On paper Ultragenyx investors should be jumping for joy. The company’s newly approved rare disease candidate Crysvita is set to be launched at a substantially higher price than expected with a generous label from the US FDA, while the prospect of a cash injection from the sale of a priority review voucher sits on the horizon.
However, these events prompted barely a flicker in Ultragenyx shares – the stock has edged a meagre 2% higher on the news. True, a US green light was widely expected after an EU nod earlier this year. Perhaps investors are heeding the company’s advice to expect a slow launch, and are awaiting sales to adult patients before getting too excited.
Unlike in Europe, where the drug is currently restricted to children and adolescents, the US has allowed Crysvita to be marketed to all patients with X-linked hypophosphataemia. The rare inherited condition, also known as vitamin D-resistant rickets, is characterised by low blood levels of phosphorus; in childhood patients develop bowed or bent legs and delayed growth, while in adulthood this progresses to severe bone pain and frequent fractures.
Crysvita works by binding excess levels of a hormone called FGF23, and clinical trials showed that this mechanism leads to a significant reduction in serum phosphorus levels. Success on this hard endpoint was clearly enough for the FDA to grant approval in all patients; trials also provided evidence that Crysvita improves symptoms of rickets in children and helps to heal adult fractures, and few doubt that the drug marks a huge step forward in the management of this disease.
Still, questions remain over Crysvita’s utility in adults: in Europe Ultragenyx and its partner Kyowa Hakko Kirin initially filed for approval in all patients, but withdrew the application in adults during the process. This looks to have been due to uncertainty at the regulator about risks and benefits – the CHMP’s report into the drug states that “there is no consensus regarding treatment of adult patients because of concern about safety issues and lack of clinical studies demonstrating efficacy with conventional therapy”.
Picking up the bill
Echoing other broad approval decisions recently, in the US the FDA has kicked these concerns on to payers. Those being asked to pick up the $200,000 a year bill in adults will also be looking closely at Ultragenyx’s phase III trial in older patients, which failed to hit on a secondary endpoint measuring pain reduction (Ultragenyx bounces back, but painful questions remain, 19 April 2017).
Perhaps by adulthood bone deformity and pain are effectively irreversible, but it should be remembered that at one time Ultragenyx considered this a very important measure – its pivotal trial in adults had begun with pain improvement as the primary endpoint.
Even the ever-optimistic sellside acknowledges that adult patients will be harder to find than children. However, the company estimates that there are 9,000 adults and 3,000 children in the US with the condition, demonstrating the importance of securing these older sufferers.
After setting Crysvita’s price so high Ultragenyx will have to hope that patients, physicians and payers have no trouble seeing the benefits in this all-important adult group.
The company gave itself leeway yesterday by cautioning that uptake would be slow as patients are found and reimbursement ironed out. But, as the sales numbers roll in over the coming months, investors will need to be reassured that Ultragenyx has pitched this right.
|Crysvita (burosumab) outlook - a complicated partnership|
|Annual revenues ($m)|
|Kyowa Hakko Kirin - sales||67||227||406||541||652||US & Canada: KHK books sales in first five years under 50/50 profit share deal. Europe: KHK books sales|
|Ultragenyx - sales||8||39||92||158||240||Latin America: Ultragenyx books sales|
|Ultragenyx - alliance revenue||2||18||41||64||88||Europe: Ultragenyx books up to 10% royalty|
|Pricing set at adults $200k/year, children $160k/year, but the above forecasts predate this announcement so are subject to change.|
|Source: EvaluatePharma for sales forecasts, company presentation for deal details.|