MedWatch

Veloxis boss lukewarm over drug shortage: "We thought there might be more of an impact"

The drug shortage on Veloxis' market hasn't yet raised sales as much as CEO Craig Collard had hoped.

Craig Collard, CEO of Veloxis, had hoped to gain more from the lack of generic medicines on the company's US market.

When the USA's health authorities reported that companies producing generic drugs within Veloxis' biggest market had problems producing their medicine, it seemed like a gift sent from heaven for Veloxis and its CEO Craig Collard.

Suddenly, Veloxis had an opportunity to grab market share with their drug Envarsus – an immunosuppressant against organ rejection in kidney transplants, which is trying to bite into a market that is currently 89 percent generic medicine.

But so far, the drug shortage has not produced the sales increase that CEO Craig Collard hoped for, he tells MedWatch.

"You would think that when there is an API shortage, there would also be less available product, and we might be able to sell more product because of it. That just hasn’t happened," says Craig Collard.

"We’re a little unsure where the shortage is going. We initially thought there might be more of an impact by now," he says.

Taking a chance on generics

According to Craig Collard, the company has received telephone calls from transplant centers lacking tacrolimus – the API in Envarsus – but that those centres seem to choose other generics.

"It’s difficult to tell why that is, but it seems like other generics are filling the outages we are seeing," says Craig Collard.

He speculates that the transplant centers may prefer to take a chance on a generic producer, even if they may risk supply issues, because they do not want to give their patients a new drug in the middle of their treatment.

"The question for them is if they want to take a chance on a generic producer that maybe can’t supply or someone like us that requires them to switch their patient to another treatment. It’s a little more complicated when you go our route," says Craig Collard.

The only ones in town

Craig Collard won’t go as far as to say that he is disappointed over the lack of impact from the shortage, but:

"It’s fair to say that we hoped more would happen sooner," he says.

"It’s helped us, certainly, but it just hasn’t been that situation where all of a sudden we’re the only supplier in town," says Craig Collard.

It may still happen, though, adds Craig Collard. The largest generic producer on Veloxis’ market is Accord Healthcare, which before the drug shortage sat on 50 percent of the market, and Accord Healthcare told the FDA that they would not be producing tacrolimus again before May.

Newly transplanted patients pulling figures up

Despite the lacking impact from the drug shortage, Veloxis has not had any issues selling Envarus this year.

The company doubled its revenue in the last quarterly financial report and has positively adjusted its sales expectations twice this year.

This is largely due to Veloxis taking a much bigger market share among newly transplanted patients – also known as "de novo" patients – than the company had expected at the start of the year.

Veloxis originally estimated that 9.6 percent of all newly transplanted patients in the US would be treated with Envarsus by the end of the year, but by the third quarter, 21.7 percent of the newly translated patients had received Envarsus.

In other words, this means that 21.7 percent of patients who get a kidney transplant at US transplant centers today start treatment with Envarsus.

Although newly transplanted patients only make up a small part of the total market for Veloxis, this has played a role in the financial expectations being raised twice.

"As we grow the de novo share, we’re getting a bigger presence within the transplant centers, so we pick up new patients. That has driven sales upwards," says Craig Collard.

Veloxis' performance over the last few years has recently made their shares an extremely good investment. In just one year, share prices have risen by 338 percent, which is the biggest share price growth in the period among all Danish life science shares.

English Edit: Catherine Brett and Kevin Grønnemann

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