Event - Self administration key to Shire's Firazyr hopes

Analysis

Shire’s Firazyr is making a second attempt at cracking the US market, and next week’s review by an FDA advisory committee will be a key moment. Already on the market in Europe, and boosted by the EU’s addition of self-administration to its label, the hereditary angioedema (HAE) treatment is considered to have a good chance of receiving a positive review by the expert panellists (Shire needs Firazyr to stand out in HAE crowd, March 2, 2011).

As the fourth product to treat the sometimes life-threatening outbreaks of swelling characteristic of HAE, Shire needs the US label to allow for patient self injection to clearly separate Firazyr from its competitors. As European sales have been disappointing so far, a US label requiring clinician administration would be considered a big blow to potential sales.

Product Firazyr
Company Shire
Market cap $16.5bn
Product NPV $350m
% of market cap 2%
Event type FDA advisory committee
Date 23 June 2011

Competition

Patients with HAE, who have inherited deficiency or dysfunction of C1-esterase, are prone to rapid swelling. It is a rare condition, affecting 1 in 30,000-50,000 people, but can become life-threatening when the swelling interferes with patients’ breathing.

Firazyr mimics peptides to block the actions of bradykinin, a peptide that causes blood vessels to dilate and also causes the physical manifestations of HAE.

Three other products are already on the US market for HAE, and a fourth is available in Europe. ViroPharma’s Cinryze leads the space, with 2016 sales forecast at $574m. However, that product is for prophylactic use – requiring twice-a-week intravenous injections – and thus is unlikely to directly compete with acute use and subcutaneous injections with Firazyr.

Two products in the US for acute episodes are Dyax’s Kalbitor and CSL’s Berinert P. Berinert P requires an IV infusion and Kalbitor, whilst also a subcutaneous injection, has an anaphylaxis black box warning that requires administration by a medical professional, requiring treatment in a health care facility.

Ruconest, the rabbit-milk derived protein replacement therapy known in the US as Rhucin, has won EU approval to treat acute episodes but also must only be administered by a health care professional.

The EU first approved Firazyr when it was owned by German firm Jerini, which Shire bought in 2008 for €328m ($509m). So far, it has been one of Shire’s few disappointing buys: whilst executives predicted peak sales potential of $350m-$400m, Firazyr sold just $6m in 2009, its first full year, rising to $11m in 2010 (EP Vantage Interview - Shire enters HAE market with Jerini buy,July 3, 2008).

The self-administration allowance won earlier this year in Europe is believed to have paved the way to expanded sales, although it is too soon to see the effects of that label change. What is clear, however, is that the product as administered by clinicians has been slow to launch, raising questions about Shire’s rosy predictions.

High hopes

Thus, winning approval in the US would be an important expansion, but getting the self-administration on the label would be a bigger win. It certainly would help Shire’s management to achieve the significantly improved sales that would justify its purchase of Jerini.

EvaluatePharma’s consensus forecast now puts 2016 sales at $169m, a total that gives the compound a net present value of around $350m. Sales therefore need to substantially exceed current forecasts to justify the Jerini price tag.

Analysts from Cowen believe the self administration label will help Firazyr “capture a majority of the HAE market in the US.” Morgan Stanley analysts expect pricing at more than the $7,000 a dose of Kalbitor, well above the $2,000 in Europe, which may help drive sales numbers. Leerink Swann analysts note that Firazyr might win converts from the less severe patients taking Cinryze for prophylaxis because of its subcutaneous injections.

Collins Stewart analysts are less optimistic, noting that competition has blunted sales in Europe and it will be trying to break into a US market with well-established players. Such an argument will be reinforced if the product does not win the prized self-administration label.

HAE Market WW annual sales ($m)
Product Company 2010 2011 2012 2013 2014 2015 2016
 Cinryze  ViroPharma  177  255  335  413  475  525  574
 Firazyr  Shire  11  24  57  95  130  159  169
 Kalbitor  Dyax  9  34  55  75  91  104  117
 Berinert P  CSL  8  38  49  57  62  66  70
 Rhucin/Ruconest  Pharming/Santarus/Swedish Orphan Biovitrum  -  -  -  2     8  22  29

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