The NHS published a mock technology appraisal analysis to assess the value of Kite Pharma Inc.’s (NASDAQ:KITE) CAR T therapy and determine a value-based price. The study was conducted for young ALL and determined a price of £530K ($649K) was justified. Jefferies views this price as an upper limit for Axi-Cel pricing, and raises its Axi-Cel price estimate to $300K (prev' $200K). It also decreased WACC to 13% (prev 15%) which was offset by moderating share to drive its new PT of $101.
The UK's National Institute for Health Research (NHS) published a mock analysis last month to define a 'reasonable' price tag (defined as ≤£50K per add'l quality life year (QALY)) for CAR T therapies if determined through value-based pricing. The report focused on 2 ped ALL CAR T data sets. In the case of minimum evidence, the report determined that the max price for such a therapy would be £530K ($649K). This includes the cost for flu/cy conditioning but other costs (e.g., hospital, SAE mgmt, follow up) are broken out separately. This estimate assumes that ~11 QALY's are gained by treatment and ~10 QALY's are gained over std of care.
Three major limitations to this analysis is that it was conducted exclusively in pediatric and young adult patients in ALL, and assumes value priced pricing. Jefferies thinks an analysis using the Zuma-1 data set could yield a smaller price tag due to the fact that patients are older (reducing QALY gained pot'l) and due to the slightly higher response rates seen in the ALL studies and as a result view the $649K as the upper bound. However, the firm notes that one of the studies used in the report is the NCI's Axi-Cel dose finding PI where that data included a smaller number of pts but with longer follow up. Further, the firm believes that the 6-mon OS for Zuma-1 should be >50% w/ updated data at AACR.
Based on this NHS analysis Jefferies increased its price for Axi-Cel across all indications to $300K (gross; prev' 200K) in the US and $204K (net; prev' $125K) in the EU. This increase was partially offset through the moderation of mrkt share estimates. The firm also decreased its WACC to 13% (prev 15%) as Axi-Cel gets closer to mrkt. These changes drove the firm’s new PT of $101.
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