Rheumatoid arthritis (RA) is an autoimmune disease that attacks tissues within the joints, and it is accompanied by chronic swelling and pain. This systemic disease can affect the whole body, including organs, and it is a major target of U.S. and foreign biotechnology and pharmaceutical companies. It generates billions of dollars in annual sales, and AbbVie’s Humira has been approved since 2002. With new biosimilars also having been approved, and with other RA drugs from different categories, there is a lot up for grabs here, for companies and patients alike.
While the approved RA drugs may lower inflammation and pain, prevent joint damage and slow the progression and pain, unfortunately there is no cure for RA. Roughly 1.3 million Americans have the disease, and 41 of every 100,000 people are diagnosed with RA each year.
Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) had very positive late-stage trial data for the treatment of RA back in 2016. The company’s Phase 3 monotherapy study in conjunction with Sanofi met its primary endpoint, demonstrating that sarilumab was superior to adalimumab (marketed by AbbVie as Humira) in improving signs and symptoms in patients with active RA. The drug is now known as Kevzara.
The Regeneron and Sanofi drug was approved by the FDA in May of 2017 for adults with moderate to severe active RA who have not responded well to or have an intolerance to disease-modifying anti-rheumatic drugs. Even after approval, Kevzara comes with a boxed warning label. What made the Regeneron team more hopeful in the study results back in 2016 was that the 369 adult patients who were enrolled and with active RA were considered to be inadequate responders to, intolerant of or inappropriate candidates for methotrexate.
Regeneron’s story has remained ever more tuned to its Eylea injection treatment, which is currently considered to be the most common and effective clinical treatment for advanced wet age-related macular degeneration. Regeneron also recently showed that it has about 15 studies ongoing for expanded uses for Eylea, and Eylea’s global sales in 2017 for Regeneron and its partners to share in were more than $5.9 billion. Kevzara revenues were a mere $13 million in 2017, with $9 million coming from the fourth quarter.
Unfortunately for Regeneron, and despite having seen its total revenues continue to grow for at least five years, Kevzara sales have been under expectations. The company’s overall sales growth and expected overall sales growth have not translated into a continued win for Regeneron’s shareholders since that Phase 3 data from two years ago.
Shares of Regeneron have traded in a rather wide range since 2016, and when the Phase 3 results were covered the shares were closer to $380. Zoom forward two years and Regeneron’s shares were last seen at $320 or so. That said, they have a 52-week trading range of $313.53 to $543.55.
Regeneron now has a $34 billion market capitalization rate. Its consensus analyst target price from Thomson Reuters is currently around $416, but that is down from almost $450 at the start of 2018. Analysts see sales of almost $5.9 billion in 2017 growing to $6.4 billion in 2018, just over $7.0 billion in 2019 and almost $7.8 billion in 2020.
AbbVie Inc. (NYSE: ABBV) is the clear leader among the RA drug class with Humira, but Humira is used for multiple indications, and other biosimilars will soon begin targeting Humira’s expensive price tag. AbbVie has faced some similar share price pressure as well, with the stock trading around $93 after peaking just above $125.
AbbVie recently showed that its experimental arthritis drug upadacitinib succeeded in its fourth (and largest) Phase 3 study, outperforming the placebo and also Humira in treating RA. The newer JAK1 inhibitor was shown to have helped more patients achieve a 20% improvement in joint tenderness through 12 weeks and it also exhibited a higher proportion of clinical remission than either Humira or placebo. This new drug could allow AbbVie to make up for lost revenues in the years ahead when Humira faces biosimilar competition. Humira has been the top-selling drug in the world.
Other competing drugs for RA also have multiple indications and approvals in other diseases and ailments tied to inflammation.
Pfizer Inc. (NYSE: PFE) announced in December of 2017 that the FDA approved its Ixifi as a biosimilar to Remicade for all eligible indications of the reference product. This indicated approvals for RA, Crohn’s disease, pediatric Crohn’s disease, ulcerative colitis, ankylosing spondylitis, psoriatic arthritis and plaque psoriasis.
In August of 2017, Boehringer Ingelheim Pharmaceuticals announced FDA approval for Cyltezo as a biosimilar to Humira in a prefilled syringe for the treatment of multiple chronic inflammatory diseases such as RA, severe polyarticular juvenile idiopathic arthritis and active psoriatic arthritis.
In April of 2017, Samsung Bioepis (Korea) announced that the FDA approved Renflexis as a biosimilar referencing Remicade across all eligible indications.
In September of 2016, Amgen Inc. (NASDAQ: AMGN) announced that the FDA had approved its Amjevita as a biosimilar to Humira for multiple inflammatory diseases that included RA and several other related inflammatory diseases.