Novartis, the Swiss drugmaker, in its fourth-quarter earnings reported a jump of 9 per cent in sales, raking in $12.4 billion and the company attributes the positive numbers to the sale of its new gene therapy drug Zolgensma, and four other drugs released in 2019.
Chief Executive of the company, Vas Narasimhan, said in a press statement that strong 2019 sales growth drove double-digit increases in core operating income and free cash flow. “We launched an unprecedented five new molecular entities (new medicines) in 2019 and advanced the breadth of early programs in our pipeline that address significant unmet needs.”
Novartis Posts Sales Growth
In the fourth quarter, Zolgensma, the spinal muscular atrophy (SMA) gene therapy drug, generated $186 million in sales. Analysts expected the sales to touch $177 million, up from the $160 million that the drug made in the last quarter.
Zolgensma is the most expensive drug out there with a price of $1.2 million for a one-time treatment. It was officially launched in the US in June of last year.
Insurance policies now cover 97% of Zolgensma commercial patients, and Medicaid covers 50 per cent against 90 and 30 per cent respectively, in the earlier quarter. In the earnings call on January 29, Narasimhan said that they intended to treat over 100 patients in each quarter of 2020, especially infants below 6 months. Newborn SMA screening will be used to help patients as early as possible.
To facilitate payments, the company has proposed installment payments for Zolgensma, but it has not gained any wide acceptance, according to the company. Narasimhan said, “We have not seen material uptake of installment-based payments at all.”
Gene Therapy Drug - A Clear Winner!
The company is offering refunds when the drug fails to work, which has not happened so far, claims the company. Zolgensma at the moment is approved only for IV administration and that also in patients below 2 years. Novartis is trying to expand its application to older patients with intrathecal dosing, which is administrating the medicine into the spinal canal. Once it is approved, then it can be given to older patients. Narasimhan said the drug sales performance will improve with it gaining regulatory approval both in Europe and Japan. It is expected to pass scrutiny by both in mid-2020.
Novartis has been under the scrutiny of the US Food and Drug Administration for fudging data on the earlier animal studies of Zolgensma. This scrutiny has not stopped it from being marketed. Zolgensma is the first approved gene therapy medicine to treat the rare devastating disease that affects the muscles, mostly in children, and timely intervention can prevent death in most cases. It is single-dose treatment at the gigantic cost of $1.2 million but seems to be worth its price going by the sales numbers. And most gene therapy drug manufacturers are emboldened by the high price acceptance, though it seems only government intervention and insurance coverage in some form will help laypersons get access to such treatments.