Xeris Joins Lilly On Market With Approval Of Easier-To-Use Glucagon
Executive Summary
Xeris’s Gvoke gets FDA approval, joining Lilly’s Baqsimi as products to treat emergency episodes of hypoglycemia with an easier-to-use kit. Xeris will launch its prefilled syringe in Q4 and an auto-injector in 2020.
Xeris Pharmaceuticals Inc. obtained US Food and Drug Administration approval of Gvoke, its ready-to-use liquid glucagon for emergency cases of hypoglycemia in diabetes patients, on 10 September, getting the okay roughly six weeks after Eli Lilly & Co.’s nasal powder product Baqsimi was approved as the first non-injectable glucagon.
Xeris CEO Paul Edick said on a same-day investor call that Gvoke would be priced at par with Lilly’s product, which carries wholesale acquisition costs of $280.80 for a single-pack product and $561.60 for a two-pack. (Also see "Keeping Track: US FDA Clears Two More Biosimilars, First Non-Injectable Glucagon" - Pink Sheet, 28 Jul, 2019.) Xeris will price its 0.5 mg version for pediatric patients and its 1 mg version for adults the same, and offer one- and two-pack products.
The company initially will offer a prefilled syringe version, called Gvoke PFS, which Edick said could be available at pharmacies in November. It is working with a contractor to develop an auto-injector to be named Gvoke HypoPen, which is expected to be available in 2020. Xeris began the process of developing Gvoke assuming most patients would want the auto-injector version, but now thinks the market split will be close to 50/50, the CEO said.
Xeris sees an underserved market for its product, with Edick pointing out that of 5.6m diabetes patients in the US, only 660,000 fill a prescription annually for a glucagon kit. Kits available prior to the approval of Lilly’s Baqsimi involve complicated steps to get ready for administration, turning a powder into a liquid for injection. That has proven challenging for non-clinicians in emergency situations, he added, calling the existing kits “virtually impossible” to use correctly.
“Our market research shows that there is a strong demand for our prefilled syringe, specifically for people who don’t want to rely on a device and want the certainty of seeing an injection take place,” the exec said. “The HypoPen auto-injector will take longer to manufacture; our auto-injector supplier will immediately ramp up all needed activities for commercial manufacturing and capacity to meet our anticipated market demand.”
Jefferies analyst David Steinberg predicted in a 10 September note that Gvoke could attain more than $300m in peak annual sales. With two formats, Gvoke “could help expand this undertreated market as it significantly improves on Lilly’s cumbersome-to-use (12 steps) glucagon kits,” he said.
The US FDA approval came on the action date of 10 September, although that date was pushed back three months in June. The agency attributed the delay to its need to review a “recent submission in response to an information request,” which reportedly was related to chemistry, manufacturing and controls (CMC) issues. (Also see " Keeping Track: Approvals For Polivy, Keytruda, FDA Applause For Biosimilars" - Pink Sheet, 14 Jun, 2019.)
The approval is based on three Phase III clinical trials in adult and pediatric patients with type 1 diabetes, which showed 100% treatment success in children and 99% success in adults. Usability research testing prototypes of both versions of Gvoke demonstrated nearly 100% success rates in administering the medication following a two-step process, Xeris noted.
Second-To-Market Has Advantages
Edick said on the company's call that Lilly’s relatively brief first-to-market advantage could play to Xeris’ favor, as the larger company will be doing a lot of the work required for creating awareness of more convenient glucagon kits and the need for them.
“We always thought being second would to some degree be advantageous, because we would see what [Lilly does] and most everything they’ve done is pretty much what we thought they would do,” he said. “They priced right where we thought they would, their approach to access and reimbursement is pretty much what we thought it would be, their activity in the marketplace is what we had anticipated, and that gives us great confidence that we’re going to be very competitive.”
A 60-person commercial team is being assembled, he added, noting that sales reps were offered positions contingent on the product’s approval and those personnel should be joining the company in the next few weeks. As important, however, will be efforts to interact with the payer community, Edick said.
“Our market access team has been in place for a few months now and we are positioned to make rapid progress with the various formulary processes now that we are approved,” he said. “Although it takes time to get coverage on managed care formularies, we are confident we can work through this process for the balance of this year and into the first quarter of next year. In addition, we will launch a co-pay assistance program for people with commercial insurance.”
Jefferies’ Steinberg said both “a strong social media strategy and plans for buying down co-pays on commercial plans” will be crucial tenets of Xeris’s early launch strategy. Edick said the company plans a direct-to-consumer advertising campaign for Gvoke, as well as other direct-to-patient efforts.
Xeris expects its and Lilly’s product to gain traction quickly. “The kit that is available or has been available is just too difficult and too scary,” Edick asserted. “We anticipate that people will go to the new formats relatively quickly. We anticipate that there will be conversion from the current kit, there will be patients who’ve never had a kit who come into the market, and I think physicians will prescribe for a broader subset of their patient population given the easier nature that these devices provide.”
Behind Lilly and Xeris, Zealand Pharma AS has been developing its own product, dasiglucagon, also to be delivered by a proprietary auto-injector device, but it is thought to be as much as two years away from reaching the market. Edick predicted Lilly and Xeris together will have set the market by then, with the third entrant left to try to take market share from the other two firms.
Xeris also announced a revision to its existing credit facility with Oxford SVB; the tranched financing increased from $45m to $85m while the interest rate was lowered by 50 basis points on the approval news. Previously, Xeris grossed $98.3m from an initial public offering in 2018. (Also see "Finance Watch: Is The IPO Boom Making Anyone Nervous Yet?" - Scrip, 27 Jun, 2018.) It added another $58.8 million in a follow-on offering in February. (Also see "Finance Watch: Anchiano, TCR2, Hoth And Stealth Make Seven US Biopharma IPOs For 2019" - Scrip, 25 Feb, 2019.)