Provention costs diabetes drug above analysts’ estimates at $13,850/vial By Reuters

By Raghav Mahobe and Nandhini Srinivasan

(Reuters) -Provention Bio Inc has priced its diabetes drug teplizumab at $13,850 a vial, it mentioned on Friday, a day after receiving U.S. approval and much increased than some analysts’ expectations.

The corporate’s shares reversed course from premarket positive factors to commerce down practically 12% because the excessive pricing stoked fears over insurance coverage protection.

The U.S. Meals and Drug Administration on Thursday accredited use of the drug for sufferers, with stage 2 of kind 1 diabetes, to delay the onset of insulin dependence in these aged 8 years and above.

A 14-day routine, or a course of the drug would translate to a wholesale value of $193,900, the corporate mentioned on a convention name. The wholesale value shouldn’t be essentially what sufferers pay for a drug.

“This (value) is way increased than maybe what the Avenue was anticipating,” mentioned Gregory Renza, an analyst at RBC Capital Markets.

“Traders may have some degree of concern that this pricing might result in insurance coverage hurdles,” mentioned SMBC Nikko Securities analyst David Hoang, who was anticipating the therapy to price $70,000 to $80,000 per course.

Sort 1 diabetes is an autoimmune illness brought on by the destruction of beta cells within the pancreas that produce insulin.

Greater than 1.8 million individuals in the US endure from kind 1 diabetes, in accordance with Provention.

In October, the corporate signed a co-promotion deal for the drug with Sanofi (NASDAQ:), providing the French drugmaker first negotiation for unique international rights to commercialize the drug in change for an upfront cost of $20 million.

Teplizumab belongs to a category of medicine generally known as anti-CD3 therapies, which bind themselves to sure white blood cells to suppress the physique’s immune response.