NVS Novartis AG

By Denise Roland 

Novartis AG has paused a clinical trial of its Zolgensma gene therapy after a separate study on animals raised concerns about side effects, dealing a setback to the company's efforts to broaden the market for the world's most expensive drug.

The trial treated children up to five years old with spinal muscular atrophy, or SMA, an inherited muscle-wasting disease, through a spinal injection of the $2.1 million per patient drug.

The U.S. Food and Drug Administration ordered a partial hold on the trial after Novartis reported that primates receiving Zolgensma through spinal injection suffered nerve cell inflammation, sometimes accompanied by cell degeneration.

The halt doesn't affect the use of the therapy in children up to the age of two, which was approved earlier this year, because that version is given through intravenous injection rather than through the spine. Zolgensma provides a working version of the gene at fault in SMA.

The news is a setback for Novartis, which hoped the trial targeting older children with type 2 SMA -- a milder form of the disease -- would pave the way to treat a much broader group of patients.

There are around 4,800 older children living with type 2 SMA in the U.S. Only around 300 of those would be eligible to receive Zolgensma in its already-approved form.

Jefferies analyst Peter Welford said in a note to clients that losing that potential market would erode Zolgensma's sales potential by nearly a third. He forecasts peak sales at about $2.8 billion but says that would fall to $2 billion if the company is unable to sell the treatment for older children with type 2 SMA.

Mr. Welford and other analysts believe the stop is likely to delay, rather than derail, the trial. Novartis said no children who had received the spinal injection of Zolgensma had suffered nerve inflammation. It also said no other animal studies had shown this side effect. Earlier this month, Novartis reported the trial had so far shown positive results. To resume the trial, Novartis will have to provide data to the FDA to reassure the agency there are no safety concerns over the spinal injection in children.

Despite its eye-catching price tag, Novartis said Zolgensma has sold well since its launch in late May, overcoming concerns about whether insurers would cover the treatment as well as a data-manipulation scandal at the unit that makes it.

Novartis defended the price saying it would cost half that of the current standard treatment, Biogen Inc.'s Spinraza, over a 10-year period. Spinraza, which is a continuing treatment, costs $750,000 for the first year and $375,000 for each year after that.

The company also pointed to a study by the independent nonprofit Institute for Clinical and Economic Review, which said Zolgensma is worth $2.1 million when given to newborns who haven't yet developed symptoms of the disease.

The drug halts, rather than reverses, the condition -- so the earlier a patient receives treatment, the better the outcome. Novartis hopes that as newborn screening gains traction, the majority of patients will fall into this category.

Novartis also faced scrutiny after it discovered earlier this year that testing data related to the manufacture of certain Zolgensma lots had been manipulated by scientists at the unit that makes it. The FDA criticized Novartis for failing to disclose those concerns immediately but said the manipulation didn't change its view that the drug is safe and effective.

Write to Denise Roland at Denise.Roland@wsj.com

(END) Dow Jones Newswires

October 30, 2019 08:49 ET (12:49 GMT)

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