Following the news that Massachusetts-based biotechnology company bluebird bio Inc (bluebird bio) has signed a second outcomes-based reimbursement deal with a large commercial payer for its sickle cell disease gene therapy, Lyfgenia (lovotibeglogene autotemcel);

Nancy Jaser, Senior Pharma Analyst at GlobalData, a leading data and analytics company, offers her view:

“Combined with its first coverage agreement secured on 14 December 2023, bluebird has now locked in coverage for 200 million patients in the US, easing significant concerns regarding the hefty $3.1 million price tag for its first-in-class sickle cell disease gene therapy, Lyfgenia (lovotibeglogene autotemcel).

“Lyfgenia’s FDA approval on 8 December coincided with the historic FDA approval of Vertex/CRISPR’s Casgevy (exagamglogene autotemcel), the world’s first CRISPR-based gene therapy, priced much lower at $2.2 million. Lyfgenia and Casgevy are the first gene therapies to gain approval for the treatment of sickle cell disease, with both demonstrating very similar efficacy.

“However, Lyfgenia’s approval also came with an unexpected black box warning for hematological malignancies. Since Casgevy’s label does not carry a boxed warning, this raised further concerns for Lyfgenia’s ability to penetrate the market and compete with its less expensive rival.

“While Lyfgenia faces serious commercial challenges, bluebird’s reimbursement agreements will cover roughly 80% of sickle cell patients in the US, giving the drug a competitive advantage over Casgevy to secure market share.

“Bluebird bio suffered major financial losses in December 2023, triggered by the approval of Lyfgenia. The black box warning requires patients to be monitored for cancer every six months for at least 15 years. Further, bluebird did not receive an anticipated priority review voucher (PRV) for Lyfgenia, which Novartis had already agreed to purchase for $103 million. As a result, despite securing a landmark gene therapy approval, bluebird’s stock crashed by 41% in just one day.

“While struggling financially, bluebird has a major advantage over its rival, Casgevy. With two other gene therapies on the market, Zynteglo for beta-thalassemia and Skysona, indicated for cerebral adrenoleukodystrophy (CALD), the company has already established a network of 35 qualified treatment centers in the US. In comparison, Vertex/CRISPR currently only have nine qualified treatment centers for Casgevy. With payers also already on board, this may lead to faster treatment initiation for Lyfgenia and ultimately to a higher share of the market.

“Lyfgenia’s boxed warning and high cost have led to concerns regarding its ability to gain sufficient insurance coverage versus its cheaper competitor, Casgevy. However, bluebird’s major coverage agreements show that despite its high price, payers acknowledge the long-term value of Lyfgenia and are comfortable with bluebird’s outcomes-based contract options. If the company can financially support the commercialization of Lyfgenia, coverage and reimbursement are not expected to be a problem.”