As 2019 rolls in, we expect to see a flurry of approvals in the Japanese regenerative medicine arena, with regulatory decisions anticipated by the end of the year for Novartis Pharma’s CAR-T therapy and many more products, which could bring the total number of approved cell and tissue treatments to double digits.
Until just recently, Japan only had four “regenerative medicine” products. The first two of these - Japan Tissue Engineering’s JACE (autologous cultured epidermis) and JACC (autologous cultured cartilage) - had been approved as “medical devices” before the enforcement of the Pharmaceuticals and Medical Devices (PMD) Law in November 2014, which created a new category called “regenerative medicine products etc.,” and a conditional and time-limited approval scheme for these products, which encompass cell and gene therapies.
The other two “regenerative medicine” approvals came in September 2015 for JCR Pharmaceuticals’ human mesenchymal stem cell therapy Temcell, which is for acute graft-versus-host disease (GVHD), and Terumo’s HeartSheet, autologous skeletal myoblast sheets for heart failure. In more than three years that followed, though, we had no “regenerative medicine” approvals, with some fretting over the doldrums of the sector.
However, the Ministry of Health, Labor and Welfare’s (MHLW) blessing given to Nipro’s Stemirac at the end of 2018 stemmed the stagnation after these dormant years - in a prelude to many more green lights likely to come in 2019.
1st Sakigake-Designated Cell Therapy OK’ed
Stemirac is the first of nine “regenerative medicine” products designated for the sakigake fast-track designation that earned the MHLW nod. Developed jointly by Nipro and Sapporo Medical University, Stemirac is the first stem cell therapy for the treatment of spinal cord injury.
What is seen as the next to obtain approval, among the nine sakigake products, is Novartis’ AVXS-101, a gene therapy filed in November for the treatment of spinal muscular atrophy (SMA). AVXS-101, which was snapped up by the Swiss giant through its buyout of US biotech AveXis in May, is expected to offer a once-and-done treatment, whereas Biogen’s Spinraza (nusinersen), the first SMA therapy launched in 2017, needs to be injected into the spinal cord every four months for infantile SMA and every six months for non-infantile SMA. The company is aiming for its Japan approval in the first half of 2019.
In addition, two more sakigake regenerative products could reach the approval stage in 2019 - the University of Tokyo/Daiichi Sankyo’s oncolytic virus G47∆ for the treatment of glioma, which is currently in PII development, and Takara Bio/Otsuka Pharmaceutical’s gene therapy TBI-1301 for synovial sarcoma. Meanwhile, Tokyo Women’s Medical University and CellSeed are eyeing 2019 approval for their oral mucosa-derived esophageal cell sheet CLS2702C/D for the treatment of esophageal cancer.
Approvals for other sakigake products might be some years away. Kyoto University and Sumitomo Dainippon Pharma saw an investigator-led study launched last year for their iPS cell-based Parkinson’s disease therapy, with the Japanese company aiming for its launch in FY2022.
Apart from the batch of sakigake products, there are several regenerative medicine therapies also nearing approval.
Osaka-based biotech AnGes submitted its HGF gene therapy AMG0001 (beperminogene perplasmid), also known as Collategene, in January last year for critical limb ischemia (CLI), and in April that year, Novartis filed its CAR-T therapy Kymriah (tisagenlecleucel) for B-cell acute lymphoblastic leukemia (ALL) and diffuse large B-cell lymphoma (DLBCL). Then in June, Fujisoft Tissue Engineering sought the regulatory nod for its autologous cultured cartilage product FSI2007 for nasal deformity associated with cleft lip and palate. All these are expected to land approval by the end of the year.
Elsewhere, SanBio’s stem cell therapy SB623 is seen likely to reach a submission in 2019 for an indication of traumatic brain injury, while Takara Bio and Otsuka plan to wrap up a PII study of their oncolytic virus TBI-1401 for the treatment of melanoma and getting themselves ready for its filing.
As to CAR-T therapies, Novartis is prepping for Kymriah studies targeting further indications, including follicular lymphoma and aggressive B-cell non-Hodgkin’s lymphoma, while rivals scramble to develop their own products in the space. Daiichi Sankyo is running the Japan development of Yescarta (axicabtagene ciloleucel), which it licensed in 2017 from Kite Pharma, now under the aegis of Gilead Sciences. Takara Bio/Otsuka and Celgene are developing TBI-1501 and JCAR017, respectively.
Aside from Kymriah and AVXS-101, Novartis has exclusive rights to Spark Therapeutics’ blindness gene therapy Luxturna (voretigene neparvovec) outside the US. While Luxturna has been already approved in the US and Europe, the company is still gauging its development in Japan.
Concerns over Fiscal Impact
Although these cell and gene therapies would mark major strides in the treatment landscape of certain difficult-to-treat diseases and conditions, they are stirring significant concerns on the health finances front, with their sky-high price tags overseas grabbing the headlines. In its document submitted in October to the Fiscal System Council, the Ministry of Finance (MOF) said one-time treatment costs per patients in the US stand at roughly 54 million yen (US$475,000) for Kymriah (ALL), 42 million yen (US$373,000) for Yescarta (lymphoma), and 97 million yen (US$850,000) for Luxturna (hereditary retinal disease).
On AVXS-101, AveXis President Dave Lennon reportedly told investors in a conference call in November that the SMA treatment could be cost effective in the range of US$4-5 million. A spokesperson of Novartis’ Japan unit explained, however, that “this is merely a number generally estimated based on the existing cost effectiveness calculation models, and his comment was not meant to suggest the price of this product.”
New Pricing Rules
The pricing of these up-and-coming products came up for discussion at a meeting of the Social Security Council’s health insurance subcommittee in October. At the meeting, a MHLW official noted that the number of patients expected to receive treatment with Kymriah is “around 250,” adding, “It depends on its pricing in Japan, but its actual market size would be around 10-20 billion yen.” However, the ministry has not set out a clear policy for the pricing of these products.
A Novartis official said at a Tokyo symposium in mid-December, “How would our products be priced? We don’t know yet. As we expect discussions over concerns that these products would weigh on health finances, our challenge would be how we can get reasonable prices and offer convincing values.”
At present, there are no pricing rules applied specifically to regenerative medicines, and each such product is priced based on either drug pricing rules or medical device pricing rules depending on their characteristics. With approvals and listing of some of these products approaching, the MHLW will likely carry on this current policy of product-by-product discussions for the time being. These discussions are expected to culminate in the first half of this year, when we would see the listing of Stemirac, as well as the approval/listing of AMG0001, Kymriah, and AVXS-101.
As we see more and more regenerative medicine approvals, MHLW officials would roll up its sleeves to launch earnest debates on crafting new pricing rules for these products. When the listing of Temcell and HeartSheet was discussed at the Central Social Insurance Medical Council (Chuikyo), a panel member pointed out the problem of different operating profit rates used for the pricing of drugs and medical devices. Temcell was priced using drug pricing rules, while HeartSheet was priced as a medical device, with the average operating profit rate for each industry used to calculate their prices. The MHLW at that time showed its intention to consider regenerative medicine pricing rules once it gains more experience and knowledge.
How should we balance reward for innovation and the stability of health finances? What would be the right pricing model to this end? With 2019 ushering in increased regenerative medicine approvals, it is about time for us to squarely face this issue.