In an Aug. 31 research report, Wainwright analyst Joseph Pantginis commented on FDA approval of Novartis AG's (NVS:NYSE) Kymriah (tisagenlecleucel) for pediatric patients with acute lymphoblastic leukemia (ALL) "ahead of the September 29 PDUFA data following the unanimous positive ODAC (Oncologic Drugs Advisory Committee) vote this past July 12. This first approved CAR-T is priced at $475K vs. our projection of $400K."
Oxford BioMedica (OXB:LSE), as the "sole manufacturer for the lentivirus used to create Kymriah," will be a "direct beneficiary" of the approval, Pantginis wrote.
In light of the early approval, H. C. Wainwright reiterated its Buy rating for Oxford BioMedica and increased its price target to £0.21 from £0.18. "The factors impacting our price target change include: 1) increasing our Kymriah projected chance of success from 90% to 100% for ALL, and 75% to 85% for DLBCL (diffuse large B-cell lymphoma); and 2) based on the adjusted cost of therapy, we are increasing our projected peak sales to $600 million from $525 million for ALL, and $3.85B from $3.75B for DLBCL, " Pantginis wrote. Oxford BioMedica currently trades at ~£0.10/share.
Oxford BioMedica's "recent manufacturing agreement with Novartis was extended for an additional three years (we anticipate longer going forward)," Pantginis stated. "While undisclosed, we project that the overall royalty payable to OXB is 3% of Kymriah sales. . .Therefore, we are adjusting our Kymriah based 2022 revenue to OXB projection to $151.1 million from $127.3 million."
The analyst also recognized the "significant surprise" in Novartis' collaboration with "the Centers for Medicare and Medicaid Services (CMS) to bring forward an outcomes-based payment approach. Specifically, this approach would allow for payment 'only when pediatric and young adult ALL patients respond to Kymriah by the end of the first month.'"
"With continuing, almost global, pushback on the increasing costs of oncology drugs, Novartis is truly breaking significant ground, in our belief," Pantginis commented.
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