Novartis considers new sales model for experimental cancer therapy

Dr. Usman Azam, global head of the cell and gene therapies unit at Novartis Pharmaceuticals, talks with Dr. Lilli Petruzzelli, vice president of translational clinical oncology at the Novartis Institutes for BioMedical Research, at an event in Boston in April. 

Novartis plans to use a medical device-like sales model to market its CAR T-cell technology if the experimental cancer treatment receives FDA approval, the head of its gene therapy program said.

That strategy may help stem concern about the therapy's complicated distribution process as well as the anticipated high prices for treatment.

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The drugmaker has said it plans to file a biologics license application for the therapy, CTL019, with the FDA early next year for an indication for pediatric acute lymphoblastic leukemia, an orphan disease, before seeking expanded indications for adult lymphoma and other cancers.

“We're creating the model we think is right,” said Dr. Usman Azam, global head of the cell and gene therapies unit at Novartis Pharmaceuticals.

That model will take a similar approach to one used by manufacturers of implanted medical devices, according to Azam. In this model, the manufacturer's sales representative functions like a resource to the physician, often sitting in on surgeries and providing education and training.

With CAR-T therapy, Novartis believes there's no need for detailing, Azam said. What it does require, though, is peer-to-peer training for the physician.

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Most of the research and testing involving CAR-T therapies is already taking place in academic medical centers, and Novartis has partnered with the University of Pennsylvania to develop CTL019. “That makes sense,” David Nierengarten, a research analyst for Wedbush Securities, said about Novartis mimicking a device sales model for CTL019. “It's the nature of the product.”

In 2015, Novartis purchased a cell manufacturing facility in Morris Plains, New Jersey, and has plans to develop centers in Europe and Japan, as well.

"If the CAR-T represents a cure, you're going to get a premium price."

David Nierengarten, a research analyst for Wedbush Securities

Analysts and investors view chimeric antigen receptor (CAR) T-cell therapy as a promising new approach to treating cancer. When patients undergo CAR-T treatment, their immune cells are removed, frozen and sent to a manufacturing facility, where they are reengineered and then mailed back to the patient and reinserted into his or her body. The reengineered cells are expected to recognize and attack cancer cells that express specific proteins.

In a Phase II clinical trial of pediatric patients with acute lymphoblastic leukemia who were given Novartis's CTL019, 93% of those patients had no detectable cancer after 28 days.

Despite the promise, the therapy has some risks: it's expected to be costly, it's unproven at this time, and it will require companies to operate multiple cell manufacturing facilities. In addition, side effects include cytokine release syndrome and the potential for patients to relapse, and these remain concerns.

Azam declined to provide pricing estimates but noted that the cost of a bone-marrow transplant, a procedure often used for ALL patients, can cost between $350,000 and $1.2 million.

“The process of modifying patients' immune cells is complex, and scaling up the manufacturing of modified T-cells remains a challenge,” Novartis said in its 2015 annual report. “Therapies like these have the potential to transform the treatment of disease.”

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Dendreon's Provenge, a prostate-cancer therapy considered at one time to be a pioneer in the field, failed despite blockbuster expectations. Analysts attributed its failure to some of the same challenges facing developers of new experimental CAR-T therapies. Its sales were also rapidly eclipsed by the market arrivals of Astellas Pharma's Xtandi and Johnson & Johnson's Zytiga, which are sold as pills.

“A scientific advance of such magnitude has, naturally, been accompanied by untempered enthusiasm from investors desperate to jump into ‘the next big thing,'” EP Vantage analysts wrote in a January 2015 report about CAR-T therapies. “Much potential lies in CAR therapy. However, with investors willing to value such early-stage technologies at such huge valuations, it is clear that important risks are being ignored.”

Still, Novartis and other developers including Juno Therapeutics and Kite Pharma continue to pursue development of CAR-T therapies, spurred on by the billions of dollars that investors are pouring into these companies. Juno, Kite, and Bellicom, another developer of CAR-T therapies, all filed for IPOs in 2014. A few months after Juno's IPO, Celgene invested $1 billion in the company.

With the exception of Novartis and now Celgene, most traditional drugmakers that have bet on CAR-T therapies have done so without taking too many risks. Pfizer in 2014 gained exclusive rights to Cellectis's experimental CAR-T technology, for an upfront fee of $80 million, and Amgen a year later announced a research and licensing agreement with Kite Pharma.

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Amgen CEO Robert Bradway described the technology's development phase as in its early days during remarks he made at Partners Healthcare's World Medical Innovation Forum in Boston in April, noting that “some of the logistical issues are ones that needed to be worked through” but later added that the field remained an “attractive, exciting area.”

Even with investor support, the therapy's efficacy also remains up for debate, as does the question of scalability when it comes to the manufacturing process. Getting CAR-T technology to patients requires multiple steps — the cells must be removed, frozen, reengineered, and infused — and that will likely mean higher prices. For now, investors are waiting for the next batch of clinical data to determine the market value of the therapies.

“If the CAR-T represents a cure, you're going to get a premium price,” Wedbush's Nierengarten said. “It's hard to say in isolation. Are payers goings to balk? We need to see the efficacy [data] first.”