Novartis (NVS) announced that it had filed and the FDA had accepted its biologics license Application (BLA) for its Wet age-related macular degeneration drug brolucizumab (RTH258). This will be a major milestone for the company, because it will go after a very large market opportunity. The risk is that the space is currently dominated by Regeneron Pharmaceuticals (REGN) with its drug Eylea. In addition, other hurdles exist like having to counter multiple gene therapy biotechs that are developing their own Wet AMD products.
BLA On Track With Year-End Approval
This is big news for Novartis, which is looking to enter the ever growing Wet AMD space. Wet AMD is a disease characterized by vision loss and potential blindness. It occurs because of abnormal blood vessels that end up rupturing, causing blood to leak into the macula of the eye. I believe that there is a good chance for Novartis to generate a lot of revenue in this space. Especially, when it is estimated that there will be roughly between 1.5 million and 1.75 million people in the U.S. alone living with Wet AMD. The global market opportunity for Wet AMD is expected to reach $10.4 billion by 2024. Novartis is really wanting to get into this space, so much so that it chose to use one of its priority review vouchers. A priority review voucher is used when a pharmaceutical company wants to retain an expedited review time for one of its submitted drugs for FDA approval. The downside is that if the FDA decides to reject brolucizumab, Novartis loses its priority review voucher. The good news is that it greatly speeds up review time. Matter of fact, with the priority review voucher, it expects to receive FDA approval for the brolucizumab in Wet AMD by the end of 2019. Without the voucher being used, the FDA wouldn’t have likely reviewed the drug until Q2 of 2020. That buys a huge lead time for being able to market the drug against a host of competitors as soon as possible.
Competition Stemming From Multiple Angles
This is where a lot of competitors come in to play at multiple angles. By that I mean different types of technologies being used to treat Wet AMD. For instance, you have several biologic products that target VEGF. Then you have new and upcoming gene therapies that are also being developed to treat these patients. One such company developing a gene therapy for Wet AMD is known as Adverum (ADVM). Adverum is developing its product known as ADVM-022. What’s interesting about this gene therapy company is that it is using a proprietary cassette of Eylea into an Adeno Associated Virus (AAV) capsid. The goal is to be able to use a single injection of ADVM-022 and treat a patient for a long period of time, without the need for multiple Eylea injections. The downside for Adverum is that it is currently under a clinical hold, but I believe it will rectify those issues promptly. Eylea is a Wet AMD drug developed and marketed by Regeneron Pharmaceuticals. It has been the mainstay treatment for Wet AMD for a long time. There are many biotechs that are looking to capitalize on this large market. Another gene therapy company developing its own drug for this space is Regenxbio (RGNX). It is developing its gene therapy clinical candidate known as RGX-314. This RGX-314 utilizes a NAV AAV8 vector that contains a gene encoding for a monoclonal antibody fragment. Like other Wet AMD drugs, the protein was developed to counter vascular endothelial growth factor (VEGF) function. In essence, the VEGF pathway is important for the formation of abnormal blood vessels and the accumulation of retinal fluid. That’s why anti-VEGF products are needed to counter this issue. However, gene therapies are looking for a long-term approach. In essence, issuing the correct gene in place to work continuously as opposed to needing multiple injections to keep anti-VEGF activity in place.
The FDA accepting the BLA for brolucizumab is very good news for Novartis. It will allow it to enter a very large market space. It won’t be easy though, because of competition. Multiple biotechs working on developing a Wet AMD product will pose a threat to Novartis. First, Novartis has to penetrate the market in which Regeneron has held quite well with Eylea. Then Novartis also has to worry on the gene therapy front. Gene therapies are starting to show that they not only work in animals, but are starting to make substantial game-changing progress in humans. A gene therapy can be given once as a “one off” treatment for a 2-year period. I believe such a treatment, if successful in doing so, would be superior to treatments that have to be given once every 12 weeks. However, gene therapy is still in its infancy. It remains to be seen if a long response in Wet AMD patients can be achieved with only a single gene therapy treatment. Modifications of dosing and other measures will be needed to keep a prolonged response. I believe that Novartis will have a good lead time over these gene therapies in development, especially because approvals for these types of products are still a few years away. Considering the data, plus the non-inferiority study with Eylea that was completed, I believe Novartis will do well on the market if it receives FDA approval.
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