SVB Leerink believes the news is a "meaningful positive" for Ionis Pharmaceuticals/Biogen's Spinraza and Roche/PTC Therapeutics' risdiplam
Shares of Regenxbio (RGNX) are under pressure on Wednesday as partner Novartis' (NVS) bid to expand its Zolgensma to more spinal muscular atrophy patients faces a possible delay after the Food and Drug Administration requested another study in older children getting the drug via a spinal infusion. The FDA recommended a pivotal confirmatory study to supplement the existing STRONG data and further support the regulatory submission for AVXS-101 IT, Novartis said. SVB Leerink estimates that this additional pivotal study will cause about a two-year delay to launch of intrathecal Zolgensma from the firm's previous estimates of approval in early 2022.
CONFIRMATORY STUDY: Novartis said it has recently received feedback from the U.S. Food and Drug Administration following their review of data from the STRONG study of the intrathecal, or IT, formulation of AVXS-101 in older patients with spinal muscular atrophy, or SMA.
"The FDA has acknowledged the potential of AVXS-101 IT in this patient population and recommends a pivotal confirmatory study to supplement the existing STRONG data and further support the regulatory submission for AVXS-101 IT. This guidance provides clarity on the path to registration for AVXS-101 IT. Trial design and other details are being evaluated and a comprehensive update on the overall Novartis SMA clinical development program will be provided at a future time following further discussions with health authorities. This request for a study is unrelated to the partial clinical hold on AVXS-101 IT, and the new study will not be initiated in the U.S. until the hold has been lifted by the FDA. Novartis Gene Therapies remains confident in the overall benefit-risk profile for patients on treatment. This does not impact marketed Zolgensma and the company continues to advance its regulatory filings and intravenous clinical studies," the company stated.
IONIS' SPINRAZA TO BENEFIT FROM DELAY: Commenting on the news, BMO Capital analyst Do Kim said he believes the delay is a positive for Ionis Pharmaceuticals' (IONS) Spinraza, pushing out additional competition in the larger late onset population and potential launch beyond 2023. The analyst expects limited near-term impact from Zolgensma given the restricted label, with sales driven primarily by newborn infants. In addition, with 40% of patients from Zolgensma's Phase 1 OLE study currently on Spinraza, he believes this is indicative of the limited active switching. He also expects Biogen (BIIB) to initiate a Phase 4 study evaluating Spinraza in SMA patients with a suboptimal response to Zolgensma in the first quarter of 2021, with new Type 1 patients as upside to our estimates. Kim has an Outperform rating and $86 price target on Ionis Pharmaceuticals.
'PAINFUL NEGATIVE' FOR REGENXBIO: SVB Leerink estimates that the additional confirmatory pivotal study for the regulatory submission of intrathecal Zolgensma in Spinal Muscular Atrophy, intended to supplement data from the STRONG study, will cause a 2-year delay to launch of intrathecal Zolgensma from previous estimates of approval in early 2022. The confirmatory trial requirement is unrelated to the partial clinical hold, which remains in place and could delay the confirmatory study initiation and enrollment, potentially pushing the launch out further, the firm added. SVB Leerink believes these developments are a meaningful positive for Ionis Pharmaceuticals/Biogen's Spinraza and Roche (RHHBY)/PTC Therapeutics' (PTCT) risdiplam as they limit competition in older SMA patients to these two agents, and a "painful negative" for Regenxbio, with limited years of life remaining in the patents underlying the royalty stream on Zolgensma. The firm expects Ionis shares to trade up in relief and Regenxbio shares to be down sharply.
PRICE ACTION: In afternoon trading, shares of Regenxbio have dropped about 2.5% to $28.18, while Novartis' stock has slipped over 1% to $87.95. Also lower, shares of Ionis have slid 1% to $50.27.
Keywords: zolgensma, spinraza, risdiplam, spinal muscular atrophy, FDA