BIVV/Roche/SHPG/NVO: Hemlibra global sales potential $3.0 – $5.2B; reduces global factor VIII demand by 25-55%, bypass agent demand by 90+%

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Richard Evans / Scott Hinds
203.901.1631 /.1632
revans@ / shinds@ssrllc.com
@SSRHealth
February 26, 2018

BIVV/Roche/SHPG/NVO: Hemlibra global sales potential $3.0 – $5.2B; reduces global factor VIII demand by 25-55%, bypass agent demand by 90+%

  • We see $3.0B to $5.2B in global sales potential for Roche’s Hemlibra, as compared to $2.9B consensus
  • We estimate that over 90% of bypass agent demand (NovoSeven/NVO, FEIBA/SHPG) is attributable to severe Hemophilia A patients with inhibitors, very nearly all of whom are likely to shift to Hemlibra
  • Patients without factor VIII inhibitors might still choose to manage their conditions on traditional factor VIII infusions, but at the cost of multiple weekly IV infusions and more breakthrough bleeds, as compared to weekly, bi-weekly or even monthly subcutaneous dosing and fewer breakthrough bleeds on Hemlibra. Our conservative Hemlibra uptake assumption for these patients reduces total factor VIII demand by 25%, our high case reduces factor VIII demand by 55%
  • The impact of Hemlibra on bypass agents and factor VIII stands to reduce sales at BIVV by 16-34%, at SHPG by 11-17%, and at NVO by 8-9%
  • Human testing of gene therapy approaches to Hemophilia A are limited to adult patients without inhibitors to factor VIII, and without antibodies to the antiviral vector; this limits these therapies to roughly 38% of the current patient population. In our medium Hemlibra uptake scenario, just 26% of Hemlibra patients would meet the criteria for any of the gene therapies currently in human testing

Summary

We see global Hemlibra sales potential of $3.0B to $5.2B, as compared to consensus expectations of $2.9B. Hemlibra should reduce demand for bypass agents (NovoSeven/NVO, FEIBA/SHPG) by as much as 90%, and for factor VIII products by 25% to 55%. BIVV stands to lose 16-34% of global sales; SHPG stands to lose 11-17%, and NVO 8-9% as a direct result of competition from Hemlibra. Company guidance (SHPG) appears to underestimate the speed and degree of impact from Hemlibra, as do consensus estimates for all three firms

The greatest competitive threat to Hemlibra is from gene therapy: recent approaches from BMRN and ONCE have shown astonishing results in patients with Hemophilia A. However, all gene therapy approaches in clinical testing for Hemophilia A are limited to adult patients without inhibitors to factor VIII and without antibodies to the viral vector (AAV), meaning these approaches are applicable to only about 38% of patients. Only one of these approaches (BMRN’s BMN-270) has reached phase 3

Our estimates reflect an assumption of zero-sum competition for currently treated Hemophilia A patients, which hopefully proves to be too conservative. Globally, only about one-quarter of Hemophilia A patients are adequately treated; drug costs definitely are a factor, but so are the complexities of therapy (need for multiple weekly intravenous infusions, and careful monitoring of patients’ clotting activity; frequent occurrence and related management of breakthrough bleeds). As a drug that meaningfully reduces bleeding episodes and can be administered subcutaneously – currently once weekly but potentially once monthly – Hemlibra carries the potential to democratize the treatment of Hemophilia A in geographies where proper therapy is otherwise impossible

Background

Hemophilia A is a genetic condition that leads to inadequate production of clotting factor VIII, and affects approximately 1/5,000 live male births. Roughly two-thirds of patients with the genetic deficiency are affected severely, defined as having factor VIII activity levels below 1% of normal

Standard treatment for Hemophilia A is replacement of factor VIII, either prophylactically (given routinely to prevent bleeding episodes) or episodically (given only to control bleeding episodes as they occur). The more severely affected the patient the more likely they are to require ongoing prophylactic administration of factor VIII; patients with moderate to mild Hemophilia A may be able to get by on episodic factor VIII treatments

