The Food and Drug Administration just approved its most expensive drug ever: a gene therapy for hemophilia Carlisle Companies (CSL) and UniQure (QURE) – and QURE shares rose on Wednesday.
The infusion is approved for hemophilia B patients who are currently on a prevention regimen called Factor IX therapy or who have a history of potentially fatal bleeding or serious bleeding. With a one-time cost of $3.5 million, Carlisle and UniQure hope the drug is a cure.
Analysts say the approval is a best-case scenario for UniQure, the company that initially developed Hemgenix before partnering with Carlisle at later stages. The label does not limit the therapy to a specific group of patients, nor does it contain a “black box” warning.
“Given the uncertainty surrounding hemophilia gene therapy approval and investor caution, we believe this is a major positive for UniQure and an important risk reduction for the story,” UBS analyst Eliana Merle said in a report Wednesday.
In today’s morning stock market trading, QURE stock was up 6.7% to 24.55. That extended the share price from a 7.1% rise on Tuesday. Stocks are now breaking for a buy point at 25.91 from a consolidation, according to MarketSmith.com.
QURE stock: price is above expectations
The $3.5 million price tag is ahead of a recommendation from the Institute for Clinical and Economic Review. The nonprofit said most hemophilia gene therapies would be cost-effective at $2.5 million. The report examined prices between $2 million and $3 million based on executives’ comments.
SVB Securities analyst Joseph Schwartz said the higher-than-expected price is likely to blame for the small hemophilia B patient population. Still, he sees the approval as positive for patients with frequent bleeding episodes and the need for “inconvenient prophylaxis therapy.”
Patients will be monitored for three hours after the Hemgenix infusion. After that, they should be checked weekly for three months to look for possible liver complications. Schwartz notes that preventive treatment with factor IX is usually given weekly.
“We believe these monitoring requirements make sense and will be seen as a valuable sacrifice for the probable liberalization of factor therapy, bleeding and joint damage for a long time to come,” he said in a report.
He has an outperform rating on QURE stocks.
BioMarin also shares Rocket
Under the terms of the agreement, Carlisle will be responsible for the commercialization of Hemgenix. In return, UniQure will receive up to $1.5 billion in additional milestone payments and royalties on sales between 15 and 20%. UniQure also has production rights.
“We view (the) approval as a significant risk reduction to UniQure’s future cash flow potential,” Schwartz said. “We also think this bodes well for the approval potential for BioMarin‘s (BMRN) Roctavian in hemophilia A.”
Shares of BioMarin rose 8.3% to 98.76 after Wednesday’s open. That pushed BioMarin stock to break out of a double bottom with an entry at 92.86.
The approval also likely lends credibility to UniQure’s efforts in other areas of gene therapy. Investors are likely to be more cautious about the company’s work on Huntington’s disease. Three of the 14 patients in the UniQure study experienced serious side effects.
“We note that the Phase 1 and Phase 2 update is still expected in Q2 2023 and could be an informative catalyst for the program with initial functional (targets) data,” said Merle, the UBS analyst.
She has a buy rating on QURE stock and raised her price target from 40 to 42.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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