If Aerie’s Rhopressa gains US approval, which looks likely after Friday’s positive adcom vote, the company will need to choose its pricing strategy carefully. With a cheap generic alternative available, and questions over Rhopressa’s side-effect profile, achieving first-line use could prove difficult.
Whether Rhopressa is a serious economic prospect is of course not the concern of the FDA, and accordingly meeting the low bar of non-inferiority versus timolol was good enough for the adcom. On this occasion, however, investors seem aware of the risks, as shown by Aerie’s stock drifting downwards after Friday’s positive vote.
If at first you don't succeed
The relatively quick adcom culminated with a 10-0 vote in favour of Rhopressa’s ability to reduce elevated intraocular pressure in patients with open-angle glaucoma or ocular hypertension, and a 9-1 endorsement that the project’s efficacy outweighed its risk. Aerie shares had been suspended during the panel’s deliberations, and after trading reopened the stock closed 2% down on the day.
Doubts in the market probably centred on safety: in trials, 19.3% of patients discontinued Rhopressa, the majority doing so because of ocular events. A subject in which the panellists were particularly interested was discontinuations due to incidence of corneal verticillata, a condition characterised by corneal deposits.
Ultimately, however, most panellists believed that adverse events were manageable and similar to those already observed. The FDA has until the action date of February 28 to decide whether to approve Rhopressa.
Still, on the question of efficacy it is an unavoidable fact that Rhopressa failed its first phase III study, Rocket-1, missing its non-inferiority endpoint against timolol, and only succeeded in Rocket-2 after the FDA agreed to change the endpoint to consider patients with baseline intraocular pressure of 20-25mmHg rather than the previous 20-27mmHg (Glaucoma fans throw caution to the wind, February 18, 2016).
Questions about utility in the >25mmHg population were raised at the adcom, though Aerie has now positioned Rhopressa in the low-IOP/adjunctive setting.
To the P&T committee
Stifel analyst Annabel Samimy wrote that the panel’s label recommendations should not prove to be a barrier to adoption. A bigger hurdle could be Rhopressa’s price, depending on where Aerie sets it.
The comparator, timolol, is generic and is therefore a preferred drug by many payers – such that Valeant’s once-daily version, Istalol, is an excluded medication on the Express Scripts national preferred formulary.
Unless Aerie prices at a significant premium, it seems likely that Rhopressa, which offers a different mechanism of action, will make its way onto formularies. It seems less likely that insurers will be willing to support its use front-line use unless the price is close to timolol’s – and of course, insurers will need to account for the fact that side effects carry additional costs.
If the FDA is not concerned about the efficacy question it is difficult to see anything other than approval for Rhopressa. Investors will want to watch its launch trajectory carefully, however – setting an agreeable price that does not prompt the sellside to pull back from its bullish forecasts will be a difficult needle to thread.