Because many severely affected patients produce no factor VIII, they may recognize administered factor VIII as foreign, and develop an immune response that inhibits factor VIII activity. This occurs in about 30% of severely affected Hemophilia A patients. About half of those with inhibitors will have high inhibitor levels that are prolonged, the remainder will have lower inhibitor levels that may be transient

The presence of inhibitors reduces or even eliminates the efficacy of factor VIII, therefore unless patients with high inhibitor levels can have their inhibitor levels successfully reduced, these patients can only achieve clotting control using agents that ‘bypass’ factor VIII’s role in the clotting cascade. Two bypass agents are in routine use, factor VII (NovoSeven, made by NVO), and anti-inhibitor coagulant complex (FEIBA, made by SHPG)

Hemlibra

Roche recently developed and received approval for emicizumab (Hemlibra), a monoclonal antibody that is antigenically distinct[1] from factor VIII, but that can nevertheless carry out the essential role of factor VIII[2]. Hemlibra dramatically reduced the incidence of bleeding episodes in severe Hemophilia A patients with inhibitors, as compared to bypass agents[3]. As a result, we expect very nearly all such patients to switch from bypass agents to Hemlibra within the next two years

Global net sales of bypass agents totaled $2.2B in 2017 (Exhibit 1). These agents are used in patients with either Hemophilia A or Hemophilia B; Hemlibra will only affect demand from patients with Hemophilia A. The National Hemophilia Foundation estimates about 16,000 US persons with Hemophilia A, as compared to 4,000 with Hemophilia B. The incidence of inhibitor development is far greater in Hemophilia A (about 30%) than in Hemophilia B (less than 5%); this implies that roughly 96% of patients requiring bypass treatment because of factor inhibitors have Hemophilia A. Because most Hemophilia A patients with significant inhibitor levels are likely to move to Hemlibra, we see corresponding drops in demand for the bypass agents FEIBA and NovoSeven. NovoSeven also is used in patients with factor VII deficiency, however these patients are extremely rare (1/500,000 live births for factor VII deficiency, as compared to 1/5,000 live male births for factor VIII deficiency)

Roche is also developing Hemlibra for severely affected type A patients without inhibitors, which raises the questions of whether and to what degree Hemlibra might displace these patients’ use of factor VIII. As currently approved Hemlibra is injected subcutaneously once weekly; by comparison factor VIII typically is given by intravenous infusion roughly three times weekly when used prophylactically. Beyond the obvious inconveniences of multiple weekly infusions, Hemophilia A patients often suffer further from complications of intravenous administration, making the once weekly sub-Q dosing of Hemlibra even more attractive as compared to multiple weekly IV doses of factor VIII. And, Roche is developing every other week and once-monthly subcutaneous doses of Hemlibra, compounding the dosing advantage

Roche has completed its pivotal trial (HAVEN 3) of Hemlibra in Hemophilia A patients without inhibitors to Factor VIII; according to top-line results[4] Hemlibra was superior to factor VIII, whether factor VIII was dosed episodically or prophylactically. And, Hemlibra was shown to be effective on a bi-weekly dosing schedule

We estimate approximately 9,600 US patients with severe Hemophilia A, of which 6,720 have no inhibitors, 1,440 have low inhibitor levels, and 1,440 have high inhibitor levels (Exhibit 2). On the strength of Hemlibra’s performance against bypass agents, there’s little doubt that the majority of severely affected patients with high inhibitor levels wind up on Hemlibra; we assume between 90% and 100% of these patients are treated with Hemlibra across our low, medium, and high uptake scenarios. Unlike severely affected patients with high inhibitors, patients with low inhibitors can achieve hemostasis with factor VIII, though at much higher average factor VIII doses, and with the considerable inconvenience and morbidity associated with multiple weekly IV infusions. We assume that between 50% and 80% of these patients are treated with Hemlibra across our range of Hemlibra uptake scenarios. Severely affected patients with no inhibitors can achieve hemostasis with factor VIII at ‘normal’ doses; however HAVEN 3 shows that Hemlibra is more effective than factor VIII in these patients, plus the advantage of Hemlibra’s (biweekly in one arm of HAVEN 3) subcutaneous dosing

