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It's not about Our Health! It's about Money!!
Saturday, February 5, 2011 5:16 PM | Karen Copeland Volg link

Sticker Shock: Genzyme May Want $60,000 for Its New M.S. Drug


By Jim Edwards |


Genzyme (GENZ) may be looking to charge $60,000 per patient per year for its new multiple sclerosis drug, according to numbers it gave at an investor conference yesterday, which would make the drug the most expensive on the market. Previously, Novartis‘ (NVS) Gilenya, itself a new treatment for MS, was among the priciest at $48,000. The price of Genzyme’s new drug, named Lemtrada (alemtuzumab), is crucial for three reasons:


  • Its value is key to Sanofi-Aventis‘ (SNY) hostile takeover bid of the company. Genzyme estimates the drug will top $3 billion in sales every year. Sanofi believes the drug will only sell about $700 million a year.

  • The price of a drug often sets its maximum revenues as reimbursers and patients make cost-benefit decisions partially based on its expense. Gilenya, launched in October, already stole 23 percent of the M.S. market. Lemtrada — which Genzyme claims blocks the progress of the paralyzing disease for years — would have to be magnitudes more effective to steal its market share.

  • Lemtrada is already on the market as a Campath, for chronic lymphocytic leukemia, a blood cancer. The amount of Campath required to treat an M.S. patient at Campath’s prices is just $10,000. So in order to get its $3 billion a year, Genzyme needs to find a way to restrict the supply of Campath so that it cannot be diverted to M.S. patients — an ethical and supply chain nightmare.


Genzyme didn’t explicitly say it would charge $60,000 a year. But it did say that it expected to earn $3 billion in revenues in the third year after Lemtrada’s launch (see page 53):



On page 89 of the same presentation, Genzyme estimates it will have 50,000 patients on the drug in the third year after launch:



Divide the revenues by the patients and Genzyme needs to charge roughly $60,000 per person per year to reach its $3 billion revenue goal.


Genzyme’s estimates of its own success are among the most bubbly, of course. ISI Group Inc. estimates just $2.3 billion. Other analysts estimate less. Sanofi’s $700 million estimate is merely the mean of previous analyst estimates. Having said that, some are already predicting that Gilenya could reach $5.4 billion.


The sky, apparently, is the limit.


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