Nabriva Faces Skepticism After Years Of Preparing For Novel Antibiotic Xenleta's Launch
Executive Summary
Lefamulin was approved in the US to treat community-acquired bacterial pneumonia, providing a needed IV and oral drug initially in the hospital setting, but new antibiotics have been a tough sell.
Nabriva Therapeutics PLC has been preparing for two years to launch Xenleta (lefamulin), which the US Food and Drug Administration approved as an intravenous and oral treatment for community-acquired bacterial pneumonia (CABP) on 19 August. The company believes that it has laid the groundwork for a successful launch at a time when reimbursement for antibiotics finally may be moving in a positive direction, though there still is some skepticism about commercial prospects.
Nabriva's 60 sales representatives initially will target about 900 hospital and health care system accounts where physicians are looking to send CABP patients treated in the emergency department home with an oral antibiotic, treat patients with co-morbidities who have limited antibiotic options, and shorten hospital stays for patients receiving IV treatment.
Xenleta will be available through specialty distributors starting in mid-September with a list price of $205 per day for IV treatment and $275 per day for the oral version. Nabriva expects 70-80% of sales to come from oral prescriptions with 20-30% from IV use, chief commercial officer Francesco Maria Lavino explained during a 19 August call to discuss Xenleta's approval in the US.
Lavino said the company's sales team will keep its focus on the hospital setting, but will look for creative ways to market the drug in the community setting. The same sales reps will promote the IV antibiotic Contepo (fosfomycin), assuming it is approved in 2020, for complicated urinary tract infections. The US FDA issued a complete response letter rejecting Contepo due to manufacturing concerns, but Nabriva intends to refile the drug early in the fourth quarter of 2019. (Also see "Keeping Track: US FDA Approves Sanofi’s Dengvaxia, But Heron’s HTX-011 And Nabriva’s Contepo Fall Short" - Pink Sheet, 5 May, 2019.)
CEO Ted Schroeder and Lavino noted during Nabriva's call that most CABP patients treated in hospitals and emergency departments are older patients covered by Medicare and Medicaid. They noted that recent policy changes at the Centers For Medicare and Medicaid Services (CMS) improve reimbursement for novel antibiotics, and Lavino said Medicare and commercial payers have been supportive of Xenleta's use in appropriate CABP patients.
CMS recently approved a policy increasing new technology add-on payments (NTAPs) that boost the amount of money Medicare and Medicaid will pay to reimburse the costs of antibiotics. The NTAP for drugs used in hospital settings in 2020 will be 65% of the amount of the cost that exceeds bundled payments for specific medical services or 65% of the cost of the drug, whichever is lower. But for anti-infectives with qualified infectious disease product (QIDP) designations from the US FDA, like Xenleta, the NTAP percentage is 75%.
Also, CMS adopted a new diagnosis-related group (DRG) code for treatments that may play a role in reducing antimicrobial resistance (AMR), which may result in higher payment for new antibiotics starting on 1 October. (Also see "Commercial, Reimbursement Hurdles Need To Be Addressed By Antimicrobial Resistance Efforts" - Scrip, 15 Feb, 2019.)
In addition, Schroeder said congressional support for the DISARM Act is growing. The legislation would carve out antibiotic reimbursement from the DRG system for inpatient hospital costs. (Also see "Antibiotic Incentives: Advocates Sounding The Alarm For DISARM " - Pink Sheet, 13 Jun, 2019.)
Despite the news of Xenleta's approval and Nabriva management's optimistic outlook, investors were skeptical given the difficulty other companies have had turning new antibiotics into successful products. Achaogen Inc. went out of business following approval and minimal use of Zemdri (plazomicin) and Tetraphase Pharmaceuticals Inc. recently reorganized to focus entirely on the launch of its first commercial antibiotic, Xerava (eravacycline). (Also see "Finance Watch: Tetraphase Reorganization Follows Troubled Antibiotic Commercialization Path" - Scrip, 14 Jun, 2019.)
Nabriva's stock price rose in after-hours trading on 19 August following the Xenleta approval announcement, but held steady on 20 August, closing up just two cents (0.9%) at $2.23 per share.
"We see Xenleta as eventually making inroads into the elderly CABP population, a market in which drug resistance is high and a new antibiotic class is highly desired," Morgan Stanley analyst David Lebowitz said in a 20 August note. "While the approval is a clear positive, some investors would be keen to point out that the antibiotic market is challenging, with many generic therapies available that can make it difficult for new therapies. As such, we expect some investors might want to see a track record of growing revenue before warming up."
Novel Pleuromutilin May Fill Unmet Needs
Xenleta is a first-in-class, semi-synthetic pleuromutilin antibiotic that Nabriva is positioning as a first-line monotherapy based on its novel mechanism of action, targeted spectrum of activity, low risk of antimicrobial resistance and relative safety compared to generic fluoroquinolone antibiotics, and the availability of both IV and oral formulations. Nabriva noted that its drug is the first novel oral and IV antibiotic approved in almost two decades for CABP.