Despite better efficacy and far more convenient dosing for Hemlibra as compared to factor VIII, there are potential tradeoffs in patients with low or no inhibitors. Hemlibra’s mechanism of action distorts traditional laboratory tests of patients’ clotting status, so patients and clinicians accustomed to these precise measures when using factor VIII or bypass agents must contend with flying blind with Hemlibra. And, where factor VIII’s half-life is measured in ‘teens’ of hours, Hemlibra’s is far longer. This obviously is good from the perspective of Hemlibra’s longer dosing interval, but a potential negative in patients who may need bypass agents to supplement Hemlibra in the event of bleeding episodes. Because Hemlibra distorts the lab tests used to titrate bypass agents, clinicians lose fine control over bypass agent dosing. And, in a pivotal Hemlibra trial, patients on Hemlibra who received bypass agents experienced adverse events, though it’s not clear whether these were due to overdosing of bypass agents, or to some other interaction between Hemlibra and bypass agents

On balance, we believe better efficacy and wildly better dosing convenience will drive uptake of Hemlibra in severe patients without inhibitors. We assume a range of 20% to 50% uptake in these patients across our Hemlibra uptake scenarios

Assuming a typical patient weight of roughly 56kg (Exhibit 3), Hemlibra dosing of 6 mg/kg month (total monthly dose is independent of frequency of dosing), and WAC pricing / mg of $99.20, we expect US list price sales of Hemlibra to range from $1.5B (low Hemlibra uptake scenario) to $2.6B (high uptake, Exhibit 2, again)

Note that Exhibit 2 also provides the corresponding reductions in factor VIII demand that would result from Hemlibra uptake. We see US factor VIII unit demand declines ranging from 25% (low Hemlibra uptake) to 55% (high uptake). US sales of products used in Hemophilia A are about half the global total. We believe the uptake patterns we’ve applied to US patients in Exhibit 2 will be mirrored outside the US; accordingly, we see global sales potential for Hemlibra ranging from $3.0B to $5.2B, expect global declines in factor VIII unit demand ranging from 25% to 55%, and expect the use of bypass agents to fall by 90% or more

Impact of declining factor VIII and bypass agent demand, by company

BIVV’s factor VIII product (Eloctate) accounts for 62% of total company sales. Our low Hemlibra uptake scenario implies a 25% reduction in global factor VIII demand, corresponding to a 16% reduction in total company sales. Our high Hemlibra uptake scenario implies a 55% reduction in global factor VIII demand, corresponding to a 34% decline in total company sales (Exhibit 4)

SHPG has $2.9B in global factor VIII sales (20% of total company), and $828 in global inhibitor (FEIBA) sales (5.7% of total company). Our low Hemlibra uptake scenario implies a roughly 90% reduction in FEIBA and a 25% reduction in factor VIII, implying an 11% reduction in total company revenues. Our high Hemlibra uptake scenario implies that nearly all (circa 96%) of FEIBA demand is lost, and that factor VIII demand falls by 55%; this corresponds to a 17% reduction in total company revenues. SHPG has guided to roughly 50% FEIBA and 30% factor VIII erosion by 2022[5]; this corresponds to an 8.9% reduction in total company revenues, roughly consistent with our low Hemlibra uptake scenario in terms of the degree of impact, but more conservative than our assumptions with respect to timing (we believe much of Hemlibra’s impact unfolds within two years). Consensus estimates lack full product level detail for SHPG’s hematology franchise; however, consensus for SHPG’s key factor VIII brand (Adynovate) reflect anticipated growth (from $235M in ’18 to $360M in 2022)

