Pharma’s mammoth immunology market? It’s only getting bigger: analysts

Think the success of several megablockbusters such as AbbVie’s Humira means the anti-inflammation market is fully saturated? Think again.

The autoimmune/inflammatory space has witnessed some of the best-selling drugs. But despite generally being considered crowded, the market still has a lot of room for growth, a team of Credit Suisse analysts said in a Wednesday note to clients.

Even in some well-established disease categories, “new mechanism biologics, novel oral agents, and even biosimilars are all pro-growth factors that support expansion of penetration,” the analysts argued.

Overall, the rheumatoid arthritis and psoriasis markets are largely mature, but could see around $5 billion to $10 billion in expansion, according to Credit Suisse’s projection. Inflammatory bowel diseases—including ulcerative colitis and Crohn’s—together generated around $16 billion in 2018 global sales, but in the analysts’ model, the market could grow to as large as $27 billion. The atopic dermatitis and asthma markets are the least full, with each holding the potential for an additional $7 billion to slightly over $10 billion in sales.

Anti-TNFs, such as Humira, Amgen and Pfizer’s Enbrel, and Johnson & Johnson and Merck & Co.’s Remicade, have well established themselves as the first-line biologics for the treatment of autoimmune/inflammatory indications. However, their efficacy in the real world may fade over time in some indications. A recent meta-analysis published in Nature found high discontinuation of those top-selling anti-TNFs in treating psoriasis. When that happens, physicians will generally consider drugs with a different mechanism of action, according to Credit Suisse.

Compounds with novel mechanisms are generally welcomed, as they can benefit patients who do not respond to or have relapsed on older treatments. Take Novartis’ IL-17A inhibitor Cosentyx, for example. The drug was launched against three anti-TNFs, J&J’s IL-12/23 inhibitor Stelara and Celgene’s PDE4 inhibitor Otezla.

“Physicians we spoke to believe Cosentyx was the first agent with a noticeable efficacy improvement vs. approved therapies at launch, which led to broader utilization as a second-line biologic,” the analysts wrote. In the fourth quarter of 2018, Cosentyx’s sales grew $56 million over the previous quarter, reaching $806 million, and the company expects to see increasing demand ahead.

The asthma biologics market is also growing at a fast pace as new treatments are hitting the scene. According to Credit Suisse’s tally, sales have swelled from $1.1 billion in 2011 to $3.5 billion in 2018. As physician feedback suggests a very small biologics penetration, the analysts are projecting $10 billion to $15 billion sales at peak.

In that field, AstraZeneca’s IL-5 Fasenra is marching ahead, as is GlaxoSmithKline’s rival med Nucala. Sanofi and Regeneron’s IL-4 receptor antagonist Dupixent, with a winning label from both an efficacy and a safety perspective, could also add $2.5 billion in sales with a recent nod as an add-on maintenance treatment in eosinophilic asthma, SVB Leerink analyst Geoffrey Porges said last October.

Route of administration could also be another approach to help drugs expand their reach. “Patients’ general aversion to injectables offers an opportunity for novel orals with amenable clinical profiles to enter mature markets and expand/take market share,” the Credit Suisse team noted. And of course, differentiation in safety or efficacy is a plus.

Oral JAK inhibitor Xeljanz, approved for psoriatic arthritis, rheumatoid arthritis and ulcerative colitis, has become one of Pfizer’s growth engines lately, having increased sales by 32% in 2018, to $1.77 billion. New JAK drugs such as AbbVie’s upadacitinib and Gilead’s filgotinib are both expected to cross the blockbuster threshold by 2024, according to EvaluatePharma’s 2018 in Review report.

But members of the up-and-coming JAK class, including Xeljanz, have run into safety hurdles, leaving the door open for competition. Just look at the multiple sclerosis market for proof that followers that act on traditional targets but have been able to demonstrate better safety or efficacy do indeed have a chance.

In MS, Biogen’s Tecfidera was the third oral option to market, launched in the face of Novartis’ formidable Gilenya. But it achieved $3.6 billion in annual sales within three years, mainly thanks to its better safety profile, with no first-dose monitoring for cardiac complications, the analysts said.

MS newcomer Ocrevus, which Roche touted as the company’s best launch in its 122-year history, reached $2.4 billion in just its second year on the market. Credit Suisse analysts attributed the fast uptake to physicians’ familiarity with off-label use of Ritxuan, a fellow anti-CD22 therapy, as well as Ocrevus’ efficacy and a safety score that topped that of Biogen’s Tysabri.

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