Yet another drug, this one being Raptiva (efalizumab) from Genentech Inc., entered the psoriasis market last week, further testing the notion that any company itching for a piece of the action might find a place, if its drug is worthy enough to gain approval.
News of Raptiva's marketing clearance by the FDA came just before Biogen Inc. - whose psoriasis treatment, Amevive (alefacept), was approved earlier in the year - offered an earnings report that showed the drug's takeoff has been slow.
Raptiva and Amevive compete in a market that includes two time-tested anti-tumor necrosis factor therapies: Amgen Inc.'s heavy hitter Enbrel (etanercept), approved for rheumatoid arthritis and psoriatic arthritis but used off-label for psoriasis, and Johnson & Johnson's Remicade (infliximab), approved for Crohn's disease and RA.
Raptiva functions differently from the anti-TNFs. It's a humanized monoclonal antibody and targeted T-cell modulator, designed to inhibit the inflammatory cascade, and works by blocking the binding of LFA-1 to ICAM-1, thus inhibiting T cells from binding to key cells in the psoriasis reaction, rather than depleting T cells themselves. Amevive offers another option, blocking activation of T cells by interfering in the LFA3/CD2 pathway.
About the market for psoriasis treatments, two main schools of thought prevail. The more common idea is that added biologics for psoriasis will boost awareness of treatment possibilities, and doctors will use whatever provides relief for particular patients - for as long as the treatment keeps the odious symptoms of the condition at bay.
The second - a rather conventional and Darwinian view - holds that, over time, one drug will emerge as the clear market winner, telling the others to go scratch.
This spring, the first philosophy gained even more credence through a survey by SG Cowen, which polled 312 dermatologists treating more than 77,000 psoriasis patients. (See BioWorld Financial Watch, April 28, 2003.)
Results indicated Enbrel, though well known and going strong, probably won't capture more than 45 percent of the market in 2004 and 41 percent in 2005. Favored for next in line was Amevive, so strongly that the drug could capture at least 30 percent.
But in its most recent earnings report, Biogen said Amevive had sold only $12 million, a number below many analysts' projections, including Cowen's of $16 million.
MEDACorp, a division of Leerink Swann & Co., found in its ongoing survey of physicians that, as of the end of September, 36 polled had treated 597 patients with biologics. Amevive starts dipped by 9 percent month over month, and discontinuations jumped by 342 percent as treatment cycles completed. Enbrel starts, on the other hand, rose 31 percent month over month and "anticipated usage of Raptiva appears modest upon launch," said Leerink's report.
Analyst: Enbrel, Humira Likely To Lead The Pack
"The physicians we speak with are uniformly much more enthusiastic about Enbrel, because the efficacy data is so much better than Amevive or Raptiva," Leerink analyst William Tanner told BioWorld Financial Watch. In July, Amgen filed for an Enbrel label expansion to psoriasis.
"The best drug from an efficacy standpoint is Remicade [infliximab, another anti-TNF]," Tanner added. "They talk about it as being a nuclear weapon. I don't think [physicians will] actually use that," because of what they regard as an increased risk of infection. Remicade is approved in the U.S. for RA and Crohn's disease.
"Where people are missing the boat is thinking the market for these biologics for psoriasis is really large," Tanner said. "That's not the case."
At some point, Tanner said, the reimbursement argument and others for Amevive will "ring a bit hollow. Enbrel is doing better and it doesn't even have a label."
Biogen, as it prepares to complete its merger with IDEC Pharmaceuticals Inc. in mid-November, is staying the course with regard to its estimates, even if not all of the firm's observers are.
"While management did not rescind its 2003 guidance for $50 million to $70 million in Amevive sales, with $23 million in sales through the first three quarters, that guidance would seem to be a stretch," wrote Cowen analyst Eric Schmidt in a research report. "Our new 2003 estimate of $43 million is below the low end of the range," he added.
While Cowen sees "strong physician interest" in Amevive, and forecast the drug's "differentiated clinical profile and Medicare reimbursement will allow it to be a solid player in a large market," reimbursement problems must let up before the drug's potential is realized.
Said Tanner: "It's going to do less than half of what [Biogen] originally estimated," which was $85 million.
If Biogen can get a piece of it, though, the pie is plenty big and holds abundant promise, Cowen said in the report on its physician poll. Biologics for psoriasis could "provide investors with a hotbed of opportunity, similar to the field of HIV/AIDS in the mid-1990s and [RA] in the late 1990s," according to the report, with biologics' use for the condition predicted to rise 12 percent this year, 23 percent in 2004 and 31 percent in 2005.
Winton Gibbons, analyst with William Blair & Co., told BioWorld Financial Watch there are "all sorts of reasons why physicians may not be accepting Amevive, but it's going to be helpful on the margin." Raptiva's approval will "stimulate the primary, underlying demand in the market for biologics approaches to psoriasis," he said.
As James Mullen, Biogen's chairman and CEO, put it during the conference call, "There's still a significant group [of would-be Amevive buyers] that has issues." Recent months have "been about getting the operating model working. We've made a lot of progress on all fronts, but we're certainly not done," he said.
Tanner went to the bottom line.
"Will there be a market for Raptiva and Amevive? I guess," he said. "Biogen is sort of doing the experiment by showing that Amevive is either a crappy drug or the market isn't that big. You've got to imagine it's going to be Enbrel and at some point in time Humira [in the lead]."
Humira (adalimumab), from Abbott Laboratories Inc., is another TNF blocker, approved for RA and likely to get a psoriasis label in 2005 or 2006, Tanner said.
Meanwhile, Gibbons said, it's "possible that in the first quarter [of 2004] there will be more of a conflict between" Raptiva and Amevive, but he said that conflict is unlikely to persist, and pointed to a "turnaround" in sales of Avonex - already a blockbusting flagship product for Biogen, selling $298 million worldwide in the latest quarter.
U.S. sales of Avonex dropped from May 2002 to May 2003 on a rolling, three-month basis, he said, but flattened out six weeks ago and have been on the rise for the past month and half, possibly thanks to a new pre-filled syringe for the drug, introduced in August.
"Avonex is back on track," Gibbons said.