More than two years after turning in disappointing results from a phase 3 trial of Palynziq to treat the rare inherited blood disorder phenylketonuria (PKU), BioMarin finally won FDA approval for the drug Thursday night. But with a dreaded black box warning on the label, and an estimated average cost of $192,000—a 28% premium to BioMarin’s older drug to treat the same condition, Kuvan—analysts are already wondering whether the product will be the blockbuster they've long been expecting.
Palynziq (pegvaliase) was approved to treat adults with PKU, a disease that causes the amino acid phenylalanine to build up in the blood, raising the risk of neurological problems. About 33,000 adults in BioMarin’s global markets have the disease, and fewer than 2,000 are taking Kuvan, a drug that requires patients to adhere to a restrictive diet.
Palynziq, which is designed to break down phenylalanine in the blood, doesn’t require the special diet, but 9% of patients in clinical trials suffered anaphylaxis, hence the black box warning. The FDA is mandating that BioMarin administer a detailed risk-mitigation program, which requires patients to receive their first doses in physicians’ offices before they can give themselves the drug at home.
BioMarin is taking a measured approach to the launch, starting at 32 sites that were involved in the clinical trials before expanding to an additional 30 clinics. What’s more, patients have to start on a low dose and then gradually add to it—a titration process that can take as long as a year.
As a result, “we anticipate slow initial sales to reflect a tough induction/titration phase,” Leerink analyst Joseph Schwartz wrote in a note to investors on Friday. He’s projecting peak sales of about $500,000 by 2029. BioMarin’s long-term goal of turning Palynziq into a billion-dollar blockbuster “may be possible," but "this will require substantial uptake and compliance,” Schwartz added. Expanding into the pediatric market would help, he noted, “but the company seems focused on addressing the adult population in the U.S. and ex-U.S. prior to discussing other expansion strategies.”
The FDA approved Palynziq based on results from a phase 3 trial, during which patients taking the drug showed substantially reduced levels of phenylalanine in their blood compared to people on placebo. Industry watchers initially had questions about the drug’s future, as preliminary results from that trial didn’t show much improvement in the secondary endpoint: cognitive improvement.
Still, the company’s executives are confident Palynziq is good enough to boost BioMarin’s profile in the PKU market. “Kuvan, as our first therapy, was … effective at allowing us to reach a material but a small proportion of that overall market opportunity,” the company’s chief commercial officer, Jeffrey Robert Ajer, said during BioMarin’s first-quarter earnings conference call in April, noting that the older product was only effective in about half of patients. “Pegvaliase adds a substantially new element to that.”
BioMarin told investors to expect year-over-year revenue growth of 15% for 2018 after its sales in the first quarter rose 23% to $373.4 million. The company’s top seller is Vimizim, which treats the enzyme disorder Morquio A syndrome. Sales of Kuvan rose 7% in the quarter to $99 million.
BioMarin has been building a gene therapy pipeline, which includes a gene therapy product to treat PKU. The company expects to start clinical trials of that product in 2019. When one analyst on the call asked how gene therapy—which would potentially be a one-time cure—might be positioned against both Kuvan and pegvaliase, CEO Jean-Jacques Bienaimé acknowledged that even with two drugs, BioMarin has a long way to go if it’s going to reach all the adults and children with PKU. Gene therapy “really expands our reach into the overall opportunity that PKU allows,” he said.