Lilly's JAK woes set the stage for AbbVie, Gilead to jump ahead
Things aren't looking great for Eli Lilly & Co.'s baricitinib. The rheumatoid arthritis medicine failed to impress Food and Drug Administration officials once already. Now on its second go-around, an Advisory Committee to the FDA has determined that only a low dose is safe and effective enough to warrant approval.
In a presentation earlier this week, regulators highlighted late-stage data showing more patients treated with baricitinib experienced thrombosis and elevated platelet counts than those receiving placebo. The safety signals helped to dim prospects for a 4 mg dose of the drug, while a 2 mg dose gained the advisory committee's support — albeit with considerable apprehension.
The decision presents AbbVie Inc. and Gilead Sciences Inc. an opportunity to jump ahead with their own rival candidates. Fortunately for both companies, the safety concerns plaguing Lilly's drug appear isolated. Yet they also have the potential to weigh down a still-emerging drug class, which could hurt sales in the long run.
Unique safety concerns
Baricitinib inhibits Janus kinases 1 and 2, members of an enzyme class known as JAKs for short. There are two JAK inhibitors for human use on the market (plus a third for animal use) and many more in the global pipeline, yet none have elicited the adverse events that caused concern over Lilly's drug.
The FDA has a theory on how the inhibition of JAK2 could increase platelet counts and the potential for venous thromboembolic events, but further investigation is necessary. In the meantime, rheumatology experts contend the agency may keep a closer eye on the JAK drug class and its potential hazards. As immunosuppressants, JAK inhibitors pose certain dangers such as increased risk of serious infection or malignancy, as exemplified by the black box warning on Pfizer Inc.'s Xeljanz (tofacitinib).
"Given the safety concerns with baricitinib and also with tofacitinib, I wonder if the ones in development will be more carefully scrutinized before they are approved, perhaps according to their JAK-specificity," Aruni Jayatilleke, an assistant professor in the division of rheumatology at Drexel University College of Medicine, wrote in an email.
That scrutiny could have wider implications.
"Though the FDA's suspicion of JAK2 inhibition and VTEs is favorable for AbbVie and Gilead's JAK1-specific inhibitors, the relatively negative perception of JAK inhibitors may lead to more limited labeling and decreased revenue expectations for the class," Leerink analyst Geoffrey Porges wrote in an April 23 investor note.
The revenue hit could easily amount to millions of dollars for each drugmaker. AbbVie, for instance, generously predicts its candidate upadacitinib will hit $6.5 billion in annual sales by 2025. And amid free-falling revenue from its hepatitis treatments, Gilead has pinpointed its offering, named filgotinib, as a potential source of short- and long-term growth.
Incyte bears the brunt
But even with those pressures, AbbVie and Gilead are sitting in advantageous positions.
Filgotinib has demonstrated a beneficial reduction of platelets, while a recent Phase 3 readout depicted similiar VTE rates among RA patients treated with upadacitinib or placebo. What's more, EvercoreISI analyst Umer Raffat noted in an email to BioPharma Dive that more data from other JAK inhibitors would be needed to see whether blood clots and platelet counts are a wider issue for the class.
"We believe both these JAKs still have an opportunity to thread the needle on dose, efficacy, safety, and tolerability with larger data sets and long-term follow-up, and then potentially be awarded with approval in broader all-comers populations," Porges wrote of upadacitinib and filgotinib in another April 23 note.
If approved, AbbVie's and Gilead's drugs wouldn't face a terrible amount of competition either. There's Xeljanz, which targets JAK1 and JAK3, and Incyte Corp.'s Jakafi (ruxolitinib), which targets JAK1 and JAK2. Each has been quite profitable, yet also carries its own safety warnings.
At the same time, Lilly's drug has become much less of a threat.
Analysts at one point anticipated baricitinib would join Xeljanz and Jakafi in the blockbuster club, but safety and dosing data have dampened its chances. Should the FDA ultimately approve its 2 mg dose or even the 4 mg dose, additional hurdles would stall Lilly from securing market share.
"It's going to be a last-line drug for the most part, so it's going to be a tougher-to-treat population," said Donald Miller, a professor of pharmacy practice at North Dakota State University and one of the advisory committee members who evaluated barcitinib's approval resubmission. "That's an issue, because the 4 mg dose might be better for the tough-to-treat population, but also that population ... is probably going to be a lot more tolerant to adverse effects."
Prescribers might very well be wary of baricitinib's costs too.
"All the new drugs right now for RA are really expensive, so I'm sure it will be in the same ballpark as Xeljanz for price," Miller said.
Such challenges are particularly troubling for Incyte, which is co-developing baricitinib. Shares of the Delaware-based biotech fell more than 20% in early April after the failure of a closely watched study that paired its IDO inhibitor epacadostat and Merck & Co.'s Keytruda (pembrolizumab).
Following the setback, Incyte CEO Hervé Hoppenot argued there were other important sources of growth in the business, including Jakafi and baricitnib. The advisory committee's iffy stance on the latter drug therefore adds further uncertainty to Incyte's future.
Lilly, on the other hand, isn't in such a pinch.
There are pressures, to be sure. Of the company's dozen drugs in late-stage testing, three are heading toward the ultra-competitive diabetes market and another two are targeting Alzheimer's disease, a risky bet for drug development.
But Lilly's portfolio looks like it can hold out for some time before it needs a new blockbuster — on Tuesday, it reported better-than-expected first quarter earnings, lifted by impressive performances from its diabetes medicines Trulicity (dulaglutide) and Humalog (insulin lispro).
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