When Novartis unveiled the $2.1 million list price on spinal muscular atrophy gene therapy Zolgensma, market watchers worried that the jaw-dropping tag would hobble its market potential. But as $186 million fourth-quarter sales suggest, those worries are largely overblown.
Officially launched in the U.S. in June, Zolgensma recorded sales of $186 million in the fourth quarter, ahead of analysts’ expectations of $177 million and up from already forecast-busting $160 million in the previous quarter.
The drug is proving worrywarts wrong by winning over payers despite its hefty price. About 97% of commercial lives and over 50% Medicaid patients are now covered, versus 90% and 30%, respectively, at the end of September, CEO Vas Narasimhan told investors on a Wednesday call.
Moving forward, Narasimhan said the company still expects to treat about 100 patients with Zolgensma each quarter in 2020, with increasing share among infants under 6 months of age offsetting the aging-out of older patients. To help it reach those younger patients early—and achieve maximum results—newborn SMA screening is also on an upward trend, growing from 30% at the end of Q3 to about 39% now, and Novartis expects that rate to reach 70% by the end of 2020.
The first major “inflection point” could come soon in the form of an approval in Europe and a Japanese nod in the first half of 2020, the CEO said.
Novartis is trying to expand into older patients with an intrathecal dosing scheme. Zolgensma is now approved for IV administration, and that's only allowed in patients younger than 2 years old. Intrathecal dosing—essentially, injecting Zolgensma into the spinal canal—would expand its reach into older patients.
But first, Novartis needs to get out from under a clinical hold imposed by the FDA in October, when a preclinical study raised safety flags for intrathecal use of Zolgensma's highest dose.
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Meanwhile, though, the company thinks it can ask the FDA for approval based on the existing package of data covering the two lower-dosed cohorts.
“We believe the data, which we now have in for the first two dose cohorts, are compelling enough to enable us to file,” Narasimhan told reporters during a separate conference on Wednesday. If the FDA agrees with the company, Novartis could submit for intrathecal approval as early as mid-2020, he said.
Zolgensma is currently competing against Biogen’s market-leading SMA injection Spinraza, which is allowed in a broader age range. Roche’s oral risdiplam could soon join the game, too, thanks to an FDA priority review granted in November. In the first three months of 2019, Spinraza delivered $1.55 billion in global sales, growing about 24% year-over-year. And EvaluatePharma analysts recently projected risdiplam could collect $803 million in 2024 sales.
When asked how Novartis views upcoming competition from Roche's oral drug, Narasimhan said Zolgensma’s one-time use is its “core positioning” against chronic therapies. Parents generally prefer a one-time treatment over a lifetime of medication for their children, he said.
During the Q4 conference call, Narasimhan also unveiled an ambitious plan for Novartis’ business in China: The Swiss company now aims to double its sales in the country by 2024. In its current earnings report, Novartis started reporting China sales separately; those numbers showed $544 million in Q4 China sales, up 21% at constant currencies, bringing its full-year haul there to about $2.2 billion.
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To hit its new target, Novartis hopes to move more quickly with regulatory filings on its innovative medicines. In 2020, planned approvals in China include a Cosentyx label expansion in ankylosing spondylitis, Zykadia in ALK-positive first-line non-small cell lung cancer and Mayzent for multiple sclerosis, among others.
Overall, Novartis’ Q4 saw sales of $12.7 billion, up 13% at constant currencies. Besides Zolgensma, Cosentyx and heart drug Entresto again contributed the most growth, with sales of $937 million and $430 million, respectively.
Entresto recently suffered a setback, though, as it “narrowly missed” the goal of reducing deaths and emergency hospitalizations in heart failure patients with preserved ejection fraction (HFpEF). But despite that data disappointment, Novartis expects to file for that approval.
“We’ve had good discussions with the U.S. FDA, and the approach that we will take is a broad indication given the benefits that we’ve seen across the patient population,” Novartis’ drug development head John Tsai said on the investor call.
For 2020, Novartis now expects sales to grow in the mid- to high-single digits, based on the assumption that no generics to multiple sclerosis drug Gilenya or Sandostatin LAR will enter in 2020 in the U.S.