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Biogen, Opening Bottlenecks, Sees Spine Drug Sales, Shares Rise

Xconomy Boston — 

Another quarter is in the books for Biogen’s nusinersen (Spinraza), the first ever approved drug for spinal muscular atrophy. And despite the drug’s high price and the logistical bottlenecks involved in rolling it out in treatment centers across the country, the Cambridge, MA, company is starting to gain traction.

Biogen (NASDAQ: BIIB) reported $203 million in quarterly nusinersen sales this morning, well past consensus analyst estimates of about $70 million. Those numbers, which include $195 million in U.S. sales and $8 million abroad, helped push Biogen shares up more than 5 percent this morning, to $300 apiece in pre-market trading—levels Biogen’s stock hasn’t reached since last November.

The sales numbers include a one-time $30 million figure for inventory stocking of nusinersen in the U.S., but as analyst Geoffrey Porges of Leerink Partners noted, even without that number sales would’ve been well beyond expectations.

The FDA approved nusinersen in December for children and adults with all forms of SMA, a degenerative muscle disease that can rob people of their ability to walk and function independently. But despite that broad approval, the drug’s high price—$750,000 for the first year of treatment, and $375,000 each year thereafter—several insurers put up barriers, saying they first wanted to see published data in patients with certain types of SMA before approving coverage (there are 5 types in all, classified from 0 to 4). Treatment centers have also faced logistical struggles stocking the drug and preparing for the complicated procedures required to administer it. Nusinersen is one of the few RNA-based medicines on the market, and requires periodic infusions into a patient’s cerebrospinal fluid.

As Xconomy has detailed, during that time, some frustrated patients and their families have had to wait months before receiving treatment, while others were still awaiting insurance coverage. The drug became a flashpoint for the rising costs of rare disease medicines with no other treatments—big business in the pharmaceutical world—and whether those prices would cause backlash from payers.

As more data have come in from Biogen, however, including details from a key 126-patient study called CHERISH in April, sales have picked up and coverage has widened. As of late April, Biogen had said 100 commercial plans and 65 Medicaid plans approved “individual cases” of nusinersen, that 88 sites had administered it, and 203 total sites had submitted “start forms,” which patients fill out to try to gain access to the drug. Those numbers have grown. According to Biogen’s slide presentation today, 145 sites have administered the drug as of July 14, and 233 sites have submitted start forms. Coverage of patients with Medicaid or private insurance has also picked up—80 percent of patients covered with commercial insurance and 60 percent of those on Medicaid have broad access to the drug, Biogen said in its presentation.

On a conference call Tuesday morning, CEO Michel Vounatsos said two thirds of the patients treated to date have either Type 2 or Type 3 SMA. (Patients with Type 1 SMA are diagnosed in infancy and often die at an early age; Type 2 and Type 3 progress more slowly, though patients might never be able to walk, or lose that ability later in life.) Vounatsos cautioned, however, that continued uptake of the drug in these patients may be slow. A majority of patients who have Type 2 have previously had spinal surgery, making it difficult to give them nusinersen. The company is working on solutions with physicians. Nusinersen sales may also slow as patients transition from the first, higher-priced year ($750,000) of treatment to the subsequent, lower-priced years ($375,000), Vounatsos said.

The drug was recently approved in Europe, Japan, and Canada. Biogen estimates there are about 12,000 SMA patients in these countries, Vounatsos said.

The launch’s success is critical for Biogen, which has no other near-term commercial opportunities in its pipeline and has bet heavy on risky neuroscience programs—a strategy first championed by former CEO George Scangos but carried over by Vounatsos. Biogen’s most advanced experimental treatment, aducanumab, won’t produce Phase 3 data until 2019 in the high-risk field of Alzheimer’s disease, which is littered with late-stage failures. The company also recently acquired an experimental stroke drug by buying Remedy Pharmaceuticals, of New York, but a Phase 3 study won’t begin until next year. More acquisitions are likely, but so are future job cuts. The company said in a statement this morning that it intends to “increase business development activity” but also streamline operations. By 2019, some $400 million in yearly cash “may be available” to back top R&D programs, Biogen said.