AbbVie's (ABBV) Humira is now the best-selling drug in the world with global sales of more than $2.2 billion in the first quarter of 2013, up 17% from the same period of the previous year. AbbVie and Belgian company Galapagos are developing a new, orally available drug that may become the successor to Humira.
In 2012, AbbVie (then still Abbott Labs (ABT)) licensed the rights to GLPG0634, a selective JAK-1 (Janus kinase-1) inhibitor from Galapagos NV. Abbott paid a fee of $150 million upfront and will pay another $200 million upon successful completion of the rheumatoid arthritis Phase 2 studies.
AbbVie will assume sole responsibility for the Phase 3 trials. Galapagos would be eligible to receive additional milestone payments from AbbVie, potentially amounting to $1.0 billion, in addition to tiered double-digit royalties on net sales upon commercialization. The stiff price paid underscores the significance attached to the new drug.
The deal gives AbbVie access to what may be the best in a "new wave" of pills against a disease that's now treated with injections. GLPG0634 is an orally-available, novel Janus kinase (JAK) inhibitor with selectivity for JAK1 developed by Galapagos.
JAKs are critical components of signaling mechanisms utilized by a number of cytokines and growth factors, including those that are elevated in rheumatoid arthritis patients. JAK inhibitors have shown long-term efficacy in rheumatoid arthritis studies with an early onset of action.
GLPG0634 is different from other JAK inhibitors in development that it specifically targets JAK1, a strategy that may result in a better efficacy and safety profile.
Crohn's disease added
AbbVie and Galapagos have recently agreed to expand their collaboration to include Crohn's disease. Galapagos plans to fund and launch a midstage study of GLPG0634 in Crohn's disease by early 2014, with results expected by the middle of 2015. Upon successful completion of the trial, AbbVie will pay Galapagos $50 million. The Crohn's trial is expected to run in parallel with the rheumatoid arthritis study. The Crohn's study will be a 20-week, Phase 2 a & b trial enrolling 180 patients. It will measure both the rate of disease remission and the maintenance of its beneficial effects.
Crohn's disease is a type of inflammatory bowel disease in which the well-controlled balance of the intestinal immune system is disturbed. The disease causes ulcerations of the small and large intestines, but may affect any part of the digestive system from mouth to anus. The cause of the disease is unknown and there is no cure. It starts usually between the ages of 15 and 35. Patients suffer from abdominal pain, diarrhea (often bloody), vomiting, fever, and weight loss.
Treatment options today are restricted to controlling symptoms, and preventing relapse by the use of drugs that suppress the inflammation or the immune system, antibiotics, and eventually surgical removal of the inflamed bowels. The disease affects a million people in Europe and more than 500,000 people in the U.S.
The Janus kinases are a family of enzymes that play a key role in the signaling mechanism used by a number of cytokines that are involved in autoimmune diseases. By inhibiting JAK1, GLPG0634 blocks signaling for several key pro-inflammatory cytokines such as interleukin 6 (IL-6).
The fact that it avoids inhibition of JAK2 is a unique advantage as inhibition of JAK2 has shown anemia and reduced formation of blood cells in trials. Crohn's sufferers already have blood loss often from gastrointestinal bleeding.
Underlying its interest in the field, AbbVie in a separate development has signed a collaboration deal with Alvine. Alvine is developing a new drug in celiac disease. Celiac disease is another autoimmune disorder that involves inflammation in the GI tract. Alvine Pharma is a San Carlos, California-based, privately-held company.
Humira, as you recall, is approved, among other things, for Crohn's disease and ulcerative colitis.
At the annual EULAR (European League Against Rheumatism) conference in Madrid, Galapagos presented early results of a 4-week Phase 2a dose ranging, multi-center trial of GLPG0634 in patients with rheumatoid arthritis.
Safety and efficacy of doses from 75 - 300 mg was well tolerated, with an absence of the typical side effects reported with other JAK inhibitors: there was no anemia, no overall change to LDL (the so-called bad cholesterol) or ALT (a liver function test), also there was no neutropenia (low level of certain white blood cells). The 150 mg group showed a robust response.
However, the 4-week duration of the trial was too short to reach a meaningful conclusion from scores such as pain assessment, global assessment, HAQ-DI (Health Assessment Questionnaire Disability Index). Larger and longer term studies in arthritis are being initiated.
Currently the market for drugs against rheumatoid arthritis is dominated by injections such as Humira, Johnson & Johnson's (JNJ) Remicade and Amgen Inc.'s (AMGN) Enbrel, which Pfizer shares. These injections block a protein called TNF, that is overproduced by patients with the condition.
The recent CHMP's (Europe's Committee for Medicinal Products for Human Use) negative opinion on Pfizer's Xeljanz highlights the importance of having an established clinical presence in autoimmune diseases. CHMP has advised not to approve Xeljanz to treat rheumatoid arthritis, advice which Pfizer immediately appealed. Humira benefits from this kind of publicity and it should continue to grow as biologics gain deeper penetration in the autoimmune markets driven by aggressive treatment strategies.
Analysts at JMP Securities note that efficacy of the Jak-1&2 inhibitor remained consistent between weeks 24 and 52, indicating a strong durability of benefit. The rates of infection were also similar.
While the data is encouraging and, according to analysts at BMO Capital, on par with biologics and Pfizer's Xeljanz, barcitinib is at least three years behind Xeljanz. The Phase 3 program is set to complete in the second half of 2014, with data expected on patients who have inadequately responded to biologics.
AbbVie is highly dependent on Humira sales, which in 2012 came in at $9.3 billion. AbbVie's total revenues in the first quarter of 2013 were $4.32 billion, Humira sales represent some 51% of that. While sales are forecast to reach $10 billion for the current year, Humira is coming close to the end of its patent exclusivity.
Based on Abbott's SEC filing, the U.S. composition of matter (that is compound) patent for Humira is expected to expire in December 2016 and in the majority of the European countries by April 2018. Humira being a biological drug, a biosimilar competition could still be further away.
AbbVie is projecting a diluted earnings-per-share for 2013 of $2.66 to $2.76 on a GAAP basis.
Conclusion: AbbVie's immediate future is well-secured. However, it is not easy to develop another blockbuster in a couple of years. If the new oral equivalent of Humira proves to be safe and covers most of the injected drug's indications, that would go a long way to improve AbbVie's prospects.