A few caution flags up, but Horizon's Tepezza is set to resume its blockbuster track: analyst

Just when it seemed like Horizon’s Tepezza was in the fast lane to blockbuster sales, the thyroid eye disease medication ran into a one-two punch of pandemic setbacks.

One roundhouse came with the closure of 77% of ophthalmologist offices nationwide. Then another landed last December with the United States drafting Horizon’s manufacturing partner Catalent into COVID-19 vaccine service through the Defense Production Act.  

Now, six months later, Tepezza has rebounded impressively, Jefferies analysts wrote on Monday, citing a call with a high-volume oculoplastic surgeon and a key opinion leader in the field. Following the drug's launch in February 2020, the analysts see Tepezza resuming its pre-pandemic momentum.

Nearly all of the doctor’s patients have resumed therapy since the supply disruption, “but the time to restart has been variable,” Jefferies analysts wrote. “The key opinion leader has witnessed little to no regression in TED symptoms despite protracted delay between infusions.” 

Of the 55 to 60 prescriptions the doctor has written for Tepezza so far, 43 patients have been infused, the analysts wrote. Seven to 10 are queued up for infusion and four have been denied insurance.

The drug, which carries a price tag of $14,900 per vial, registered sales of more than $800 million last year, with double-digit growth in the fourth quarter despite pandemic disruptions.

But Horizon and patients felt the effects of the supply disruption particularly during first quarter of this year, when sales plummeted to $2.1 million. Catalent resumed production in April after the FDA authorized Horizon to manufacture more vials per batch.

Early this month at the Jefferies Healthcare Conference, Horizon management noted that 75% of disrupted patients had either restarted or were scheduled to resume treatment versus a 50% figure from the previous month. 

RELATED: Horizon’s Tepezza supply dwindles as manufacturer Catalent pivots to Warp Speed vaccines

Additionally, patient enrollment in April was the strongest month for Tepezza since its launch, management said.

Another reason for the rapid rebound, according to the expert cited by Jefferies, is increased awareness of Tepezza in the medical community, as well as a highly effective ad campaign.

The expert noted an “amazing amount of public interest,” in the under-recognized disease, the analysts wrote. And the source reported an “increasing call volume from other physicians—particularly endocrinologists and community doctors—seeking advice on treating TED patients with Tepezza."

Despite the enthusiasm, the expert raised some caution flags because of side effects, at least one of which has impacted 80% of his patients. The most common are muscle cramps, nausea and diarrhea. The expert reports that 25% of his patients have built some skepticism about Tepezza. 

RELATED: Horizon switched up strategy for Tepezza launch, moving quickly to DTC to reach eye disease patients

Price is another potential hurdle. Upon its launch, Horizon estimated a six-month course of the drug would cost $200,000. But Jefferies’ expert puts the figure for his average-sized patient to be $350,000. It's approaching $500,00 for his heaviest patients. 

Regarding potential competition, Jefferies’ expert sees smooth sailing ahead for Tepezza. The expert stopped offering his patients a chance to participate in a trial for a potential competitor, Immunovant’s RVT-1401, because he couldn’t recruit them because of the success of Tepezza. Successful treatments typically lead to new competitors but the expert doesn’t see any threats to Tepazza for at least five years.