As most Abbott (NYSE:ABT) investors know, the company will be splitting into two entities in the near future. One of the companies will be called AbbVie and will essentially take over Abbott's pharmaceutical business. When AbbVie becomes an independent company it will depend almost exclusively on Humira for all of its profits and revenue. Humira will be facing competition from a variety of new oral JAK inhibitors including tofacitinib which was recently recommended for approval by the FDA's expert panel. Also in 2016 Humira's patent will expire and it will face generic competition. While biologics currently don't face the dramatic free fall that regular compounds do when their patents expire, there is no doubt that Humira sales will start to steadily decrease. AbbVie will try to prolong this process by adding new indications but declining sales is inevitable. So with this article I am trying to provide investors of Abbott a look into how much potential AbbVie's pipeline will have in the post Humira world.
In an era where pharmaceutical companies are constantly coming out with "me too" drugs and reformulations, Bardoxolone is a breath of fresh air. This drug has the potential to be a true game changer in the treatment of Chronic Kidney Disease. Currently treatments such as ACE inhibitors and ARBs can only slow the progression of CKD. Bardoxolone looks as though it might have the potential to reverse it. Bardoxolone is currently undergoing a Phase III trial in patients that have Stage 4 CKD and Type 2 diabetes. The study will most likely report its data in mid 2013. Abbott is shooting for a 2014 entry if everything goes according to plan.
Phase II data for Bardoxolone was very positive. The study compared a variety of doses of Bardoxolone to placebo in patients who were suffering from severe kidney disease. The results showed that all three doses of Bardoxolone increased GFR compared to placebo. Patients taking Bardoxolone were more likely to suffer a variety of adverse events including muscle spasms and hypomagnesemia compared to placebo. Enthusiasm has been tempered a bit by the possibility that other factors might be the cause of the increased GFR. The Phase III trial previously mentioned is measuring for patient outcomes such as cardiovascular death, renal transplants, and need for dialysis so the questions into Bardoxolone's true effectiveness will be answered soon. Of all the drugs in Abbott's pipeline Bardoxolone probably has the most sales potential, and could become a true blockbuster.
Daclizumab is a drug being developed by Abbott with the help of Biogen (NASDAQ:BIIB). A monoclonal antibody used to treat Multiple Sclerosis, unlike many other injectable treatments for MS Daclizumab is only taken once a month. It will be facing competition from a variety of established treatments and soon to be approved oral medications. As with most of the drugs I've included, Daclizumab had excellent phase II data. It was well tolerated compared to placebo and reduced annual relapse rates by over 50%. Daclizumab's next step is its phase III trial, which is just getting started and will be called DECIDE. It will most likely report results in about 3 years. Even if Daclizumab reports excellent phase III data it will be difficult for it to stand out among numerous treatments available. It will have to rely on an excellent safety profile and infrequent dosing schedule to build its sales. If this drug is approved,` look for it to start with low sales and slowly grow them from there.
Elotuzumab is a developing treatment for multiple myeloma. Multiple myeloma is a cancer that affects the plasma cells in the blood and has a five year survival rate of only 35%. Phase II data showed that when combined with lenalidomide and dexamethasone, elotuzumab achieved its primary endpoint 90% of the time. The primary endpoint defined by the study was a partial or better response as determined by IMWG criteria. Elotuzumab is currently undergoing a phase III trial and could be approved in the next couple years.
Hepatitis C has become a hot disease state in the last few years for drug manufactures. With a projected market of 12 billion by 2015, many pharma companies are coming out with their own treatments to capture a piece of the pie. This means ABT-450 will be entering a crowded and competitive market place. What makes ABT-450 special is that it is taken orally while many of the new Hepatitis C drugs are given as injectables. This will lead to ease of administration for patients and possibly decreased manufacturing costs for AbbVie.
So far ABT-450 has completed 2 small phase II trials. The first trial, called Co-Pilot, treated 50 patients with a cocktail of medications that included ABT-450. Cure rates were over 90% for patients with no previous treatment and cure rates approached 50% for patients that had failed previous treatments. Although no serious side effects were reported, this was an extremely small trial so it is difficult to determine how ABT-450 will be tolerated in the long run. The second study was even smaller, testing only 11 patients that had not been treated before. These patients had a specific type of Hepatitis C that responds well to Interferon. Once again ABT-450 was given as a cocktail and 10 of the 11 patients were cured. If phase III trials are successful, a cocktail including ABT-450 could be on the market by 2014. What percentage of the 12 billion dollar Hepatitis C market ABT-450 will capture it difficult to estimate. However given that ABT-450 is given orally and Abbott has a couple other Hepatitis C compounds in its pipeline that could be included in part of a cocktail, sales approaching a billion are certainly achievable.
Endometriosis is a complicated disease that can cause debilitating pain in women. Currently there are limited treatment options for the estimated 100 million women suffering from Endometriosis. Elagolix is a oral gonadotropin-releasing hormone antagonist that Abbott is developing with its partner Neurocrine Biosciences (NASDAQ:NBIX). Initial phase II data was very promising, meeting all primary and secondary endpoints including decreasing dysmenorrhea and pelvic pain compared to placebo. Abbott and Neurocrine recently announced they have initiated a phase III trial studying Elagolix in the treatment of women with endometriosis. Elagolix is also currently undergoing a phase II trial studying its effectiveness in the treatment of uterine fibroids. Abbott is hoping to have a NDA submitted to the FDA by 2016. While Elagolix probably won't reach true blockbuster status it could add a few hundred million in revenue a year to AbbVie's coffers.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.