like this one where there is compelling health economics, high interest that we’ve already seen from [health technology assessment] authorities outside the United States, we could manage the window not to have the issue that perhaps other medicines might have in the pricing,” he added.

Inclisiran comes as a physician-administered under-the-skin injection given every six months after an initial two doses, while patients self-administer Repatha and Praluent every two weeks or once monthly.

Up to 26 injections per year under cold chain requirements would be an inconvenience that inclisiran could remove for physicians, Narasimhan reasoned, as two injections annually could integrate well with routine doctor’s visits, leading to less patient abandonment.

That schedule could also increase payer confidence, with them “knowing physicians will ensure better patient compliance and then allow the system to get the benefits of lower LDL and lower subsequent events,” he said.

RELATED: Lackluster Amgen, Sanofi PCSK9 drugs could be under major threat from a new rival: analyst

Nevertheless, at least three groups of analysts see fundamental hurdles ahead, including pricing, reimbursement and market penetration.

Even before the messy launch of Repatha and Praluent, “we felt the commercial case—injectable drugs for a ‘silent’ disease, entering a highly-genericized category—would be challenging, and this is how it has played out,” Wolfe Research analyst Tim Anderson wrote in a Monday note.

As Jefferies analyst Biren Amin sees it, “a twice-yearly administered product will not fix these fundamental issues (compliance and reimbursement).” Granted Novartis is no stranger to CV disease, “but there will likely be heavy lifting involved to drive a successful launch,” he wrote in his own investor note Sunday.

That observation was similar to one from Evercore ISI analyst Umer Raffat, who labeled the deal “a major execution story.”

By Raffat’s calculation, MedCo’s purchase price roughly translates into $2.2 billion in peak sales for inclisiran. The current annualized sales for the two PCSK9 antibodies combined? Just $1 billion. In the third quarter, Repatha delivered $168 million to Amgen’s top line, up 40%. Praluent sales dropped 12% year over year to just €61 million ($67 million) due to higher rebates and an unfavorable patent ruling in the U.S.

Another key obstacle to inclisiran’s early success would be the lack of CV outcomes data, Wolfe’s Anderson noted. The Medicines Company is already running a phase 3 trial dubbed Orion-4 for that information, although readouts are only expected in 2024.

“In the absence of having outcomes data in hand, payers will have a reason to push back if they want to,” Anderson figured, “and in the (low probability) event that trial results end up being negative, inclisiran would essentially be dead in the water.”

Evercore ISI’s Raffat also pointed to two other potential risks. First, how payers respond to higher rebates on other PCSK9s. Second, as Repatha remains a top priority for Amgen, the company might lower its net price further, with Regeneron/Sanofi likely following suit.

Overall, he views the “onus” to now be on Novartis management to deliver the sales numbers.

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