Alnylam and Ionis are in a head-to-head battle for market share with their new treatments for the rare disease hereditary transthyretin-mediated amyloidosis (ATTR), and they both won approval in Europe over the summer. But now England’s influential drug-cost watchdog, the National Institute for Health and Care Excellence (NICE), has refused to back either drug.

NICE issued preliminary guidance on Wednesday stating neither drug is cost-effective and therefore shouldn't be routinely used by England’s National Health Service (NHS). The agency is taking comments until Jan. 9 and plans to meet again in February to re-evaluate the drugs.

Onpattro carries a list price of £7,176.45 ($9,052) per vial and is infused every three weeks, while Tegsedi is a once-weekly, £5,920 ($7,467) injection that patients can give themselves. Both companies offered undisclosed discounts, and NICE determined that the treatments do, in fact, slow the disease's progress and improve quality of life.

"However, it is uncertain whether these benefits are maintained in the longer-term," NICE said in a statement emailed to FiercePharma. "In addition, there were uncertainties in the economic modelling for both treatments."

A spokesperson for Ionis told FiercePharma that NICE's decision was "not unexpected" and that the company plans to address the agency's concerns. Brendan Martin, general manager of Alnylam UK & Ireland, said in a statement that the company would work with NICE on "securing a positive, sustainable agreement that represents value for the NHS and that would help transform the lives of people living with this terrible disease."

Indeed, it has become standard practice for companies to negotiate with NICE, and often those discussions lead to reversals of previously negative opinions. So there’s little doubt investors will keep an eye on NICE developments over the coming months.

ATTR causes an abnormal buildup of a protein in the liver that accumulates in tissues throughout the body, leading to progressive loss of muscle function and ultimately death. About 150 people in the U.K. have the condition, NICE estimated in its preliminary guidance documents. The only available treatment before Onpattro and Tegsedi was supportive care, so there's a significant need for drugs that relieve disability and improve quality of life, the agency said.

But NICE’s standard method for determining cost effectiveness revolves around the commonly used measure of quality-adjusted life year gains (QALY), and Onpattro and Tegsedi both fell short, the agency reported. That’s because they delivered incremental cost-effectiveness ratios above £100,000 per QALY gained when compared with the standard of care. That figure needs to fall below £100,000 for the drugs to be considered an effective use of NHS resources, NICE said.

In Tegsedi’s case, the guidance document noted that Ionis’ best-case scenario produced an incremental cost-effectiveness ratio of £369,569 per QALY gained, and NICE concluded that the real ratio would be nearly twice as high.

NICE picked on both companies for failing to account for certain risk factors in their cost-benefit analyses. For example, Alnylam didn't properly factor in treatment compliance rates when analyzing the cost of administering Onpattro and other medications that are recommended prior to the treatments, including steroids and antihistamines, NICE said.

Alnylam has been under the gun to rev up sales of Onpattro. The RNAi therapy, which suppresses transthyretin (TTR) production in the liver, has brought in just $460,000 in sales since its August approval. That prompted Jefferies’ Maury Raycroft to declare the launch "disappointing" after Alnylam’s third-quarter earnings release.

During a conference call after the earnings announcement, Alnylam President Barry Greene said the company is working hard both to increase awareness of the disease and to boost genetic screenings that would improve the diagnosis rate. The company estimates that at least 20,000 ATTR patients are eligible for the drug, but only 5,000 have actually been diagnosed.

Ionis, meanwhile, is stepping up its effort to gain a toehold in the market. It won approval for Tegsedi in October and promptly priced it in the U.S. at $450,000 a year, matching Alnylam’s price tag on Onpattro. And Ionis is playing up the fact that its drug is more convenient than Alnylam’s because patients can administer it to themselves at home.

As if the marketing task isn’t challenging enough for Alnylam and Ionis, there’s a third aTTR player waiting in the wings that has been attracting attention of late: Pfizer. In August, Pfizer releasedpositive clinical trial data for its candidate, tafamidis, in the related condition ATTR cardiomyopathy. Although the three companies won’t initially be courting the same patients, there could eventually be some overlap in their marketing efforts. Alnylam, for one, is hoping to gain approval for Onpattro in ATTR cardiomyopathy, too.

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