Genzyme has built an empire by thinking small—treating diseases that affect tiny groups of patients. Now it’s seeking to capitalize on a cholesterol-lowering drug that requires it to think small and big at the same time.
The Cambridge, MA-based biotech company (NASDAQ: GENZ) is starting to show how it intends to make mipomersen into a workhorse for much of its growth over the next decade. I got some insight into the company’s thinking during an interview with John Butler, president of the company’s renal, endocrinology, and cardiovascular business.
Genzyme placed a big bet on mipomersen back in January, when it agreed to pay $325 million upfront to Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) for the right to co-market the drug worldwide. The price for a piece of mipomersen was high for a couple reasons. Soaring cholesterol levels in the fast-food-loving U.S. contribute to heart disease, the nation’s leading cause of death. And drugs that lower cholesterol are the best-selling class of pharmaceutical products, generating 79 million prescriptions a year, according to market research firm IMS Health. Pfizer’s Lipitor, the leader of the class, is the top-selling pharmaceutical ever, with $12.7 billion in sales last year. So anything that comes along that’s more effective, even if it grabs only a sliver of this market, is going to generate serious cash flow.
That’s exactly what Genzyme is banking on. “This offers a significant benefit over the standard of care for a seriously ill patient population. We look at this as a significant driver for us in the future,” Butler says.
A clinical trial last year showed that mipomersen could reduce cholesterol by 40 percent more than statins alone, that it can lower patients’ cholesterol counts to a safe level, and that it can be taken in combination with those drugs. Sounds great, but as Butler says, this isn’t really for everybody. The new drug is only meant to be taken by patients at exceptionally high risk of heart attacks and strokes because of their clogged arteries. Plus, since it’s a weekly injectable, it doesn’t have the same kind of convenience for the masses as a daily pill like Lipitor. (The drug also is designed to work differently than anything on the market. It’s a targeted drug that reduces the production of apoB-100, a protein that’s essential for synthesizing and transporting LDL “bad” cholesterol in the blood.)
“This is not a product that will compete with statins, it’s for patients who aren’t adequately controlled with those drugs,” Butler says.
Mipomersen isn’t scheduled to reach the desk of FDA reviewers until the second half of 2010, so a lot of work still needs to be done to prove it’s ready for the market. Genzyme’s first item on its to-do list is to show that mipomersen works for patients with an extremely rare genetic disorder called homozygous familial hypercholesterolemia that makes it so people can’t properly control cholesterol in the blood. The disorder means that patients have two faulty copies of a gene that controls cholesterol levels, which puts even very young children at risk of a heart attack or stroke, Butler says. About 300 patients, one in a million people in the U.S., have this disorder, and Genzyme expects to be able to ask the FDA for clearance to sell the drug in the second half of 2010 if this trial pans out, Butler says.
That targeting of a small patient population is typical Genzyme. But here’s where the part about thinking bigger enters the picture: Genzyme’s next step is to show mipomersen can help a broader group of patients—estimated at about 6,000 in the U.S.—who only have one bad copy of the cholesterol-clearing gene, but often have cholesterol scores so high that they need to visit a doctor regularly for what’s called an apheresis blood-filtering procedure. The procedure costs $75,000 to $150,000 a year, Butler says.
Then come the really big numbers. Last month, Genzyme said it started a pivotal trial of the drug for patients with a condition called heterozygous familiar hypercholesterolemia that also have one bad copy of the gene that contributes to their high cholesterol, but it isn’t so severe that they need the blood filtering. About 300,000 patients fall into that category, Butler says. Then there’s another 1 to 2 million patients who are either unable to tolerate statins, or are unable to get their cholesterol low enough by taking those drugs, he says. Two more clinical trials are expected to start later in the year to see if the drug can help those “high-risk” patients, Butler says.
Before Genzyme and Isis can market to that wide of a patient population, Genzyme will need results from what it calls an “outcome” study, Butler says. Genzyme hasn’t yet started the “outcomes” study or talked about its design, but generally the FDA wants to know whether drugs in the category can reduce the death rate and lower the number of heart attacks and strokes, Butler says.
All of this expansion naturally raises the question of price. How do you price a product that’s originally for just 300 seriously ill people (and therefore presumably pretty high), without making it too expensive to reach a mass market?
Butler didn’t want to discuss price with me, not yet anyway. “It’s way too early to talk about price. What drives price is the quality of the data,” he says.
He’s also not talking yet in hard numbers about how much impact mipomersen could have on Genzyme’s future bottom line, but the company has structured its partnership with Isis to prepare for big paydays to come. Genzyme and Isis plan to split profits from the drug, starting with a 70/30 split in favor of Genzyme, with a sliding scale that rises up to a 50/50 split once annual sales reach $2 billion. That might not mean much to a company like Pfizer, which is losing its patent on Lipitor in two years, but it means a lot to Genzyme, which had $3.8 billion in revenue last year as a company.
“This is a product that really fits Genzyme,” Butler says.