UPDATE 1-U.S. approves $2 million Novartis gene therapy for rare, deadly muscle disorder

(Adds details) By John Miller and Caroline Humer

ZURICH/NEW YORK, May 24 - Swiss drugmaker Novartis won U.S. approval for its gene therapy Zolgensma for spinal muscular atrophy (SMA), the leading genetic cause of death in infants, the company said on Friday, a one-time treatment expected to push the pricing boundary for rare diseases to new heights. The company said it would charge $2.125 million for the therapy. U.S. regulators approved its use in pediatric patients under age 2 with Type 1, the most severe form of the disease.

Novartis touched off a debate over what gene therapy is worth last year, estimating its treatment would be cost effective at up to $5 million per patient. A review in April by an independent U.S. group, the Institute for Clinical and Economic Review (ICER), concluded Novartis' value estimate for Zolgensma was excessive. Novartis Chief Executive Vas Narasimhan has much riding on Zolgensma, describing it as a near cure for SMA if delivered soon after birth. But data proving its durability extends to only about five years. The therapy uses a virus to provide a normal copy of the SMN1 gene to babies born with a defective gene.

Novartis is expecting European and Japanese approval later this year. Zolgensma will compete with Biogen's Spinraza, the first approved treatment for SMA. The disease often leads to paralysis, breathing difficulty and death within months for babies born with the most serious Type I form. SMA affects about one in every 10,000 live births, with 50 percent to 70 percent having Type I disease.

Spinraza, approved in late 2016, requires infusion into the spinal canal every four months. Its list price of $750,000 for the initial year and $375,000 annually thereafter, was also deemed excessive by ICER. Some neurologists see gene therapy becoming the preferred treatment for newborns with severe SMA, while acknowledging that families may choose to wait for long-term safety and efficacy data for Zolgensma. Novartis is looking into whether the death of one severely ill baby treated with Zolgensma was related to the therapy.