Novartis' Zolgensma beats data woe, as Mayzent hits reimbursement hurdles

Despite initial payer resistance and lingering questions about possible regulatory crackdown on Novartis after the Zolgensma data manipulation scandal, the costly spinal muscular atrophy gene therapy is putting up some stellar sales.

In a closely watched launch at the Swiss drugmaker, Zolgensma delivered an impressive $160 million sales for its first full quarter on the market, topping analyst expectations by more than 60%.

Other key drugs—including immunology blockbuster Cosentyx and heart failure treatment Entresto—put up double-digit growth, with the latter delivering a whopping 59% boost. But new multiple sclerosis launch Mayzent, the first-ever treatment for secondary progressive disease, has hit some unexpected hiccups, executives said.

Still, all eyes were on Zolgensma, the most expensive drug in the world and a threat to another closely watched launch, Spinraza from Biogen. The Novartis drug’s $2.1 million price tag has raised some eyebrows and triggered payer pushback. But Zolgensma has now won coverage for 90% of patients with commercial insurance and 30% of Medicaid lives, the company said.

And that broad access is one key driver for Zolgensma’s success so far. “The vast majority of plans are putting in policies that are in line with the label,” CEO Vas Narasimhan told reporters during a call Tuesday. Even including the payers who don’t, almost all patients who fall in Zolgensma’s indication could eventually get the medicine after going through payer appeals processes, he added.

To help allay pricing concerns and accelerate coverage decisions, Novartis has proposed value-based contracting that only grants payments when the drug lives up to its efficacy promise, and by Narasimhan’s account, all payers are taking Novartis up on that method. However, “we haven’t seen material uptake" of the installment-based payment system Novartis proposed, he said.

The novel gene therapy is going up against Biogen’s blockbuster Spinraza, the first FDA-approved drug for SMA. In Q3, about half of Zolgensma patients came over from that drug, Narasimhan said.

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Going forward, the company hopes future uptake could be driven by increased screening of newborns, which now only stands at about 25% to 30%, so that more newly diagnosed patients could be identified early and get Zolgensma.

It’s also counting on label expansion in other SMA types and in older patients, as well as the drug’s global rollout. But its approval in Europe and Japan could be delayed as regulators request additional information on its manufacturing, Narasimhan said. Now, the company expects a decision from the European Medicines Agency's drug review committee in Q1 2020 and from Japanese authorities in the first half of next year.

Narasimhan stressed the delays are not related to the data manipulation that riled the FDA. The agency in August revealed that some animal testing data in Zolgensma’s application package were altered and warned of possible criminal or civil penalties. The company has since been under fire for failing to alert the agency while the treatment was under review. In announcing the data-tampering, the agency stressed that it still believes in Zolgensma's safety and efficacy.

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Novartis' two other key growth drivers, psoriasis drug Cosentyx and heart failure combo med Entresto, continued their upward trajectories, with sales of $937 million and $430 million, respectively. However, Entresto’s haul—though a 59% year-over-year growth—was slightly below analysts’ consensus of $453 million, according to data from Wolfe Pharma.

But perhaps the more worrisome disappointment? Multiple sclerosis drug Mayzent. Approved by the FDA in March, about two months before Zolgensma, Mayzent racked up a meager $4 million in Q3 sales, way below analyst forecasts of $10 million.

Because it’s the first drug specifically approved for secondary progressive MS, a more severe category than the relapsing-remitting form, Novartis knew the launch would be an uphill fight, especially when Roche’s antibody rival Ocrevus is rocketing past the blockbuster threshold.

But now, Novartis is looking at about a 90-day sales lag, primarily because of difficulties getting patients through the reimbursement process “that turns out to be more complex than we initially realized,” the CEO told reporters during the call.

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“Mayzent has had a very strong launch with respect to physician and patient interest and demand,” he said. “Our critical topic right now is converting that demand ultimately into paid scripts.” He said there have been many patient request forms coming in, and that the company expects the interest to help build up the launch over time.  

In total, Novartis’ Q3 sales reached $12.17 billion, up 10% and 4.3% above consensus. As a result, full-year sales are now expected to grow high-single-digit at constant currencies, from mid-to-high single-digit the company communicated earlier.