Novartis Lauds Launch of World's Most Expensive Drug
October 22 2019 - 4:28AM
Dow Jones News
By Denise Roland and Carlo Martuscelli
Novartis AG reported a strong launch for its new gene therapy
Zolgensma -- the world's most expensive drug -- overcoming concerns
about whether insurers would cover the treatment and a
data-manipulation scandal at the unit that makes it.
Zolgensma, which costs $2.1 million per patient, brought in $160
million in the three months to Sept. 30, its first full quarter of
sales. That was well above analyst expectations of around $98
million.
The one-shot treatment, which promises to cure a devastating
muscle-wasting disease in infants, launched at the end of May. It
is one of the first in a new wave of treatments known as gene
therapies whose price tags are raising concerns about whether they
can be afforded by governments and health insurers struggling to
control spending.
Novartis Chief Executive Vas Narasimhan said on a call with
reporters Tuesday that 99% of patients who were eligible for
Zolgensma were receiving it, although some must go through an
appeal process to do so. He added that, even with appeals, patients
were on average receiving Zolgensma within 30 days of requesting
it.
To allay payer concerns, the company is offering outcomes-based
deals where a portion of the cost is refunded if Zolgensma proves
ineffective. It is also offering insurers the option to pay for the
treatment in five equal installments over five years.
Dr. Narasimhan said that while the outcomes-based offer had been
taken up by every payer that has agreed to cover Zolgensma, there
had been little interest in the installment option. Although the
payment-by-instalment approach would ease the upfront cost, cash
flow isn't a major concern for insurers, which are by law required
to hold large reserves.
The Novartis boss said Zolgensma's uptake hadn't been affected
by a data manipulation scandal that has sparked criticism and could
lead to criminal penalties from the Food and Drug
Administration.
The company earlier this year discovered that data on mouse
testing related to the manufacture of certain lots of Zolgensma had
been manipulated by scientists at the AveXis unit that makes it.
The FDA criticized Novartis for failing to disclose those concerns
immediately, but has said the manipulation doesn't change its view
that Zolgensma is safe and effective.
Novartis has since replaced AveXis's two top scientists -- one
of whom was a founder of the gene therapy company -- and promised
to accelerate the integration of the unit into the wider
organization. Novartis acquired AveXis for $8.7 billion in April
last year.
The update on Zolgensma came as Novartis reported an 8% rise in
third-quarter net income to $2.04 billion, driven by strong sales
of its newer drugs. Sales rose 10% to $12.17 billion.
In addition to Zolgensma, Novartis highlighted heart-failure
pill Entresto and skin and rheumatic disorder treatment Cosentyx as
top performers.
Core operating profit, a figure watched by analysts that strips
out extraordinary items, was $3.75 billion, up from $3.26
billion.
Novartis raised its full-year guidance, saying it now expects
sales to grow by a high single-digit percentage at constant
currency. It forecast core operating income to grow by a
mid-to-high teen percentage, also stripping out currency effects.
It had previously expected sales to grow by a mid to high
single-digit percentage and for core operating income to increase
by a low double digit to midteen percentage.
Write to Denise Roland at Denise.Roland@wsj.com
(END) Dow Jones Newswires
October 22, 2019 04:13 ET (08:13 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Novartis (NYSE:NVS)
Historical Stock Chart
From Aug 2024 to Sep 2024
Novartis (NYSE:NVS)
Historical Stock Chart
From Sep 2023 to Sep 2024