The biggest industry news of the week came not from the J.P. Morgan Healthcare Conference or any associated announcements, but from Washington, D.C, where the Centers for Medicare & Medicaid Services proposed to limit coverage of Biogen’s new Alzheimer’s drug only to patients who enroll in clinical trials.
The decision set off alarm bells at the powerful drug lobby PhRMA, which quickly posted a blistering response, and sent shares in Biogen tumbling Wednesday. Also impacted were Eli Lilly and Roche, which are developing would-be competitors to Biogen’s drug.
While Roche presented earlier at the meeting, CMS’ timing was awkward for Lilly CEO David Ricks, who took the J.P. Morgan meeting’s virtual main stage Tuesday afternoon just 15 minutes after the announcement. But, questioned by an analyst at the investment bank, Ricks struck an optimistic note.
More on his comments, as well as on a brewing battle in gene editing and a big year for one of gene therapy’s most well-known companies.
Lilly caught up in Biogen’s bad news
CMS’ decision, if finalized later this year, would throw up another significant hurdle to adoption of Biogen’s Alzheimer’s drug, which a number of high-profile academic and medical centers have refused to administer. Some commercial insurers, meanwhile, had held off making coverage decisions until they saw Medicare’s approach.
The proposed policy would apply to other drugs that work like Aduhelm, three of which are in late-stage development by Lilly, Roche and Biogen’s partner Eisai. Lilly shares fell by as much as 4% Wednesday in response to the news as investors adjusted their expectations for the opportunity ahead of the company’s would-be drug.
In his Q&A at the JPM meeting, however, Ricks called the proposal a “middle scenario,” and noted it could change when finalized over the next few months.
“I’m not super surprised at that, because what’s missing, and I think a primary driver for the underdevelopment of this market, is really a conviction that treatment will matter for patients and that the risk is worth the benefit,” Ricks said in a presentation at the conference Tuesday.
His comment appears to refer to the conflicting data for Aduhelm that have convinced many doctors the drug’s benefit is marginal. Lilly, which applied for accelerated approval of its drug donanemab based on early data, has a large Phase 3 study underway that could produce definitive results by early next year.
“At the end of the day, when there’s full-on Phase 3 data, I expect the field will shift and we’ll need to shift with it,” said Ricks.
The only problem for Lilly, though, is that its rivals Roche and Eisai could have late-stage data even earlier.
CRISPR 1.0 vs CRISPR 2.0
On Monday, Pfizer announced it would spend $300 million to strike a research partnership with a gene editing biotech, marking the pharmaceutical giant’s most significant investment in the field to date.
But Pfizer’s new partner wasn’t Editas Medicine, CRISPR Therapeutics or Intellia Therapeutics, the three companies that have, for the better part of a decade, been trying to use CRISPR-based gene editing technology to make medicines.
Instead, Pfizer chose to work with the more recently founded Beam Therapeutics, which specializes in a type of gene editing that uses CRISPR proteins to more precisely edit single DNA “letters.” Known as base editing, it’s sometimes characterized as CRISPR 2.0 and carries similarly expansive potential to treat a range of genetic diseases.
But one of the first illnesses Beam chose to pursue was sickle cell, a rare blood disease for which Editas, Intellia and CRISPR Therapeutics are all developing treatments. While it’s not uncommon for many drug companies to pursue similar approaches against the same disease, the curative potential of gene editing raises the stakes for competitive comparisons.
On Wednesday, James Mullen, a former Biogen executive and Editas’ CEO for the past year, expressed confidence that his company won’t be outflanked by base editing or an even newer approach known as prime editing. Editas, he said, had taken a long look at the inherited diseases being targeted with editing treatments and concluded “the vast majority of the opportunities can be addressed with what we have.”
“That’s not to say that there aren’t a few instances where base or prime editing will have a unique application, but we think those are relatively isolated,” he added. “And there are some places where it will overlap what we can do.”
Notably, Mullen pointed to sickle cell disease as one condition where he claimed Editas’ approach might hold advantages over base editing.
“We feel pretty good,” he said. “We view that the bigger challenge is now going to be delivery. Our editing capabilities are very good. Can you get the editing machine where you want it to go?”