The Food and Drug Administration just approved its most expensive drug ever — a hemophilia B gene therapy from Australia's CSL and UniQure — and QURE stock popped Wednesday.
Meanwhile, BioMarin shares broke out after the FDA said it wouldn't hold an advisory committee meeting to discuss its hemophilia A gene therapy. These advisors make nonbinding recommendations to the FDA after discussing the benefits and risks of experimental drugs. BioMarin's Roctavian is already approved in Europe.
On today's stock market, QURE stock jumped 14.6% to 26.36. That extended the stock's run from a 7.1% surge on Tuesday. Shares topped a buy point at 25.91 out of a consolidation, according to MarketSmith.com.
BioMarin stock jumped 7.3% to 97.79. That pushed BioMarin stock to break out of a double-bottom base with an entry at 92.86.
QURE Stock: Price Is Above Expectations
UniQure's infusion is approved for hemophilia B patients currently on a prevention regimen called Factor IX therapy, or who have a history of potentially deadly hemorrhages or serious bleeding episodes. At a one-time cost of $3.5 million, CSL 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 CSL in later stages. The label doesn't limit the therapy to any specific pool of patients or include a "black box" warning.
"Given the uncertainty around hemophilia gene therapy approvals and investor caution, we think this is a major positive for UniQure and a key de-risking for the story," UBS analyst Eliana Merle said in a report Wednesday.
The $3.5 million price tag is above a recommendation by 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 to $3 million based on executives' comments.
SVB Securities analyst Joseph Schwartz said the higher-than-expected price likely accounts for the small hemophilia B patient population. Still, he views the approval as a positive for patients with frequent bleeding episodes and the need for "burdensome prophylaxis therapy."
Patients will be monitored for three hours following the Hemgenix infusion. Then, they will need to undergo weekly monitoring for three months to watch for potential liver complications. Schwartz notes prevention treatment with Factor IX is typically given weekly.
"We believe these monitoring requirements make sense and will be viewed as a worthwhile sacrifice for the likely liberalization from factor therapy, bleeds and joint damage for a long time," he said in a report.
He has an outperform rating on QURE stock.
UniQure's Other Gene Therapy Efforts
Under the terms of the agreement, CSL will be responsible for commercializing Hemgenix. In return, UniQure will receive up to $1.5 billion in additional milestone payments and a royalty on sales in the midteens to low-20% range. UniQure also has manufacturing rights.
"We see (the) approval as a key de-risking event for UniQure's future cash flow potential," Schwartz said. "We also think this bodes well for the approval potential for BioMarin's Roctavian in hemophilia A."
The approval also likely lends credence to UniQure's efforts in other gene therapy areas. Investors are probably more cautious on the company's work in Huntington's disease. Three out of 14 patients in UniQure's study experienced serious side effects.
"We note the Phase 1 and Phase 2 update is still guided for in the second quarter of 2023 and could be an informative catalyst for the program with the first data on functional (goals)," said Merle, the UBS analyst.
She has buy rating on QURE stock and raised her price target to 42 from 40.
This story has been corrected to reflect Australia's CSL is UniQure's partner for Hemgenix.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
