Biotech Values

[iwfal]

XOMA beginning of year clean up -

Since the Behçet’s prevalence is many times smaller than the general NIU prevalence, a Behçet’s-only indication would require that Gevokicumab carry a very high price to produce commercially meaningful sales.

Surfing through past XOMA posts and decided I wasn't entirely clear on this topic before:

There are a variety of companies that actually intentionally target first approval in an orphan, then spread to a wider indication. I haven't yet bumped into a company being completely open about why this is - but several have hinted that it 'optimizes' pricing in addition to allowing easier approval. (I believe this 'optimization' is a reference to Anchoring, which is a special case of Priming). Biomarin, whose problem is a little different (countries all wanting the best price available in any country), even mentioned special analyses and consultant specialists in this general area (optimizing pricing via rollout).

More particularly, in the case of XOMA, the other IL-1 inhibitors on the market are priced at about $200k per year. So even with only, say, 500 patients in the US that is still $100M per year. And is probably worth a 20 to 40 percent (WAG) premium once more broadly approved in general NIU.

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Separately, another XOMA topic that I thought I had mentioned before, but have not... .

Currently there are 3 IL-1 inhibitors on the market in the world. 2 are Mabs and approved in the US in orphan indications. But the third is diacerein, approved in the EU for treatment of Osteoarthritis. The MOA is very different and probably less clean than the Mabs - it works by preventing the creation on the IL-1 receptors (by interfering with ICE - part of the activation system for creating the receptors). The caveats to the pertinence of the diacerein data to Xoma's osteo trial are:

1) The diacerein drug is probably messier than the Mabs - more off target effects and perhaps they are what is causing the benefit.

2) The clinical data for Diacerein is in non-hand OA - so perhaps not pertinent to hand (I personally think this is unlikely, but it certainly is not impossible).

3) The clinical data for Diacerein is mixed in RCTs. Generally speaking the longer the trial and the sicker the population the better the results. But, nonetheless, not a completely clear clinical trial history.

Side note: EU is currently talking of withdrawing diacerein due to too many side effects (high prevalence of bad diarhea, some cases of liver tox) relative to proof of strong benefit (see discussion above of mixed trial results).