- Regulatory agencies in Europe and Japan have given the green light to a new rheumatoid arthritis drug from the Belgian biotech Galapagos and its partner Gilead Sciences, approvals that provide a bit of respite for the companies following a recent setback in the U.S.
- Some investment banks foresee the drug, which was known as filgotinib before getting the brand name Jyseleca, surpassing $100 million in sales next year and hitting blockbuster status over the next decade. The U.K.-based National Rheumatoid Arthritis Society estimates that the disease affects around 3 million people in Europe, while in Japan, studies have indicated that roughly 1 million people have it.
- Yet, in spite of their forecasts, analysts expect Jyseleca's growth will be slow as Galapagos and Gilead build inventory and try to navigate the country-by-country reimbursement system in Europe. The rheumatoid arthritis drug market is also very crowded, making it more challenging for the Jyseleca to carve out a sizable share.
Jyseleca's success is crucial to both its backers. For Galapagos, it could underscore the company's research and development skills — which, for any growing biotech, are key to attracting new partners and investors. For Gilead, it could show sound decision-making, since Jyseleca is at the center of the $5 billion pact that it pushed for with Galapagos.
Wall Street's confidence in the drug recently wavered, however, after the Food and Drug Administration issued a surprising rejection in August. The agency wanted more data regarding Jyseleca's effects on sperm count, a request that likely won't allow Gilead, which holds rights to the drug in the U.S., to refile for approval until mid-2021.
"We suspect that inside Gilead the filgotinib program may be gradually deprioritized, potentially ending up on 'life-support' pending clarity about the timing, profile and probability of approval," wrote Geoffrey Porges, an analyst at SVB Leerink, in a note following the FDA rejection.
The approvals in Europe and Japan offer some relief for the brand. Analysts at Stifel note that the Europe and Japan markets combined are about the size of the U.S. market. For those geographies, they envision Jyseleca's peak sales in rheumatoid arthritis reaching about $2.5 billion by 2030.
Jyseleca is part of a class of drugs that work by inhibiting inflammatory proteins called JAKs. Other members of the class include Pfizer's Xeljanz, Eli Lilly's Olumiant and AbbVie's Rinvoq. Though JAK drugs have been weighed down by safety concerns and competition from well-established biologic agents like Humira and Enbrel, they've more recently been able to make inroads. Global sales of Rinvoq, for example, rose almost 75% between the first and second quarters of this year.
Analysts at Raymond James expect that Jyseleca's early performance outside the U.S. will be similar to that of Xeljanz, which received approval as a rheumatoid arthritis treatment in Europe in early 2017. The investment bank models $18 million in sales across several European countries and Japan for the rest of the year. For 2021, the estimate increases to $147 million.
Yet, with so many treatment options for rheumatoid arthritis, those sales might not come easy. Gilead and Galapagos will need a convincing argument as to why their product is different than the JAK inhibitors that came before. That may be more of a challenge too, given that safety issues are top of mind following the FDA rejection.
"In our view, the resolution of the [rejection letter] remains the next major catalyst for shares," Stifel analyst Derek Archila wrote in a Sept. 28 note to investors. "Also, we think as the fourth to market JAK in the EU, it will be a battle for market share against heavyweights."