Novartis AG and Amgen Inc. Take Aim at Johnson & Johnson

Source: Novartis

Novartis AG and Amgen have both recently reported data from late stage drug trials showing that each of their promising psoriasis drugs bested Johnson & Johnson's top-selling Stelara. The positive results set the stage for potential FDA approvals that could mean a battle over market share next year.

First out of the gatePsoriasis is a big money indication affecting as many as 125 million people worldwide. In the U.S. alone, as many as 7.5 million people suffer from the condition. As a result, drugs like Stelara post sales of about $2 billion annually. Additionally, billions of dollars more are spent treating psoriasis with other autoimmune drugs every year, including the planet's top selling drug last year, AbbVie'sHumira.

Since the patient population and resulting revenue from the indication is so big, developing new therapies to treat psoriasis has been a major focus of drugmakers like Novartis.

Thanks to positive phase 3 trial results versus Amgen's Enbrel, a leading psoriasis treatment with $1 billion in quarterly sales, Novartis' Cosentyx has already been sent to the FDA for approval. Last month, the FDA's advisory committee gave Cosentyx a universal nod for approval, clearing the way for an FDA decision in January.

Since the FDA usually sides with the advisory committee recommendation, there's a good chance that Cosentyx will get the FDA's official go-ahead. If so, Novartis' recent report that Cosentyx achieved statistically better results than Stelara in clearing at least 90% of symptoms from psoriasis patients provides another powerful marketing message for Novartis' sales team to deliver to doctors.

Fast on its heelsEager to shore up its Enbrel psoriasis market share, Amgen has teamed up with AstraZeneca on brodalumab. During phase 3 trials, brodalumab reduced symptoms by 75% in 85% of patients. Those results outperformed J&J's Stelara, which reduced symptoms by a similar amount in about 69% of patients.

Those results are solid, but more compelling may be the fact that brodalumab achieved total clearance of symptoms in 44.4% of patients taking a 210 mg dose, compared to 21.7% of patients achieving total clearance while taking Stelara.

Now that Amgen has all the data on hand from its brodalumab late stage trials, Amgen will begin discussions with regulators over filing the drug for approval. If those discussions go well, then Amgen could submit the drug to the FDA next year, clearing the way for an FDA decision late next year or early in 2016.

Major shake upCelgenewon approval of its autoimmune drug for use in psoriasis patients in September, so existing therapies like J&J's Stelara are already facing competitive threats. However, those threats will increase if the FDA approves Novartis' Cosentyx in January. If regulators eventually approve brodalumab, then there's likely to be significant market share shifts among all the various psoriasis treatments by the end of 2016. Regardless, since Novartis' drug could hit the market in the first quarter, investors that would like exposure to autoimmune drugs may want to focus their attention on its shares, rather than Amgen's.

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Todd Campbellis long Celgene.Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not have positions in the companies mentioned. Todd owns Gundalow Advisors, LLC. Gundalow's clients do not have positions in the companies mentioned.The Motley Fool recommends Celgene and Johnson & Johnson. The Motley Fool owns shares of 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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