On Monday, AbbVie (NYSE:ABBV) reported positive phase 3 results in treating patients with rheumatoid arthritis. This positive data was achieved using the company's drug known as upadacitinib, which is a JAK1 inhibitor. This positive data lends credentials that AbbVie might be able to save itself once its Humira patents end in 2023. The reason being is that Humira is responsible for treating a multitude of immunological diseases, including rheumatoid arthritis. AbbVie is laying the groundwork to maintain its sales after Humira goes off the patent cliff. These positive phase 3 results are a step in the right direction in accomplishing this task in my opinion.
Before diving into the results, I wanted to point out a news piece I wrote for Seeking Alpha by the name of "Biotech Analysis Central Pharma News: Allergan and Richter's Success, Sellas Life Sciences' Breast Cancer Data, AbbVie's Patent Boost". The reason for bringing up this article is because I discuss in detail about the patent issue that is surrounding AbbVie. In that article, I make note of the company creating deals with Amgen (AMGN) and Samsung Bioepis to keep biosimilars of Humira off the market until 2023. I also make note that in order for AbbVie to maintain its legacy and not feel pain for the patent loss of Humira, it has to find a clinical product that can potentially replace it. One of those drugs is this rheumatoid arthritis drug upadacitinib, which targets a very large market. Well, that's good news for AbbVie. That's because it has just reported that its phase 3 trial treating patients with rheumatoid arthritis met the main goal (primary endpoint) of the study. The phase 3 study tested AbbVie's drug upadacitinib against a placebo in patients with rheumatoid arthritis. The trial met on all the primary and secondary endpoints of the study. It was shown that after 12-weeks of treatment, patients treated with upadacitinib met both primary endpoints of ACR20 and clinical remission versus placebo. In addition, AbbVie's drug was able to meet on all secondary endpoints as well. This bodes well for AbbVie because it could eventually file for approval for upadacitinib in rheumatoid arthritis. The reason why I state "could eventually file" is because this is the 4th late-stage study out of 6 in total. That means that AbbVie doesn't expect to submit an NDA for upadacitinib for rheumatoid arthritis until the second half of 2018.
As I stated before, the most important aspect of these results was to prove that upadacitinib was somehow superior over Humira. That's so AbbVie can overcome the patent loss of Humira in 2023. Well, things seem to be looking up. That's because this phase 3 study showed that after 12 weeks of treatment with upadacitinib, superiority was achieved over Humira on the ACR50 criteria scale. The ACR scale measures the effectiveness of a drug compared to a placebo as a percentage at two time points for rheumatoid arthritis. These time points are from baseline and post-baseline. In the ACR20 criteria, there was a 71% improvement with upadacitinib compared with 63% for those on Humira. As noted above, the ACR50 was the strongest measurement of superiority with 45% for those treated with upadacitinib versus only 29% for those on Humira. This is an important finding for AbbVie simply because it is able to claim superiority in ACR50 compared to Humira. That means, should this drug make it to market, it could end up replacing Humira. That means the biosimilars won't be a major problem when they actually do make it to market in 2023. AbbVie says that despite the competitive nature in the rheumatoid arthritis space, it believes that should upadacitinib receive FDA approval, it could still net $6.5 billion in sales yearly.
AbbVie achieving positive phase 3 results for this fourth phase 3 study in treating patients with rheumatoid arthritis with upadacitinib is a step in the right direction for AbbVie redeeming itself. Especially, since its Humira drug is going to go off patent in 2023. There will be a host of competition against Humira, which brought in over $18 billion in sales last year. The risk is that the remaining two studies to report data may or may not come out with a positive outcome. In that case, it could end up being difficult for upadacitinib to receive FDA approval. I believe that AbbVie has done more than enough to establish the efficacy of upadacitinib compared to placebo. I believe that the last few studies will also be highly positive as well. For that reason, I believe that AbbVie remains a strong buy.
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