Amgen Inc. having scored the first of four expected approvals in the calcitonin gene-related peptide (CGRP) receptor class with Aimovig (erenumab) for preventing migraine, Wall Street set about handicapping odds for the others in a large market.
Jefferies analyst Michael Yee noted that Thousand Oaks, Calif.-based Amgen will "take some time to get contracts and on formulary, and many contracts may require failure of Botox [onabotulinumtoxinA, Allergan plc]" before allowing Aimovig. However, Botox is cleared only for chronic migraine and sells about $500 million per year, whereas Aimovig won the nod for episodic as well as chronic – and the episodic market is three times the size of the chronic market. Amgen has estimated that as many as 10 million patients could benefit from a CGRP therapy. Aimovig is self-administered by way of the Sureclick autoinjector, which does not require a loading dose.
Labeled for 70-mg and 140-mg dosing, Aimovig bears a gross list price is $6,900 per year, in line with Botox and lower than the $7,000 to $10,000 that many analysts predicted. "Clearly, in today's world, with the present rules, around engagement, we are required to offer rebates to both payers and insurers in order to get access to a better utilization management criteria program," Anthony Hooper, Amgen's vice president of global commercial operations, told analysts during a conference call Friday. "We believe the product will be used after patients have failed, and that's always been our strategy."
Out-of-pocket costs vary according to insurance plans, but Aimovig has a copay program that could drop such costs to as low as $5 per month.
Leerink analyst Geoffrey Porges called Aimovig's label "as broad as we could possibly have imagined" and said "the lack of any cautionary or warning language adds to the appeal of the product's profile." He said in a report that Amgen, partnered with Basel, Switzerland-based Novartis AG, has "avoided the pitfalls of excessive pricing in this kind of high-volume indication." Consultations with key opinion leaders ahead of the approval suggested "a warehouse of patients who have already passed through the required step-edit drugs, and are now waiting for the first anti-CGRP agent," he said. "As a result, we believe Amgen will benefit significantly from its first-mover advantage, and ultimately retain 35-40 percent market share long-term."
Amgen has, "somewhat inexplicably," partnered the commercialization of Aimovig with Novartis, he noted, and as a result will enjoy about 80 percent of the profits in the U.S., and an estimated 15 percent of sales, or up to about 20 percent to 25 percent of the profits on sales outside the U.S. He forecast that Aimovig will achieve sales of $1.8 billion by about 2025, and ultimately contribute about 7 percent to Amgen's total revenues, though the product sales will not be "large enough to materially grow revenues for the company in the face of multiple biosimilars for [the company's] large legacy products," in his view.
Amgen's Hooper acknowledged that "being first-to-market is a huge and distinctive advantage," and pointed to "a large pent-up demand in the marketplace for a drug that truly is designed to treat migraine, such as Aimovig is." But more candidates are coming. A handful of follow-on CGRP entrants likely will appear in the marketplace during the next two years or so, though only galcanezumab, from Eli Lilly and Co., of Indianapolis, stands to get past gatekeepers this year. Other players include Alder Biopharmaceutical Inc., of Bothell, Wash., and Teva Pharmaceutical Industries Ltd., of Petah Tikva, Israel.
Market could grow to $12B
J.P. Morgan analyst Cory Kasimov said that, "given what has happened with several recent launches, including Amgen's own [heart drug Repatha (evolocumab)], and in light of the macro backdrop, we think it's smart to go for an affordable pricing strategy to increase access."
Amgen drew fire for demanding $14,000 per year for the PCSK9 therapy.
Novartis CEO Paul Hudson said during the conference call that the Aimovig cost should remove some of the "wildcard" element regarding commercial potential for CGRPs, and Piper Jaffray analyst David Amsellem in a report praised Aimovig's tag as "comfortably below a five-figure annualized number," representing "a watershed in the context of the broader pricing debate, and perhaps may start to shift the spotlight away from the behavior of pharma companies and toward the behavior of payers (i.e., though politically it has always been easier and somewhat more expedient to demonize pharma companies, the broader controversy surrounding pricing has always been and continues to be highly nuanced)."
Last year, Dublin-based Allergan plc CEO Brent Saunders predicted during an investor conference the anti-CGRP monoclonal antibodies would cost between $12,000 and $15,000 per year, an off-the-mark guess that Piper Jaffray's Amsellem called "yet another example of Allergan senior management failing to read the tea leaves regarding how the broader pharma ecosystem is changing regarding the pricing debate (which is partly why our reaction to Allergan's agreement last year with the Saint Regis Mohawk tribe regarding Restasis [cyclosporine] was so visceral)." He said he was "not totally surprised that Amgen priced Aimovig where it did, bearing in mind that with a label encompassing both chronic and episodic migraine sufferers, Amgen and other anti-CGRP market participants that will have both patient subgroups in their labels would need to price their products more conservatively in order to be able to facilitate reasonably good access to both groups." (See BioWorld, Feb. 27, 2018.)
Covering Alder, RBC's Brian Abrahams said Aimovig's clearance "sets the stage for CGRPs to start being utilized as a new standard-of-care in migraine." Amgen's ramp-up may happen gradually but should "help prime the CGRP monoclonal antibody market, which we ultimately expect could grow to $10-12 billion overall." He called the price for Aimovig "favorable for the class and Alder. While the reimbursement paradigm may ultimately look slightly different for Alder's eptinezumab, given likely in-patient delivery, we do not believe it will limit access and would not expect Alder to need to provide a substantial discount to compete with other antibodies. Between the differentiated delivery/onset/durability profile, likelihood of patients switching among therapies, and tangible quality-of-life benefits for the class, we would not expect a price war."