Teva Or Amgen/Novartis, Who Will Win The Battle For Migraine Market Share?

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Includes: AMGN, NVS, TEVA
by: Christiana Friedman
Summary

Teva and Amgen both have potential blockbuster migraine drugs on tap for FDA review, Amgen in May, Teva in June.

Both drugs have the same mechanism of action, but there are differences in dosing and specific migraine indications.

Here I look at the advantages and disadvantages of both drugs to determine who might win out on market share.

Teva Pharmaceuticals (TEVA) and Amgen (AMGN) both have important dates with the FDA for their new migraine drugs this year, both expected to be blockbuster. Amgen’s PDUFA date, partnered with Novartis (NVS), is in May, and Teva’s is one month later in June. Both are expected to be approved. There are two other companies developing competitors but both are slightly behind these two. Alder Pharmaceuticals (ALDR) has yet to file an approval application and Eli Lilly (LLY) just had its own accepted in December, so the initial race for market share will be between Teva and Amgen/Novartis. Who will win? Let’s compare the drugs to try and see.

Both drugs have the same mechanism of action. They are anti calcintonin gene-related peptide drugs, or anti-CGRP, a new concept in migraine treatment. CGRP levels in the brain are known to increase following migraines, and studies have found that increasing CGRP levels actually induces migraines. The CGRP receptor triggers dilation of blood vessels and inflammation in the brain, which is theorized to cause, or at least contribute to, migraine headaches.

Both drugs bind to the CGRP receptor, blocking it, with the theory being that this can help stop or mitigate migraine headaches. Since the cause of migraines is largely unknown, the CGRP link with migraines was mostly a hunch. Researchers pursued it, and so far the hunch is being confirmed in late stage trials.

Which gets the most market share will obviously depend on marketing efforts also, but let’s just focus on the differences between the drugs. Which has the best results with the least side effects for the most indications, which is the easiest to take for patients, and which will be cheaper are all critical for the first sprint out the gate.

The global migraine market it set to grow to about $8.7B by the mid 2020’s, so there is a lot of revenue to fight for here.

Amgen and Novartis

This Big Pharma duo is due for a date with the FDA on May 17th for the candidate Aimovig for episodic migraine. Here is what investors should know about the drug and its potential attractiveness for migraine patients. First, it is a fully human monoclinal antibody as opposed to humanized. Fremanezumab, Teva's candidate is humanized, which means it is genetically engineered to match human cells. Fully human as opposed to humanized doesn't make Aimovig any better or worse necessarily, but it could provide an advantage in terms of long term side effects and tolerance down the road. All other things being equal, it is preferable to introduce an antibody that is fully human rather than one that is engineered to match human biology. Whether that holds in this case remains to be seen though, and it will take quite a while to determine any long term side effects.

The Phase III trial that Aimovig’s approval will be based on enrolled 955 patients with episodic migraine with an average 8.3 monthly migraine days. It was a 6-month study on either 70mg, 140mg, or placebo by injection once a month. The 70mg dose saw a 3.2-day reduction in migraine days (38% reduction overall), and the 140mg dose saw a slightly better 3.7-day reduction (44%), versus only 1.8-day reduction for placebo. Half of all patients on the high dose saw a 50% decrease or more in migraine days.

Safety was similar to placebo, so Aimovig will probably be approved. The bullet points to keep in mind are:

  • Injection once a month
  • Phase III for episodic migraine only (not chronic)
  • 50% of patients on 140mg having 50% fewer migraine days
  • The only fully human monoclonal antibody CGRP agonist

Teva

Teva’s fremanezumab is due for an FDA decision in June. Fremanezumab seems to have two main advantages over Aimovig. First, Phase III trial data showed that it is effective in treating and preventing both episodic and chronic migraines, whereas Aimovig’s Phase III trial only treated episodic. Second, fremanezumab trials tested quarterly dosing in addition to monthly dosing, so patients on fremanezumab may have the option to take only four shots a year instead of 12.

One possible disadvantage though for Teva is that the fremanezumab dose required is much higher at 675mg on the first injection. That's almost 10x the low dose of Aimovig, and 5x the high dose. For the monthly regimen, injections are 225mg per month, still nearly twice the Aimovig high dose and over 3x the low dose. That the doses for fremanezumab are much higher may make fremanezumab more expensive than Aimovig, though pricing has not been explicitly discussed by any company yet. There also may be more long term side effects due to the much higher dosage, though we won't know this for a while.

The results for chronic migraine were 38% of the quarterly group and 41% in the monthly group showing a 50% or more reduction in headache days per month. For episodic, 48% of patients showed a 50% reduction in the monthly dosing group, and 44% in the quarterly group. These were very similar results as Aimovig for episodic.

Bullet points for comparison:

  • Fremanezumab trialed for both episodic and chronic migraine, Aimovig only episodic
  • Fremanezumab much higher dose than Aimovig could make it more expensive
  • Fremanezumab has option to dose once quarterly or monthly, Aimovig only monthly
  • Fremanezumab is humanized, Aimovig fully human

Conclusion

Lining the two up, fremanezumab has the dosing regimen advantage and is trialed for both episodic and chronic patient populations. That gives Teva the indication advantage as well. However, Aimovig will probably have a cost advantage considering the dosing size, and it is a fully human antibody.

All things considered, I believe the bottom line will come down to cost. If the two are similarly priced, fremanezumab looks to have the edge by indications and a quarterly dosing regimen option. If fremanezumab is considerably more expensive though, doctors may prescribe Aimovig off label for chronic sufferers and Aimovig will win out.

In terms of allocating positions, Teva is the much riskier play because its future likely depends on the success of fremanezumab. Teva's future is already quite shaky and it is rolling over debt and restructuring its whole business in a bid to survive. If fremanezumab takes the lead then, the stock will move much higher, more than a large cap pharma normally would on the success of a single drug. But if numbers are disappointing, Teva shares could take a real beating toward new lows.

Amgen and Novartis are safer picks, though with less potential upside. Since they are splitting revenues, the impact on each will be less than it would be on Teva and neither Amgen nor Novartis are anywhere near lows. Amgen's dividend is also quite high for a biotech stock, over 3%, whereas Teva no longer has a dividend for now.

Disclosure: I am/we are long AMGN, TEVA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.