The promise of gene therapy is to cure diseases associated with faulty or missing genes. Yet the high upfront costs, uncertainty surrounding long-term durability and adverse events in some patients have often impeded market uptake.
So when the investment firm Cantor Fitzgerald late last month said it expects a “very strong product launch” of a recently approved gene therapy made by Krystal Biotech, the topical gel Vyjuvek indicated for a rare skin disease, it caught people’s attention.
Gene therapies can address the root causes of disease, potentially with a single curative dose. Pharmaceutical companies deploy multiple approaches to pursuing development of curative gene therapies, including inactivating a mutated gene and replacing it with a healthy copy, or introducing an entirely new gene into the body.
If gene therapies replace a lifetime of costly maintenance treatments this may lead to cost savings in the long run. However, successful commercialization of gene therapies has remained largely elusive. In part, this is because of access hurdles erected by insurers. The current payer system is not particularly well suited to accommodate single-dose therapies for which long-term treatment efficacy, risk-benefit ratios and safety remain uncertain.
But Vyjuvek (beremagen geperparvec) is different. Unlike the vast majority of current gene therapies on the market today, it’s not meant to be a one-off cure. Vyjuvek is the first and only Food and Drug Administration-approved topical gene therapy that can be re-dosed. It is also the first gene therapy to be applied topically to the skin, rather than infused.
Vyjuvek is indicated to heal patient skin wounds and prevent re-blistering caused by a severe dermatological disease named dystrophic epidermolysis bullosa. DEB is a condition that causes the skin to be extremely fragile and easily blister which can lead to severe pain, frequent infections and permanent scarring. The debilitating condition results from a mutation in the gene that affects the production of collagen. The lack of collagen leaves patients with exposed wounds that cannot heal properly.
Unlike other gene therapies that are one-and-done treatments patients will need to reapply Vyjuvek regularly to keep supplying the gene to their wounded skin. Specifically, Vyjuvek delivers two copies of a gene named COL7A1 when applied directly to wounds to correct the underlying skin defect of DEB. It does this by deploying an engineered herpes simplex virus, which has been found to be particularly efficient in targeting epithelial cells. The COL7A1 gene is responsible for the production of a protein which forms anchoring fibrils necessary to bind the dermis or inner layer of the skin to the epidermis or outer skin layer.
Vyjuvek addresses an unmet need in DEB patients. Prior to the product’s approval there was no treatment other than continuously cleaning and applying bandages.
Furthermore, Vyjuvek doesn’t require supportive equipment or technology or specialized expertise per se, which may eventually make it accessible even to patients who live far from treatment centers.
In terms of pricing Krystal CEO Krish Krishnan suggested it would be comparable to to enzyme or protein replacement therapies for rare diseases, which are also dosed indefinitely. Listed at $630,500 annually per patient—$485,000 after mandatory government discounts in Medicaid—it is certainly expensive.
Since the gel must be applied to open wounds, the surface area covering the wounds varies from patient to patient, which also affects how many vials a patient may be prescribed each year. It is estimated that the average patient will use 26 vials per year. At a wholesale acquisition cost of $24,250 per vial, the yearly cost of treating one patient with Vyjuvek is projected to be $630,500.
Nevertheless, DEB is a very rare disease. Approximately 3,000 patients suffer from it in the U.S. As such, despite the high cost per patient, it’s unlikely to expose individual payers to substantial outlays.
Most patients eligible for this therapy are under the age of 18. About 40-50% will be covered by Medicaid while 40-50% will be insured by commercial plans. The remainder will be a mix of Medicare and uninsured patients.
Krystal has said it’s received “positive coverage determinations” from “all major commercial national health plans.” The firm expects to obtain “positive coverage” from most Medicaid plans in the fourth quarter of 2023.
As of September 30, Krystal stated that it had received 284 patient start forms. There’s usually a lag of several weeks between a patient start form and a paid prescription. Krystal will transition to reporting on the number of patients on actual therapy beginning in the first quarter of 2024.
One of the main concerns payers have around gene therapies is durability, where a patients receive a very expensive treatment but doesn’t experience the intended therapeutic effects over time. In the case of Vyjuvek durability isn’t a factor, though for patients requiring especially intensive treatment annual expenditures per patient can be quite high.
Krystal is using an innovative payment model with its commercial payer clients. The company is offering them a price cap of $900,000 annually per patient to account for patients who require large numbers of vials.
Currently, this therapy will be billed under the medical benefit, as a healthcare provider must apply the gel to the open wounds and wrap the area with a hydrophobic dressing. But this could theoretically change to outpatient in future for certain patients who become comfortable with self-administering the product.
Perhaps Vyjuvek’s launch represents an inflection point for the gene therapy industry, as there’s some degree of optimism regarding its commercial prospects.
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