Ultragenyx snares FDA nod for ultraorphan med Mepsevii, and a valuable voucher, too

On Wednesday, the FDA approved Ultragenyx's Mepsevii, an ultraorphan drug expected to carry a high price tag.

Rare disease biotech Ultragenyx has won its first FDA approval with Mepsevii, an enzyme replacement therapy expected to carry a high price to treat a tiny group of patients. And with that approval, Ultragenyx also snared a priority review voucher potentially worth hundreds of millions.

On Wednesday, the FDA endorsed Mepsevii for children and adults with mucopolysaccharidosis VII (MPS VII), a lysosomal storage disorder (LSD) caused by a deficiency of the beta-glucuronidase enzyme. Over time, the disease—also known as Sly syndromecauses a buildup of glycosaminoglycans that can damage tissue and organs throughout the body, the company said. 

Ultragenyx CEO Emil Kakkis, M.D., Ph.D., said in a statement that the approval marks a "pivotal moment" for the biotech and for patients with ultrarare diseases that haven't yet attracted R&D attention. William Sly, M.D., chairman emeritus at St. Louis University's Department of Biochemistry and the doctor who first described the disease in 1973, added that he's "thrilled beyond belief to see this treatment advance after more than 40 years of work and anticipation." 

"I hope that this treatment will follow the other successful examples of enzyme therapy for LSDs and help improve the lives of patients with this rare disease," Sly said in a statement

With the FDA approval, the biotech also gets a valuable Rare Pediatric Disease Priority Review Voucher, awarded under the agency's rare disease development program. The voucher could be sold to another biopharma company that wants to speed up review of its own drug candidate.

These vouchers have sold for hundreds of millions of dollars—AbbVie, for instance, paid United Therapeutics $350 million in 2015 for the chance to put one of its products on the FDA's priority track. More recently, Gilead Sciences shelled out $125 million to Sarepta Therapeutics to snare a priority review voucher, Barclays analysts pointed out.

Ultragenyx now intends to launch Mepsevii, its first approved product, later this month. The FDA is requiring the company to run a postmarketing study to monitor safety. Ultragenyx is expecting a marketing decision in Europe in the first half of next year.  

Ultragenyx said its med will cost an average of $375,000 per patient per year after discounts, according to a note from Evercore ISI analyst Steven Breazzano, who predicts about $75 million in peak sales. Only about 200 patients in the developed world have the disease, according to the company. Based on the net cost figure provided by the company, Barclays analysts calculated that the drug costs $549,900 per year before discounts for a patient who weighs 25 kilograms (55 pounds).

In their note on the approval, Barclays analysts said they "see potential upside with higher pricing and more patient identification after launch."

Founded in 2010, Ultragenyx is developing drugs for rare and ultrarare diseases, including another late-stage candidate, burosumab, designed to treat X-linked hypophosphatemia. It has earlier-stage gene therapies under development and a small molecule candidate dubbed UX007 it's testing in long-chain fatty acid oxidation disorders and glucose transporter 1 deficiency, according to the company's online pipeline