Image source: Celgene Corporation.
Celgene Corp's first foray into autoimmune disease, Otezla, notched FDA approval last year as a therapy for psoriasis, and its sales have been building steadily ever since, including an impressive 688% leap forward in the third quarter that may indicate it won't be long before Otezla delivers on pre-launch blockbuster expectations.
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Transforming treatmentGlobally, 125 million people suffer from psoriasis, an inflammatory disease of the skin caused by an uncontrolled immune system response.
Historically, patients suffering from psoriasis have been treated with steroid creams that can reduce itching, disease-modifying antirheumatic drugs (DMARD) that can decrease pain, and biologics, such as AbbVie's mega multibillion-dollar per year blockbuster drug Humira.
Although creams, DMARDs, and biologics can be effective in controlling the symptoms of psoriasis, they don't work for everyone, and even when they do work, patients can suffer unwelcome side effects and, in the case of DMARDs and biologics, unsettling injection-based dosing and regular testing and monitoring.
In a bid to improve patient treatment and reduce patient burden, Celgene developed Otezla, an entirely new form of psoriasis treatment.
Unlike DMARDs and biologics, Otezla targets the release of cytokines from immune cells by inhibiting PDE4, an intracellular enzyme. Additionally, Otezla is taken orally, rather than applied via a cream or injected, and its label doesn't call for routine testing. Those advantages are likely welcome news to patients because a study published in JAMA Dermatology in 2013 (prior to Otezla's approval) found that 52% of psoriasis patients were dissatisfied with their treatment options.
Growing market shareOtezla's script volume has been growing more quickly than previously launched autoimmune drugs, including top-sellers Simponi and Stelara, both of which are manufactured by Johnson & Johnson and are approved to treat psoriasis symptoms.
Source: Celgene Corporation.
Simponi is a once-monthly anti-TNF injection therapy that treats rheumatoid arthritis and psoriatic arthritis and has been on the market since 2009. Stelara is a monoclonal antibody that blocks the activity of two proteins that contribute to the overproduction of skin cells and inflammation; it won approval for use in psoriasis patients back in 2009.
Since Simponi and Stelara have been on the market for years, they may offer insight into how big the market opportunity may ultimately be for Otezla, especially in light of Otezla's faster script growth.
Last quarter, Johnson & Johnson reported that sales of Simponi grew 26.7% year over year to $380 million, giving it an annualized sales run rate of $1.5 billion. Meanwhile, Stelara sales grew 12.9% year over year to $613 million, giving it an annualized sales run rate of over $2.4 billion.
Based on Celgene's third-quarter Otezla sales and the company's recent launches of Otezla overseas, I don't think it's a stretch to believe that Otezla could one day be generating revenue at a similar pace.
In the third quarter, Otezla brought in $139 million in sales, and that was up 688% year over year and up 54% from the second quarter. That growth came primarily from rising script volume in the U.S., but new launches in Europe, including in Germany, are starting to kick in, too. International sales of Otezla totaled $10 million in the quarter.
Source: Celgene Corporation.
Looking aheadCelgene offered up long-term guidance to investors in January that includes projections for Otezla annual sales of between $1.5 billion and $2 billion in 2017. To deliver on that forecast, Celgene will need to continue growing market share in the U.S. while also successfully commercializing Otezla in other markets, such as Japan, where the company plans to file for Otezla's approval early next year.
Celgene could also see Otezla's sales benefit from growth tied to ongoing trials designed to expand its label and improve its standing with doctors. However, given that Otezla's script volume is already climbing sharply, I don't think Otezla needs those trials to succeed to become a billion-dollar blockbuster soon.
The article Is Celgene's Otezla Coming of Age? originally appeared on Fool.com.
Todd Campbell owns shares of Celgene. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool owns shares of and recommends Celgene. The Motley Fool recommends Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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