NVO is next most affected from Hemlibra, having $1.4B in global factor VII (NovoSeven) sales and $173M in global factor VIII (NovoEight) sales, representing 8% and 1% of total company sales respectively. Because all of our Hemlibra uptake scenarios imply the near elimination of demand for bypass agents, and because most of NVO’s hemophilia sales are in the bypass agent NovoSeven, all of our Hemlibra scenarios imply a +/- 8% loss of revenues for NVO

We estimate that factor VIII products (Afstyla, Helixate, Monoclate) account for roughly 7% of total company sales for CSL Limited (CMXHF, CSLLY); our Hemlibra uptake scenarios imply total company sales reductions of between 2% and 4%

Bayer’s factor VIII products (Kogenate / Kovaltry) account for roughly 6% of the global company’s pharmaceutical sales, and roughly 3% of global sales across all divisions. We expect factor VIII demand to fall between 25% and 55%, implying global pharmaceutical sales losses for Bayer of roughly 1.5% to 3%, or between 1% and 2% across all global divisions

PFE’s factor VIII products (Refacto / Xyntha) account for roughly 1% of total company revenues, as such the fall in factor VIII demand implied by our Hemlibra scenarios are not meaningful to total company performance

Developmental approaches to Hemophilia A

Gene therapy

Hemophilia A is an X-linked recessive trait in which sufficient production of factor VIII is absent. As such the simple objective of gene therapy is to replace lost production. The hemophilias are especially attractive targets for gene therapy since replacing lost production can be curative, and since production of excess clotting factor is unlikely to cause problems (supranormal levels of factor VIII do not result in excess clotting, all else equal; and, inserting a gene whose production is unregulated is far simpler than inserting a gene whose output must be limited). At least four gene therapy approaches are in human testing, one each from BMRN, ONCE, SGMO and SHPG

Each of these companies’ current approaches involve delivery of ‘correct’ factor VIII genetic code via adeno-associated virus (AAV). These approaches result in factor VIII genes that live in the cytoplasm rather than in the cell nucleus, and which are independent of the patient’s chromosomes. As such cells implanted with the factor VIII gene will not pass the factor VIII gene onto their progeny when they divide. Because of this, these approaches are only suitable for adult patients. Adult patients’ livers (the target organ for factor VIII gene uptake via AAV) are relatively stable, meaning the percent of cells that successfully take up the factor VIII gene may remain nearly constant for a significant number of years. In contrast, younger patients’ livers are actively growing, so the percent of cells that carry the factor VIII gene declines as these patients mature. Giving these patients subsequent rounds of gene therapy as they mature is complicated by the fact that they will almost certainly have developed antibodies to the AAV vector during the initial gene therapy. More than 40% of Hemophilia A patients are under the age of 20[6]. SGMO’s hemophilia approach in human testing (SB-525) is subject to all of these limitations; however, the company has successfully tested a zinc-finger nuclease (ZFN) based approach in mice[7] which results in the factor VIII gene being integrated into the chromosomal DNA of the targeted liver cells.

A second-limitation of current approaches is that roughly 60% of the population has pre-existing antibodies to AAV[8]. Most of these antibodies will be to ‘wild-type’ AAV found in nature, and because the structure of the AAV viral capsid can be genetically engineered, it’s possible to select for capsids to which a smaller proportion of the population has active antibodies. BMRN claims that roughly 10% of persons have pre-existing antibodies to the AAV variant used in its current lead approach (BMN-270)

A final limitation to the current approaches – and perhaps to gene therapy of Hemophilia A overall – is that patients with inhibitors to factor VIII are not candidates for treatment, simply because their inhibitors would eliminate the therapeutic effect of the factor VIII produced. About 30% of Hemophilia A patients have inhibitors to factor VIII

