Spark's Luxturna Approval Ushers In A New Gene Therapy Era

Spark's gene therapy for patients with an inherited form of blindness will be available in the US late in the first quarter, but on the big question – whether it will cost $1m for the one-time treatment – Spark would not say.

Spark Therapeutics Inc. has earned a place in the pharma history books on two fronts, as the first drug maker to secure a gene therapy approval from FDA and the first company to develop a treatment for blindness. But it remains to be seen whether it reaches another first – a $1m price tag.

Luxturna (voretigene neparvovec-rzyl) was approved by FDA with a broad label Dec. 19 as a one-time gene therapy for patients with biallelic RPE65 mutation-associated retinal dystrophy. It's worth pausing to reflect on the accomplishment: manipulating an individual's genes to relieve a debilitating form of blindness. Luxturna works by delivering a normal copy of the RPE65 gene directly to retinal cells via a subretinal injection.

The approval is expected to pave the way for more gene therapies to follow, ushering in a new era of medicine. FDA Commissioner Scott Gottlieb held a conference call to announce the FDA approval Dec. 19. "Today's action reinforces the potential of this innovative technology in treating a wide range of challenging diseases," he said. "Other medical opportunities to the one that is being approved today lie just behind this milestone."

While Luxturna is the first traditional gene therapy approved by FDA, the agency also approved two cancer drugs it classified as gene therapies already this year, the CAR-T therapies Kymriah from Novartis AG and Yescarta from Kite Pharma Inc./Gilead Sciences Inc.

There are some 600 investigational new drug applications with FDA related to gene therapy in some form of development, Gottlieb said.

"Today's landmark approval of Luxturna is a moment decades in the making for the field of gene therapy," Spark CEO Jeffrey Marrazzo said in a statement.

Price Will Have To Wait

The momentum behind gene therapy and the vow from the FDA commissioner to work proactively to approve new medicines quickly is exciting for patients and drug makers, but it's also what keeps payers and other stakeholders up at night, contemplating who is going to foot the bill for these expensive medicines, and how.

Spark clearly didn't want to take away from the happy occasion by bringing up the bad news – price. The company said it would not release the price information until the new year, even though Marrazzo has already spent a significant amount of time laying out a case for why $1m would represent a fair value. (Also see "Spark Stands By $1M Or More Price Possibility For Luxturna" - Scrip, 7 Nov, 2017.)

The price, at this stage, is one piece of information everyone wants to know. The approval itself was widely anticipated following a favorable unanimous FDA advisory committee recommendation. (Also see "Spark's Gene Therapy Is On The Cusp Of Approval; Now It Gets Interesting" - Scrip, 12 Oct, 2017.) On price, Spark will have to balance the benefits of a one-time, life-altering treatment for blindness with a health care system that is not designed to handle that kind of payment up front nor has evolved to embrace new payment models. At the same time, the lifetime safety and efficacy of Luxturna are still untested.

The expected high cost of the therapy led the Institute for Clinical and Economic Review (ICER) to weigh in on the cost-effectiveness of Luxturna if it were priced at $1m. ICER concluded in a draft assessment that $1m would not be cost-effective for treatment based on ICER's typical thresholds for measuring value, but acknowledged that the drug's position as a treatment for an ultra-rare disease could provide more flexibility when it comes to reimbursement and wouldn't break the bank for US health care spending. (Also see "$1M For Luxturna? ICER Says Big Discount Needed To Be Cost Effective" - Scrip, 15 Nov, 2017.)

Biallelic RPE65 mutation-associated retinal dystrophy only affects about 1,000 to 2,000 patients in the US. Mutations in the RPE65 gene lead to reduced or absent levels of RPE65 activity, impairing vision and eventually progressing to complete blindness.

Spark said it expects Luxturna will be available late in the first quarter, and distribution will be limited to five to eight centers of excellence in the US specializing in ophthalmology. The company will need to train physicians to deliver the treatment and finalize reimbursement coverage, while patients will need to confirm their diagnosis through genetic testing. As such, the launch is expected to be slow, with initial revenues modest.

"We look for a gradual Luxturna launch," BMO Capital Markets analyst Matthew Luchini said in a same-day research note. Luchini has forecast a price of $750,000 for treatment, on the low end of consensus estimates.

Jefferies analyst Michael Yee, on the other hand, is assuming a $1m price for treatment.

"We do think there are 'hundreds' of identified patients in the SU that could get treated but the cadence of this will be ramped over the course of the year and the launch will take some time naturally given there are only going to be a few sites (3-5) around the country to start; these sites need to be started up and authorized/trained, the patients need to be scheduled and both eyes need to be treated over two separate surgeries," he said. Yee forecast Luxturna sales of $50m in 2018.

Spark will also receive a rare pediatric disease priority review voucher, which it can either use toward a future marketing application or sell to a third party. Novartis AG recently paid $130m for a PRV from Ultragenyx Pharmaceutical Inc. (Also see "Novartis Stockpiling Priority Review Vouchers" - Scrip, 19 Dec, 2017.)

Spark's stock barely moved on the news, given that the approval was anticipated, and the company announced disappointing data on its gene therapy for hemophilia A at the American Society of Hematology meeting Dec. 11. (Also see "Spark Plots Rebound For Hemophilia A Gene Therapy, As Rival BioMarin Surges" - Scrip, 12 Dec, 2017.) Spark's stock fell 35% on the news and hasn't recovered. (Also see "An ASH That Moves The Ball – And The Ticker Price" - Scrip, 11 Dec, 2017.)