Lavino said doctors have been demanding new antibiotics for CABP, particularly with novel mechanisms of action rather than new versions of well-known antibiotic classes. The most recently approved drug for CABP prior to Xenleta in the US was Paratek Pharmaceuticals Inc.'s Nuzyra (omadacycline), a broad-spectrum IV and oral tetracycline administered for seven to 14 days versus the five- to seven-day course of treatment for Nabriva's drug. (Also see "Paratek's Antibiotic Nuzyra Survived 20 Years – Now For The US Launch" - Scrip, 3 Oct, 2018.)
Current first-line CABP treatments including the IV beta-lactam antibiotics ceftriaxone, which requires admission to the hospital and a switch to a macrolide antibiotic for discharge, since there's no oral version of ceftriaxone. Also, beta-lactams have a high risk for Clostridium difficile (C. diff.) infections, macrolides are resistant to certain Pneumoniae bacteria and beta-lactam/macrolide combinations provide no methicillin-resistant Staphylococcus aureus (MRSA) coverage.
Fluoroquinolones also are used in the front line for CABP, but the also have a high risk for C. diff. infections and their use is being discouraged due to increasing safety and antibiotic resistance concerns. (Also see "EMA Acts On Patient Concerns Over Fluoroquinolone Antibiotics" - Pink Sheet, 8 Oct, 2018.) and (Also see "Fluoroquinolones Get New Safety Labeling, But Not A REMS" - Pink Sheet, 13 May, 2016.)
“Emergency departments across the country treat hundreds of thousands of patients with CABP each year. Many of these patients, especially elderly patients with comorbidities, are admitted solely because of the lack of an effective and well-tolerated oral treatment option” Philip Giordano, vice chairman of emergency medicine at Orlando Regional Medical Center, said in Nabriva's statement about Xenleta's approval.
“With a new oral antibiotic option that has been shown to be as effective as a respiratory fluoroquinolone, possessing a favorable side effect profile, we can consider sending more patients home directly from the emergency department and avoid costly hospitalizations, which is good for both patient care and the health system," Giordano said.
Xenleta met the criteria for non-inferiority versus moxifloxacin in Phase III clinical trials generally viewed as positive, though Nabriva's drug caused higher rates of gastrointestinal side effects. The risk of C. diff has been characterized as low with only one patient in the Phase III program developing a C. diff infection. (Also see "Nabriva On Pace For Lefamulin NDA; Stock Tumbles Despite Trial Success" - Scrip, 21 May, 2018.)
The most common adverse events in clinical trials were diarrhea, nausea, injection site reactions, elevated liver enzymes and vomiting. Xenleta may cause prolonged QT interval in ECG readings, so patients with prolonged QT interval or irregular heart rhythms (arrhythmias) and patients taking drugs for those conditions should not be treated with the antibiotic. Xenleta is contraindicated for patients taking CYP3A4 substrates that prolong the QT interval.
Nabriva Launch Strategy Took Root Two Years Ago
With clinical need and market demand seemingly in its favor, Lavino said Nabriva invested in the Xenleta commercial strategy early to support a differentiated antibiotic launch strategy.
"The launch team has been working in the field since late 2017 preparing the market for Xenleta," he said. "Our highly experienced eight regional business directors have been working on market development over the last couple of years by profiling more than 600 accounts and these represent more than two-thirds of our target accounts at launch. Thanks to this hard work, we have a deep understanding of the medical needs at each account for the management of CABP."
For example, Nabriva identified which hospitals are under CMS scrutiny to lower the cost of CABP treatment, which facilities are trying to limit the use of fluoroquinolones and which ones are implementing strategies to send CABP patients home from the hospital sooner with an oral drug.
"These unique profiles will allow us to target at launch those accounts with the greatest unmet needs and at the same time those with the highest readiness for Xenleta, where we can expect a quicker uptake," Lavino said.
He noted that Nabriva is working with Medicare and commercial plans to make sure there are low hurdles to obtaining reimbursement for Xenleta in the outpatient setting. The company's market access team has met with payers representing about 95% of the CABP patient lives.
"We have initiated already the contracting process with the majority of key payers and some contracts have been already finalized, including a contract with a large integrated health system," Lavino said. "We are very encouraged by our conversations with customers to date and in particular we are pleased that very large health systems have indicated they will be placing Xenleta on their formulary – a reflection of the value that Xenleta brings to patients and the medical community."
Nabriva noted that US hospital stays for pneumonia typically are about three to four days, driving direct costs for pneumonia treatment of about $17bn annually. The company said pneumonia is the number one cause of infectious death, number three cause of hospital readmissions and number five cause of total hospitalizations in the US, and the mortality rate is 15% in the hospital and 25-30% in the intensive care unit.
Wedbush analysts predict that at its peak, Xenleta will be used to treat about 10% of the 900,000 patients treated for CABP in US emergency departments annually and 10% of the 2.4m CABP patients admitted to the hospital for IV treatment and discharged with oral antibiotics. Driscoll said Wedbush hasn't forecast sales yet for the inpatient hospital or outpatient community settings, but those settings see 3.8m patients and 2.3m patients, respectively, every year.