Legend improves access to Carvykti, but cell therapy lags demand as biotech seeks earlier-line approval

Legend Biotech and its partner Johnson & Johnson are seeking approval to move their blood cancer cell therapy into earlier lines of treatment, though the companies have struggled so far to catch up to market demand.

The New Jersey biotech said Tuesday that the FDA will conduct a standard review, rather than a speedy one, as it seeks approval for Carvykti as a second treatment option for patients with multiple myeloma. The FDA set a decision deadline of April 5, 2024, and European regulators also accepted the application for an expanded label.

US regulators initially approved the duo’s CAR-T therapy last year, and it is currently relegated to the fifth line of treatment. That said, Carvykti brought in an unexpected $117 million in sales in the second quarter, and both Legend and analysts appeared surprised at the 63% uptick in quarter-over-quarter revenue. Legend CEO Ying Huang told investors that revenue “exceeded our expectations.”

The tally beat analysts’ consensus, which hovered slightly below nine figures. Abecma, Bristol Myers Squibb’s CAR-T for multiple myeloma, saw sales dip to $132 million in the second quarter from $147 million the prior quarter, the drugmaker reported last month. Bristol is also seeking approval for earlier treatment use, with an FDA decision set for Dec. 16, after winning initial approval in March 2021.

But with a standard review and manufacturing still lagging behind demand (Novartis was recently recruited to help as part of a three-year deal), investors appeared dismayed, with Legend’s stock price $LEGN closing 4% lower on Tuesday.

“While the standard review for the sBLA is unfortunate, it does not impact our thesis that the majority of patients treated with Carvykti in the long term will be in the second-line setting,” William Blair analyst Sami Corwin wrote in a Wednesday morning note.

According to TD Cowen analyst Yaron Werber, Abecma doesn’t have priority review for the FDA’s December decision either.

“While this is a delay compared to JNJ/LEGN’s previous guidance of YE23 approval, it is ultimately not a big issue since capacity will be lower than projected demand in FY24 either way,” Werber wrote.

As Legend’s sole approved therapy to date, and one of only six CAR-T treatments on the market, a lot rides on Carvykti’s performance. Legend has placed big bets on the treatment, which it hopes will eventually generate $5 billion in revenue.

“We see Carvykti as the crux of the new myeloma landscape,” Huang said.

He reiterated previous comments that Legend expects to have an annual capacity of 10,000 doses or more by the end of 2025. “We’re very much on track,” the CEO said.

Expanding access, increasing efficiency 

Steve Gavel

The biotech added 35 more treatment centers during the second quarter, bringing the total to 54 active sites in the US as of June 30, Huang said, as it tries to assuage concerns about access that have caused some patients to find lodging for an entire month to get the treatment, in some cases, demand has not let up since January, the CEO told analysts.

The number of patients receiving the therapy in an outpatient clinic is increasing, going from 18% in the first quarter to about 30% in the second quarter. Legend sees growing outpatient use as an expansion of “operational flexibility with Carvykti,” said Steve Gavel, the biotech’s SVP of global cell therapy commercial development.

The biotech also saw its out-of-spec rate decline, meaning more of its therapies are in line with required criteria for infusion.

Huang told analysts he expects that rate to continue to decline, and the biotech submitted additional data as part of its sBLA for earlier-line treatment to support wider specs. He pointed to the decreasing out-of-spec rate for Novartis’ cell therapy Kymriah, which was in the high 20s or low 30s and has since dropped to about 2%, he said. That gives Legend confidence that “this can be done” for Carvykti, he added.

While Legend will make routine manufacturing maintenance checks, it doesn’t plan to shut down any operations to do so, as Bristol Myers did for about one month. Adam Lenkowsky, Bristol’s chief commercialization officer, told analysts on last month’s earnings call that it was a “routine shutdown to execute maintenance.”

More treatments enter the field

Even as the companies that make Carvykti and Abecma pursue supplemental indications, those therapies are no longer the shiny new treatment options for multiple myeloma.

Legend’s partner Janssen has secured two FDA approvals for the blood cancer in the past 10 months with the bispecific drugs Talvey and Tecvayli. Shortly after Talvey was approved earlier this month, Pfizer snagged a nod for its bispecific Elrexfio.

Like the cell therapies, patients must have been on at least four prior lines of treatment to receive any of those three bispecifics.

“What we’re seeing very clearly around the bispecifics is a bridge to get to the CAR-T therapies,” Gavel said. “This is a very good situation for patients to have these different options. Most importantly, this is a very key point: the commercial insurers in the US continue to reimburse for CAR-T therapy once a bispecific or if a bispecific is used prior to cilta-cel.”

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