Pharma of the Year: AbbVie
2017 expected Humira sales:
A growth stock
Spun out from Abbott in 2013, AbbVie closed its first-ever day of trading at $35.12. The pharma now trades at nearly $95/share, up 51% in this year alone.
Cancer drug Imbruvica brought in $1.2 billion in the first half of 2017, up 43%.
With major trial readouts expected before year's end and others in early 2018, AbbVie's pipeline is expected to close the year out strong.
When Abbott Laboratories announced the spin out of AbbVie Inc. in 2012, part of the reasoning was to limit its exposure to the eventual loss of exclusivity on the blockbuster drug Humira (adalimumab). While the drug's sales were about $8 billion in 2011, Humira was already expected to be a liability if Abbott couldn't make up for those revenues elsewhere. Fast forward five years and Humira brings in annually double what it did in 2011 and, right now, there is no holding this drug back.
Calling the best-selling drug in the world its own is just one reason AbbVie was chosen as BioPharma Dive's Pharma of the Year. While the drugmaker's dependence on Humira has long made investors nervous, the company's ability to continue to grow this franchise is one of its biggest strengths.
In fact, AbbVie expects Humira to hit $21 billion in revenues in 2020 — that is more than most mid-sized pharmas bring in during a full year from their entire portfolio. Competition isn't expected for Humira in Europe until 2018 and isn't likely to enter the U.S. market until 2023. Biosimilars have so far not been taking much market share from their reference products or competing products in the same indications, alleviating some of the pressure. And if biosimilars continue to compete as they are now, they won't chip away at the Humira dynasty as fast as might be expected.
Steady growth has made Humira the world's top-selling drug
But it isn't just the unstoppable Humira that makes AbbVie so special. It's the growing pipeline the company has quietly built while everyone marveled at the blockbuster rheumatoid arthritis drug.
AbbVie currently has one drug under review at the FDA, along with six late-stage drugs in its pipeline. These drugs, together with a couple recently approved products, are expected to contribute $25 billion to $30 billion in peak sales over coming years.
Elagolix, for example, has a user fee goal date with the Food and Drug Administration in April 2018 for the treatment of endometriosis. It is also being studied for uterine fibroids. Patients with these conditions don't have many treatment options, and there are currently about 7.5 million women in the U.S. with endometriosis. Another three million have uterine fibroids. Analysts estimate this drug could have sales of greater than $1 billion by 2022.
Two of the most promising late-stage drugs in AbbVie's pipeline, though, are both anti-inflammatory products that could be next-gen products to Humira. Risankizumab is an interleukin-23 blocker that has proved superior to both Humira and Johnson & Johnson's Stelara (ustekinumab) in head-to-head studies of patients with psoriasis. The strong results set it up for a filing sometime next year, with commercialization expected in 2019. Analysts estimate it could have peak sales of $1.5 billion in the psoriasis indication alone.
Risankizumab is also in mid- and-late stage studies for Crohn's disease, ulcerative colitis and psoriatic arthritis. Because the drug has a less onerous dosing schedule than other treatments currently on the market, risankizumab is considered highly differentiated in an already crowded market.
AbbVie's other major immunology contender is upadacitinib, which has shown positive results in late-stage rheumatoid arthritis studies and is expected to be filed for approval in the U.S. next year as well. The drug is a Janus kinase (JAK) 1 inhibitor that is expected to have an improved safety profile due to its greater specificity than Pfizer's Xeljanz (tofacitinib), which is a JAK 2/3 inhibitor. This drug is in mid-to-late stages in Crohn's, ankylosing spondylitis, ulcerative colitis and atopic dermatitis. AbbVie is pinning $4 billion of its future hopes on this compound.
While long a leader in immunology, AbbVie has been growing its presence in oncology as well, with the expectation that the unit will exceed $15 billion in peak sales someday.
AbbVie made a major commitment to the space with the $20 billion acquisition of Pharmacyclics LLC in 2015 in order to grab the Bruton's tyrosine kinase (BTK) inhibitor Imbruvica (ibrutinib). The drug is expected to have nearly $2.5 billion in sales this year and could reach $5 billion in sales by 2020. Cowen analyst Steve Scala noted in a September report to clients that "Imbruvica's commercial momentum will be difficult to stop." The drug already has approval in five indications and the company is developing the drug in several more.
The recently approved Venclexta (venetoclax) also stands to be a major contributor to AbbVie's future growth — although profits are split 50/50 in the U.S. with partner Roche AG. The drug currently caters to a small patient population of chronic lymphocytic leukemia (CLL) patients with more severe prognosis, but has a Breakthrough Designation in relapsing/remitting CLL patients, and is being explored in several other hematological malignancies. The drug could contribute as much as $1.5 billion in five years time.
Beyond these highlights, AbbVie has several other collaborations and earlier pipeline oncology projects that will be future growth drivers as the company prepares for an eventual future beyond Humira.
Expect further read-outs in the first quarter from studies of Imbruvica, risankanumab and upadacitinib that could help bolster each drug, adding to the positive momentum for AbbVie.
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