Because of these limitations, the current gene therapy approaches in human testing are viable for only about 38% of patients with Hemophilia A[9]

Only BMRN (BMN-270) is in phase 3. The two BMN-270 trials have a primary completion date of December 2022; however, this date likely reflects the timing necessary for the secondary endpoint of longer term efficacy; other (primary and secondary) endpoints are reached after 52 weeks of treatment, implying that most results will be available by mid-2020. BMN 270 was highly effective in a phase 1/2 trial[10]

ONCE has disclosed positive preliminary results[11] from its phase 1/2 dose-escalation trials of SPK-8011. Sangamo began its phase 1/2 trial of SB-525 in August of 2017. SHPG is recruiting for its phase 1/2 study of SHP 654 (previously BAX 888), which has an anticipated start date of March 2018. All current Hemophilia A gene therapy trials are limited to adult patients without inhibitors, and without antibodies to relevant AAV serotypes

Other drugs in development

ALNY’s fitusiran is an inhibitor of anti-thrombin. Thrombin is an essential component of blood clot formation, and anti-thrombin acts as a counterbalance to thrombin. By reducing anti-thrombin formation, fitusiran allows the limited amounts of thrombin activity present in patients with hemophilia (A or B) to produce more of a clotting effect. An inherent challenge to this approach is that thrombin and anti-thrombin levels need to be balanced in order for clotting activity also to be balanced. Patients on fitusiran who experience a bleeding episode must take smaller doses of factor (VIII or IX) or bypass agent to control the episode, and if they take too much can produce pathological levels of clotting activity. In a recent phase 2 study one fitusiran patient died from pathological clotting; the trial was suspended in September of 2017 but subsequently allowed to proceed. There are two phase 3 trials underway, with primary completion dates of June 2019 and December 2019. Fitusiran is administered by subcutaneous injection

NVO is developing concizumab, an anti-tissue factor pathway inhibitor (anti-TFPI). TFPI regulates the initiation of the clotting cascade, thus limiting the effect of TFPI is pro-thrombotic. Animal models with limited TFPI functionality often display pathology from excessive clotting[12]. Because of this dosing of concizumab will have to be especially precise, as will dosing of clotting factor or bypass agents in patients taking concizumab. Concizumab is administered by subcutaneous injection. Phase 2 trials are ongoing, with primary completion dates of June 2018 and August 2018

PFE also is developing an anti-TFPI (PF-06741086); the compound is in phase 2 testing with a primary completion date of November 2018. Both subcutaneous and IV infusion dosing forms are being tested

 

  1. Meaning inhibitors to factor VIII will neither recognize nor inhibit Hemlibra 
  2. Which is to serve as a cofactor to clotting factor IXa, leading to the activation of clotting factor X 
  3. http://www.nejm.org/doi/full/10.1056/NEJMoa1703068 
  4. https://www.roche.com/media/store/releases/med-cor-2017-11-20b.htm 
  5. http://investors.shire.com/~/media/Files/S/Shire-IR/quarterly-reports/2018/full-year-2017-presentation.pdf 
  6. http://www.bloodjournal.org/content/bloodjournal/96/2/437.full.pdf 
  7. https://www.ncbi.nlm.nih.gov/pubmed/26297739 
  8. Boutin S, Monteilhet V, Veron P, et al. Prevalence of serum IgG and neutralizing factors against adeno associated virus (AAV) types 1, 2, 5, 6, 8, and 9 in the healthy population: implications for gene therapy using AAV vectors. Hum Gene Ther. 2010;21(6):704–712. 
  9. 60% of patients are adults * 90% without AAV antibodies * 70% without inhibitors to factor VIII 
  10. http://www.nejm.org/doi/full/10.1056/NEJMoa1708483 
  11. https://ash.confex.com/ash/2017/webprogram/Paper108679.html 
  12. http://www.bloodjournal.org/content/bloodjournal/123/19/2934.full.pdf 

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