CVS’s recent announcement that [in its standard drug plan beginning in 2017,] it was [is] replacing Amgen’s Neupogen with a cheaper biosimilar [Novartis’s Zarxio] surprised the stock market. Neupogen and G-CSF biosimilars are a $1.6 billion market in the U.S. alone. Neulasta is bigger.
CVS’s announcement confirmed the market research BeyondSpring has done. BeyondSpring is developing a drug to prevent the same condition, Neutropenia, as Neupogen. Meetings are scheduled with the FDA to review its Neutropenia program. BeyondSpring plans to follow the same protocol utilized by Amgen and the G-CSF biosimilars in their successful Phase 3 trials.
While preparing its regulatory submission BeyondSpring hired a consulting firm for market research. It comes as no surprise that payers seek to minimize the overall cost of patient care. Their advice to BeyondSpring is that it can price its drug equivalent to biosimilar G-CSF’s due to its markedly lower rates of hospitalization. [further describe ims’s findings.] Biosimilars historically have had poor uptake in the U.S. CVS’s decision is a turning point – a big company replacing a branded drug.
Investors know biosimilars do well in Europe. The question has been will biosimilars do well in the U.S.? A change in the mindset of a U.S. payor has been heralded.
BeyondSpring’s drug, Plinabulin, will come along at an opportune time. Plinabulin will be welcomed in the context of the focus on price in addition to it being a drug with better differentiation.
Why It’s Important
Neutropenia is the destruction of white blood cells important for protecting the body against infection. Chemotherapy causes 37 percent of Neutropenia cases.
Patients with Neutropenia are more susceptible to bacterial infections and, without prompt medical attention, this condition can become life threatening. Approximately 20 percent of patients with severe Neutropenia develop serious bacterial infections. Unfortunately, the initial signs of these infections can be difficult to detect because patients that lack an immune response do not show the usual signs of infection such as inflammation or fever. [More than 60,000 patients are hospitalized each year for Neutropenia associated with fever, which can often cause serious infections in Neutropenia patients. Neutropenia leads to death in 9 percent to 18 percent of these cases.
Amgen’s drugs and the GCS-F biosimilars are approved by the FDA for the prevention, rather than the treatment, of chemotherapy caused Neutropenia. A prevention approval might imply that 100 percent of patients who receive chemo would also be prescribed a GCS-F. However only approximately 20 percent are. An expert speculates that some of this prescribing is for treatment, rather than the approved prevention, after a patient has tested for low neutrophils in the blood. Data from Ontario indicates that 40 percent of chemo patients require emergency room hospital visits to treat the effects of Neutropenia. As Ontario and Canada is a single payer system, its data captures the data of all patients.
The Small Molecule Advantage
BeyondSpring’s drug, Plinabulin, is a small molecule with a relatively straight-forward three-step synthetization process to manufacture. As such the Company will enjoy a cost advantage compared to biologics. Amgen’s Neupogen and the G-CSF biosimilars including Novartis’s Zarxio are biologics.
Conclusion
CVS’s action to manage costs by using a biosimilar may be followed by like actions from other payors. BeyondSpring’s market research indicates payor interest in a new drug with the profile of lower hospitalization at similar prices of the G-CSF biosimilars for Neutropenia.
CVS’s announcement confirmed the market research BeyondSpring has done. BeyondSpring is developing a drug to prevent the same condition, Neutropenia, as Neupogen. Meetings are scheduled with the FDA to review its Neutropenia program. BeyondSpring plans to follow the same protocol utilized by Amgen and the G-CSF biosimilars in their successful Phase 3 trials.
While preparing its regulatory submission BeyondSpring hired a consulting firm for market research. It comes as no surprise that payers seek to minimize the overall cost of patient care. Their advice to BeyondSpring is that it can price its drug equivalent to biosimilar G-CSF’s due to its markedly lower rates of hospitalization. [further describe ims’s findings.] Biosimilars historically have had poor uptake in the U.S. CVS’s decision is a turning point – a big company replacing a branded drug.
Investors know biosimilars do well in Europe. The question has been will biosimilars do well in the U.S.? A change in the mindset of a U.S. payor has been heralded.
BeyondSpring’s drug, Plinabulin, will come along at an opportune time. Plinabulin will be welcomed in the context of the focus on price in addition to it being a drug with better differentiation.
Why It’s Important
Neutropenia is the destruction of white blood cells important for protecting the body against infection. Chemotherapy causes 37 percent of Neutropenia cases.
Patients with Neutropenia are more susceptible to bacterial infections and, without prompt medical attention, this condition can become life threatening. Approximately 20 percent of patients with severe Neutropenia develop serious bacterial infections. Unfortunately, the initial signs of these infections can be difficult to detect because patients that lack an immune response do not show the usual signs of infection such as inflammation or fever. [More than 60,000 patients are hospitalized each year for Neutropenia associated with fever, which can often cause serious infections in Neutropenia patients. Neutropenia leads to death in 9 percent to 18 percent of these cases.
Amgen’s drugs and the GCS-F biosimilars are approved by the FDA for the prevention, rather than the treatment, of chemotherapy caused Neutropenia. A prevention approval might imply that 100 percent of patients who receive chemo would also be prescribed a GCS-F. However only approximately 20 percent are. An expert speculates that some of this prescribing is for treatment, rather than the approved prevention, after a patient has tested for low neutrophils in the blood. Data from Ontario indicates that 40 percent of chemo patients require emergency room hospital visits to treat the effects of Neutropenia. As Ontario and Canada is a single payer system, its data captures the data of all patients.
The Small Molecule Advantage
BeyondSpring’s drug, Plinabulin, is a small molecule with a relatively straight-forward three-step synthetization process to manufacture. As such the Company will enjoy a cost advantage compared to biologics. Amgen’s Neupogen and the G-CSF biosimilars including Novartis’s Zarxio are biologics.
Conclusion
CVS’s action to manage costs by using a biosimilar may be followed by like actions from other payors. BeyondSpring’s market research indicates payor interest in a new drug with the profile of lower hospitalization at similar prices of the G-CSF biosimilars for Neutropenia.
