Would you pay $2.1 million for one-off gene therapy? Glimpse of Health Care Player CSL’s Gene Therapy

Wait, What? $2.1 million for just a drug? Yes, you heard it right!

Few months back in Belgium, a fundraising campaign was held to raise funds to pay for a one-time gene-therapy of a toddler suffering from an extremely rare spinal muscular atrophy (SMA) disorder. What has caught everyone’s attention, was the astonishing $2.1 million price of the drug. The question here is whether it is worth?

What is Gene Therapy?

First let’s understand what gene therapy is. Gene therapy is one of the most cutting-edge medical technologies, possessing an untold potential on the brink of revolutionizing the treatment of most debilitating, rare and genetic ailments.

In gene therapy, the expression of a patient’s genes is modified either by deactivating/blocking or repairing the defective genes, and resuming their normal function, thereby, offering a novel and unique approach for treating life-long and devastating diseases.

One-off gene therapy is a one-time treatment, or a single dose/injection or infusion treatment given to patients.

Prices and One-off Gene Therapy

Although these novel gene therapies present significant advantages to patients with unmet medical needs and have been gaining a lot of praise for their innovative way of disease treatment, but they come at a skyrocket price. For instance,

• Luxturna, invented by Spark Therapeutics, a drug targeting inherited retinal disease is priced close to $1 million.
• Zynteglo costs nearly$1.8 million and most recently launched in the health care market,
• Zolgensma developed by the big shot biotech company Novartis for treating the rare-degenerative disorder SMA is a one-off gene therapy priced $2.1 million. This drug received US FDA approval in May 2019.

Such high prices of drugs have ignited debate amid companies (those developed them), stakeholders, and patients.

Payers are still struggling to find out the long-term repercussions of these novel and expensive treatment options that may possibly succeed in addressing and curing disease in just a single dose.

But the companies who have developed these drugs are defending the record-breaking cost of the medicine, arguing that such treatments are still cheaper than the alternate treatment available in the market.

Life-time advantage squeezed down to one-time treatment -Zolgensma Vs Spinzara

There has been a recent fuss in the market when the leading biotech company Novartis joined the debate and defended Zolgensma high price that cures SMA which is a leading cause of mortality in a newborn, emphasizing on the fact that the one-time treatment is more valuable than the costly long-run treatments.

Novartis stated an example of its rival drug Spinraza (an alternative treatment to spinal muscular atrophy, developed by Biogen), which requires infusion in every 4 years at a price of $750,000 in the first year and a maintenance dose of $375,000 per year thereafter.

Me Lennon further emphasized that considering the alternate therapy costs $4 million over a span of ten years, while the one-time cost of Zolgensma is $2.1 million, designating Zolgensma the world's most expensive drug is deceptive.

Connecting the dots-Reducing Financial Burden

Nevertheless, these novel and costly therapies have intensified the discussions on placing a value on gene therapy and how the government and the health care systems can aid in upfront payment for these one-off treatments.

Shedding light on this, Mr Lennon informed that the company is undergoing discussions with the government bodies and the health insurers for creating new payment models rendering the substantial cost reasonable for payers. With respect to this, a five-year payment plan has already been proposed by the company.

Stakeholders must come up with innovative approaches to price and reimburse the expensive treatment in order to enhance the patient access to these life-changing, novel gene therapies.

Moreover, to realizing the tremendous potential value gene therapies possesses, a reasonable access for all patients is important and so a flexible thinking about evaluating their value.

Key Players

A range of biotech companies have been leading the market leveraging gene therapy approaches while some drugs have entered the pharmaceutical market. Some are listed below-

• Spark Therapeutics: Haemophilia, Pompe disease, Batten disease
• SQZ Biotechnologies: Various Cancers and Autoimmune diseases
• Alynylam: RNAi gene therapy for rare genetic disorders
• AveXis: Neurological Genetic diseases
• Askepios BioPharmaceutical: Genetic muscular and neurological disorder

Let us now have a glimpse of an Australian biotech player that had expanded its technology platform with gene therapy.

CSL limited (ASX: CSL)

Leading Australian Biotech Giant- CSL limited (ASX: CSL) is focused on developing, manufacturing and commercialising novel protein-based pharmaceuticals, cell-culture media & human plasma fractions, with its two key businesses CSL Behring and Seqirus.

CSL’s in-vivo versus ex-vivo cell and gene therapy (Source: Company Presentation)

CSL gene therapy targets Sickle Cell Disease (CSL200), with high unment need and immune deficiencies such as Wiskott-Aldrich Syndrome (WAS).

Two year post the acquisition of Calimmune, CSL has completed the integration of this new technology into R&D with its first clinical program enrolling patients. CSL also has early stage gene therapy projects under pipeline.

On 13 December 2019, CSL’s stock traded at $278.12, down 0.38%. The market cap of the company was noted at $126.72 billion with 453.87 million outstanding shares. The stock has a P/E ratio of 46.22x, with 0.95% of annual dividend yield.

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