BioPharma, Pharma

Novartis pays $100M to get Mallinckrodt’s ticket for a speedier FDA drug review

Novartis is acquiring an FDA priority review voucher from Mallinckrodt Pharmaceuticals. The $100 million price tag is in the neighborhood of the going rate for these vouchers, which grant a company a shorter regulatory review timeline for a drug that addresses a rare or neglected disease.


Novartis is paying $100 million now for the opportunity to shorten the regulatory review of a rare disease drug candidate in the indeterminate future, a move that could save time and bring a potential blockbuster product to the market sooner, assuming it passes FDA muster.

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The Swiss pharmaceutical giant has reached a deal to buy a priority review voucher from Mallinckrodt Pharmaceuticals. Such vouchers stem from an FDA program intended to incentivize the development of drugs for rare or neglected diseases. Voucher holders can shave the standard 10-month review time down to six months.

Companies can obtain a voucher by winning approval for a rare disease drug. In such cases, the voucher that’s awarded may be applied to a future product candidate. The other way to get a voucher is to buy one from a company that already has one. That’s what Novartis is doing. Dublin, Ireland-based Mallinckrodt earned its priority review voucher by landing FDA approval last year for StrataGraft, a regenerative medicine treatment for burn injuries. This product is made by growing human skin cells to form a scaffold upon which a burn patient’s own skin cells can grow.

Mallinckrodt has been reorganizing under bankruptcy protection. As an asset that can be monetized, the StrataGraft priority review voucher became part of the company’s reorganization plan. According to that plan, the trustee overseeing the company’s unsecured claims had the right to consult in Mallinckrodt’s marketing and sale of the voucher. The document also specifies that these creditors will receive 35% of proceeds from a sale of the voucher. That means that the $100 million transaction breaks down to $65 million for Mallinckrodt and $35 million for the creditors. According to a Mallinckrodt regulatory filing, that payment will be directed to a trust set up for general unsecured claims under the Chapter 11 plan. In mid-June, Mallinckrodt announced it had emerged from bankruptcy.

Novartis has plenty of experience with priority review vouchers. The company applied a voucher to autoimmune drug Ilaris, seeking to expand the drug’s approval to gouty arthritis. The FDA rejected that drug application in 2011 and asked the company to provide more clinical data. Novartis was awarded priority review vouchers in 2017 with the approval for CAR T cancer therapy Kymriah and in 2019 for the approval of Egaten for the treatment of fascioliasis, a neglected tropical disease. The FDA’s 2019 approval of Zolgensma, the first gene therapy for spinal muscular atrophy, also came with a rare pediatric disease priority review voucher. Novartis successfully redeemed one of its vouchers with the 2019 approval of Beovu, an antibody drug that treats the wet form of age-related macular degeneration.

More recent transactions include Albireo Pharma’s sale of a voucher last year for $105 million, and BioMarin Pharmaceuticals’ February voucher sale that brought in $110 million. Albireo earned its voucher for Bylvay, a treatment for pruritus in patients with a rare liver disease; BioMarin for the approved dwarfism drug Voxzogo. In May, the voucher that BridgeBio Pharma earned from the  approval of metabolic disorder drug Nubrilvy sold for $110 million. In each instance, the voucher purchasers were not disclosed.

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