Shire Set For $50 Million Windfall On Demand For Gaucher Drug
Genzymes setback also hands Shire the chance to garner $139 million in revenue in 2011, according to Citigroup Inc., which says Shires velaglucerase alfa may grab 15 percent of the $1.1 billion market for Gaucher disease treatments by 2012.
“The question for us isnt how much market share were going to get in the short term, the question is how much can we get to the market,” Shire Chief Executive Officer Angus Russell said in an interview this week. “Im pretty sure demand will exceed that, hence the need for more drugs.”
The introduction of the Gaucher drug is accelerating Russells plan to cut Shires dependence on attention deficit hyperactivity disorder drugs. Hyperactivity drugs Adderall and Vyvanse made up half of 2008 sales.
Revenue sank 19 percent in the second quarter on generic competition to Adderall. Shares of Basingstoke, England-based Shire have risen 13 percent in the past year, compared with a 9.4 percent drop in the Bloomberg Europe Pharmaceutical Index.
The majority of Gaucher patients took Genzymes Cerezyme until a virus at a Genzyme factory prompted regulators to halt output in June. The virus, Vesivirus 2117, originated in a nutrient used in the manufacturing process. With the resulting shortage, the U.S. Food and Drug Administration allowed Shire to rush velaglucerase alfa to the neediest patients even though the drug isnt approved. The first patient began treatment this week.
Enzyme Replacement
Gaucher disease is an inherited disorder caused by low levels of an enzyme responsible for breaking down a fatty substance that can build up in the spleen, liver and brain, according to the U.S. National Institute of Neurological Disorders and Stroke. Depending on the type of the disease, it can lead to bruising, anemia, seizures, brain damage and death.
Its one of the worlds rarest diseases, affecting an estimated 5,000 to 8,000 people globally, said John Barranger, a Gaucher specialist at the University of Pittsburgh. Cerezyme and velaglucerase alfa are both enzyme replacement therapies.
Shire said Sept. 8 it could supply from 300 to 600 patients, depending on dosing variations. The company is accelerating plans for a new manufacturing plant in Lexington, outside of Boston, to help boost capacity for velaglucerase alfa, Russell said. He confirmed Citigroups expectation that Shire will expand capacity to 900 patients next year and more than 1,000 patients after that.
Added Sales
“We do have a very big manufacturing facility we hope will come on stream the back end of next year, perhaps,” Russell said. “If thats successful and we manage to achieve our objectives, we hope to achieve broadly those sets of numbers.”
Genzyme started rationing Cerezyme in June after the closing of the companys Allston Landing plant in Boston for decontamination, alarming patients who relied on it as the only enzyme replacement treatment available.
“Patients are concerned that they will begin to deteriorate, especially because much of this deterioration can be irreversible,” said Barranger, who helped develop the first enzyme replacement therapy for Gaucher patients in the 1970s.
Safety Plan
Shire submitted a safety plan to the FDA to allow velaglucerase to be available while Genzyme makes a new supply, which the Cambridge, Massachusetts-based company has said should reach patients in November. A Genzyme spokesman didnt return a call for comment.
“Were working as fast as we can to accommodate the need where we can,” Sylvie Gregoire, head of Shires human genetic therapies, or HGT, unit, said in an interview. Shire said Sept. 1 it applied to the FDA for approval of the drug and would seek European approval by years end.
Hyperactivity “remains very important for Shire but I think its kind of rational and sensible that the rest of the business gets more focus,” Jack Scannell, a Sanford C. Bernstein & Co. analyst in London, said in an interview. “The change in the perception has been something that Shire has been trying to do for ages and now Genzyme has done it for them.”
Scannell has a “market perform” rating on the shares.