By the time AbbVie brought its first drug for hepatitis C to market, in December 2014, it was already too late.
Twelve months earlier, Gilead Sciences had secured U.S. approval for Sovaldi (sofosbuvir), offering hepatitis C patients a once-daily treatment regimen capable of clearing the virus in as little as three months.
Sales eclipsed $10 billion in the first full year, the start of a dominant therapeutic franchise that would earn Gilead more than $50 billion between 2014 and 2017. AbbVie, Merck & Co. and Bristol-Myers Squibb were left as also-rans.
AbbVie's second go at the hepatitis C market, however, has turned out considerably better. Mavyret (glecaprevir/pibrentasvir), approved last August, has widely beat predictions and surged to over $1.8 billion in sales through the first six months of 2018. Its success is particularly surprising since the hepatitis C market has narrowed considerably since Sovaldi, with fewer patients starting treatment due to the high cure rate.
In doing so, Mavyret has also become a central part of AbbVie's push to diversify beyond its top-selling inflammatory disease drug Humira. But, analysts say, the drug is unlikely to continue its to-date rapid growth.
"I think over time there will be slow, steady-state erosion," said Vamil Divan, an equity analyst at Credit Suisse, in an interview. "I'd be surprised if it continued to grow significantly after this very strong start."
Mavyret arrived just as the rapid erosion of Gilead's hepatitis C revenues was becoming readily apparent. Yet AbbVie's drug was able to grab a sizable share of that shrinking market in relatively short order.
Particularly key to that strong start was Mavyret's price. AbbVie set the wholesale acquisition cost for the drug at $26,400 for an eight-week course of treatment, well below the list prices of Gilead's Harvoni (ledipasvir/sofosbuvir) for a longer 12-week regimen. (Although rebates and discounts offered by Gilead likely narrowed that gap.)
And unlike Merck's Zepatier (elbasvir/grazoprevir) — which had taken the role of Gilead's only real competition — Mavyret won an indication covering all six genotypes of hepatitis C, enabling broader uptake.
On recent earnings calls, AbbVie executives say its drug has secured access to to more than three-quarters of covered lives in the U.S., suggesting payers have been broadly receptive to the drug. Supporting that is the clear gains Mavyret has made in prescriptions written.
Just two quarters after launch, weekly new prescriptions of Mavyret had outpaced both Gilead's Harvoni as well as its newer entry Epclusa (sofosbuvir/velpatasvir), according to Iqvia data cited by Cowen. Currently, Mavyret's share of new prescriptions sits at about 50%, neatly counterbalancing the combined share of all of Gilead's offerings.
"Now, the question is how sustainable [that is] given the market dynamics in the space," Divan said.
AbbVie also appears a little uncertain. While the biotech raised its guidance for hepatitis C sales to above $3.5 billion for the year, it predicts a small decline in Mavyret sales during the third quarter. Some of Mavyret's uptake may have initially been due to patients who had failed other antiretroviral therapies, particularly in Japan, or were otherwise waiting for a new treatment option. Those patient starts may ebb, potentially cooling some of Mavyret's growth.
"We've seen those patients waiting for treatment, they've all now been treated. We've got the sales from those patients," explained Oliver Spray, an analyst at Informa Pharma Intelligence. "That is going to cause a step down in Q3, Q4."
Still, AbbVie appears confident Mavyret will be a cornerstone in its diversification plans for some years to come.
"This is a market that is going to be around for a long, long time," said AbbVie CEO Richard Gonzalez on a conference call in April. "I think, now, essentially you have us and one competitor who have the lion's share of this marketplace."
It's a market that continues to shrink, though. Data from Gilead shows the number of patients beginning treatment has steadily declined since 2015 and predicts future drops in all major markets this year.
Current therapies, including Mavyret and Gilead's drugs, are generally considered "curative," meaning patients who are successfully treated don't continue on past the eight- or 12-week regimen. While that's excellent news for patients, it has led to a smaller and smaller pool of patients awaiting treatment.
In a recent note to clients, Leerink analyst Geoffrey Porges labeled Mavyret's future growth opportunities as "tenuous," and noted his team had cut its revenue forecasts for the drug between 9% and 16% through 2022 to account for the expected slowing in the number of patients treated.
"Victim of their own success"
A $3 billion-a-year drug wouldn't be anything to scoff at. But, as a future where Humira no long enjoys exclusivity nears, AbbVie will need more than Mavyret to convince investors it can weather the coming hit to revenues.
Biosimilars to Humira will enter this year in the EU, and are expected to arrive in the U.S. in 2023. While AbbVie earns less in Europe from Humira than it does in the U.S, cheaper European competition will still act as a drag on the drug's growth between now and 2023.
"They are a victim of their success. Humira is just such a large product," Divan said. "It's tough for any company to replace an $18 billion product that's still growing."
Outside of Mavyret, AbbVie has found the most success with its cancer drug Imbruvica (ibrutinib), which it acquired three years ago. Revenues reported by AbbVie topped $2.5 billion last year and the company predicts sales could soon reach $4 billion. (J&J sells the drug outside the U.S. and splits profits with AbbVie.)
Another cancer medicine, Venclexta (venetoclax), and the recently approved endometriosis drug Orilissa (elagolix) round out AbbVie's slate of new growth drivers. Two experimental drugs could also prove a boon to the company in the coming years.
AbbVie's new growth drivers
|Most recent quarterly sales, millions
|Est. 2023 sales, millions
|Approved Nov. 2013
|Approved Apr. 2016
|Approved Aug. 2017
|Approved Jul. 2018
|NDA expected in Q4
|BLA submitted in April
SOURCE: Company, 2023 forecasts from Leerink
"There is a bit of time before 2023 to get these products up to speed," said Informa's Spray. "The products we're predicting will offset the decline for Humira are actually Imbruvica and Venclexta. "
Given Humira's size — the drug accounted for 65% of AbbVie's sales last year — the company remains exposed to risk of pipeline setbacks. Until the path for Humira is clearer, the stock will likely react sharply to news of clinical misses.
Mavyret's unexpected success to date has been a pleasant surprise, bolstering revenues and rebuilding confidence. But it remains just one piece in the still-unfinished puzzle of what AbbVie's post-Humira future looks like.