The first priority review voucher transaction

On July 30, 2014, BioMarin Pharmaceutical sold the priority review voucher (PRV) it received earlier this year to Regeneron/Sanofi for $67.5 million[1]. Regeneron and Sanofi expect that the PRV could enable alirocumab to be the first approved anti-PCSK9 monoclonal antibody. This is the first voucher transaction which could help us to estimate the market value of PRV.

The PRV is a transferable voucher awarded by the FDA to any company that obtains approval for a product for a rare pediatric disease or a listed tropical disease. The PRV program is intended to encourage the development of treatments for unmet medical need.

In October 2008, the FDA released a draft guidance entitled “Guidance for Industry: Tropical Disease Priority Review Vouchers”[2]. This guidance provides a response to 24 common questions about PRV.

Sponsors should include a request for a PRV in a cover letter to their NDA/BLA submission, if they are interested in receiving such a voucher and believe they are eligible. PRVs are awarded upon approval.

The holder of PRV can ask the FDA for Priority Review designation for a single NDA or BLA that would otherwise get a standard review. The sponsor must notify the FDA of its intent to use a PRV no later than 90 days prior to submitting a NDA or BLA. By the way, the sponsor should pay the FDA a priority review user fee.

A Priority Review designation is commonly granted to drugs that have the potential to provide significant improvements in the safety or effectiveness. That could shorten the review process to six months from the standard 10 months.

A PRV is transferable and can be sold to another organization, without limit on the number of transfer times. The purchaser must notify the FDA of a change of ownership within 30 days after such transfer.

So far, four pharmaceutical companies have launched products that have been awarded PRVs:

(1) Coartem (artemether/lumefantrine), developed by Novartis, was approved in April 2009 for the treatment of acute, uncomplicated malaria infections.

(2) Sirturo (bedaquiline), developed by Janssen Pharmaceutical, was approved in December 2012 for the treatment of multi-drug resistant tuberculosis.

(3) Vimizim (elosulfase alfa), developed by BioMarin Pharmaceutical, was approved in February 2014 for the treatment of Morquio A syndrome.

(4) Impavido (miltefosine), developed by Paladin Labs, was approved in March 2014 for the treatment of visceral, mucosal and cutaneous leishmaniasis.

The Coartem PRV was used in 2011 when Novartis submitted a supplemental BLA for Ilaris (canakinumab) to treat gouty arthritis attacks. It is unclear whether Janssen and Paladin have used or sold their PRVs.

IMS’s analyst, Waseem Noor, has a comprehensive analysis on the price of PRV[4]:

The maximum amount a buyer would pay for a voucher would depend on the following variables: potential peak revenue of the product; increased time on the market from faster approval; likelihood of priority review without the voucher; product-specific issues around entry, e.g. first to market; and overall number of vouchers available.

The value of a PRV is specific to a product, putting sellers at a disadvantage because they do not know how buyers intend to use them. According to Waseem Noor, the maximum purchase price for a PRV applied to Januvia (sitagliptin) would have been $125 million.

For alirocumab, $67.5 million is an inexpensive price. The probability of a lipid lowering drug going through a priority review based on its own merits is very low. On the other hand, PCSK9 inhibitors are eyed as potentially the biggest advance in the fight against heart diseases since statin drugs and the forecasting peak annual sales of alirocumab of more than $3 billion.

In my opinion, it is worth for Big Pharma to hoard up PRVs as a rare strategic tool. For small to mid-size companies, it is hard to say. In some therapeutic areas, such as anti-virals and anti-neoplastics/immunomodulating agents, the value of the voucher would be close to zero, because these candidates are very likely to get priority review without a PRV.

[1] Regeneron Press Releases. Regeneron and Sanofi Announce Plan to Use Priority Review Voucher For Alirocumab U.S. FDA Submission. July 30, 2014.

[2] U.S. Food and Drug Administration. FDA Draft Guidance for Industry: Tropical Disease Priority Review Vouchers. Washington: Government Printing Office, October 2008.

[3] Kurt R. Karst. BioMarin Snags the First Rare Pediatric Disease Priority Review Voucher with VIMIZIM Approval. FDA Law Blog. February 17, 2014.

[4] Waseem Noor. Placing value on FDA’s priority review vouchers. In Vivo: The Business Medicine Report. 2009, 27(8), 1-8.

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