Roche prices Ocrevus for maximum disruption

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Roche now has the first approved drug for both the relapsing and primary progressive forms of multiple sclerosis in the shape of Ocrevus. But the company is not taking any chances on price – at $65,000 it will cost less than existing MS therapies, giving the Swiss firm a good shot at penetrating the $20bn market.

Also in Ocrevus’s favour is its label, which has no black box warning or risk-mitigation requirements, unlike some other MS treatments. With a less restrictive label than many had been expecting, Roche will be launching the drug from a strong position.

Analysts were already predicting a bright future – the product is forecast to be the second-biggest launch of the year, according to EvaluatePharma sellside consensus, just behind Sanofi and Regeneron’s Dupixent, which was approved yesterday (Sanofi needs Dupixent to meet lofty expectations, March 28, 2017). 

Sanofi has also taken a fairly cautious stance on price, suggesting that this could be the new normal as pressure from payers continues.

Discount

Ocrevus’s list price of $65,000 comes in at a 25% discount to Merck KGaA’s Rebif – which it outperformed in phase III – and is 20% less than other MS therapies on average, according to Mizuho analysts. For example, the wholesale acquisition cost of Biogen’s blockbuster Tecfidera is around $83,000, according to their model.

The actual price of Ocrevus and other MS therapies will likely be lower. Leerink analysts estimate that Tecfidera’s net price is closer to $55,000 after rebates.

In any case, Ocrevus’s cost looks at least in line with, if not slightly lower than, other MS products. This, along with impressive results in phase III and a relatively convenient dosing schedule – it is given intravenously every six months – should help it become the number-two MS drug by 2022, according to EvaluatePharma forecasts (Hidden gems emerge in ocrelizumab data, October 27, 2015). 

Top-five MS therapies
Global sales ($m)
Product Company Status Mechanism 2016 2022e
Tecfidera Biogen Marketed Fumarate 3,968 4,459
Ocrevus Roche Approved Anti-CD20 MAb - 4,093
Aubagio Sanofi Marketed PDGF tyrosine kinase & DHODH inhibitor 1,433 2,244
Avonex Biogen Marketed Interferon beta 2,314 1,611
Tysabri Biogen Marketed VLA 4 MAb 1,964 1,447
Source: EvaluatePharma

The three-month delay in Ocrevus’s approval – its original PDUFA date was December 28 – does not seem to have hurt these expectations too much. And as well as being Roche’s second-biggest growth driver behind Tecentriq, Ocrevus's launch will also be somewhat positive for Biogen, which will take a share of US profits.

However, Ocrevus’s entry will likely hurt Biogen’s MS franchise, particularly Tysabri – both are doctor's office-based treatments suited to more severe patients, whereas oral drugs like Tecfidera are usually given to those with less severe disease.

One thing to watch out for will be a warning on Ocrevus’s label about the risk of progressive multifocal leukoencephalopathy (PML). There were no cases of this potentially fatal infection in its clinical trials, but PML has been seen with other anti-CD20 treatments in other indications.

And there was a death in phase II with Ocrevus, from systemic inflammatory syndrome, which has made some wary about safety. Leerink analysts believe that Ocrevus will be kept as a second or third-line therapy in the more common relapsing-remitting form of MS, but will be widely adopted in progressive MS, which affects 10-15% of patients, and where no other treatments are approved.

Roche's pricing strategy suggests that it plans to compete across the disease spectrum, something it will need to do successfully to hit the sellside's high expectations.

To contact the writer of this story email Madeleine Armstrong in London at madeleinea@epvantage.com or follow @ByMadeleineA on Twitter.

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