These 2 Companies Are Winning in the Clinic

By Cory

Source: Johnson & Johnson.

Some great news for inflammatory bowel disease patients with unmet need flew under the radar recently. This field is often overlooked but represents an enormous opportunity. According to the CDC, Crohn's disease and ulcerative colitis affects over 1 million Americans, but available therapies leave many sufferers untreated. Recently,Johnson & Johnson and Celgeneeachannounced positive results from independent programs in both indications that could bring relief to scores of untreated patients in the years ahead.

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Johnson & Johnson looks to expand StelaraFollowing its launch in 2009, Johnson & Johnson's Stelara is having a great run in treating psoriasis. When the company last reported, worldwide third-quarter sales rose to $613 million -- an increase of 19.7% (excluding negative effects of currency exchange) from the same period a year ago.

Although Stelara sales are growing in the present, a new indication for Stelara can't come fast enough.As seasoned pharma investors know all too well, success draws competition. This February, Novartis launched its first-in-class IL-17 blocker, Cosentyx, for treatment of psoriasis in the United States. Adding to the pressure are several psoriasis candidates in development from the likes of Valeant Pharmaceuticals, Merck, and Eli Lilly.

In a head-to-head trial leading to its approval, Cosentyx demonstrated superiority to Stelara. After 16 weeks of of therapy, 79% of patients on Cosentyx achieved clear to almost clear skin, compared with just 57.6% of Stelara patients.

When Novartis reported midyear results, sales of the drug had reached a modest $30 million. With a first-line indication in the EU and impressive superiority data, it's well positioned to challenge Stelara's market position.

Luckily for Johnson & Johnson, Crohn's disease patients appear to benefit from treatment with Stelara as well. At the latest meeting of the American College of Gastroenterology, investigators presented top-line results from a study comparing a single infusion of Stelara to placebo. After eight weeks, 47% of patients receiving a 130 mg dose and 58% receiving a higher, weight-determined dose achieved a clinical response. Both doses elicited responses at rates significantly higher than the 32% seen in the placebo control group. Perhaps more telling is that twice as many patients receiving the higher Stelara dose achieved a clinical remission compared with those receiving placebo.

Anti-TNFs, particularly JNJ's Remicade and Humira from AbbVie, are the go-to biologics for treatment of Crohn's. The trouble is that a large portion of patients don't respond to this class of therapy. For those who respond initially, a tendency to develop antibodies to these drugs leaves patients with the option of surgery and little else.Clinical success with patients intolerant or no longer responsive to anti-TNFs would make Stelara very popular among this large subset of Crohn's patients.

This study, Uniti-2, was with patients who hadn't yet been exposed to anti-TNFs. What's got me scratching my head is that the company hasn't touted results from the Uniti-1 trial. It involved patients refractory or intolerant to anti-TNF therapy and was supposed to reach completion more than two years ago. Stelara succeeded in a smaller phase 2 trial of similar design. As a shareholder, I can only hope results of the Uniti-1 trial were equally encouraging.

Celgene bets on a small molecule for a large indicationAt the same meeting, Celgene unveiled data from a clinical-stage compound it paid dearly for, Ozanimod, which holds treatment potential in ulcerative colitis and relapsing multiple sclerosis. As the main asset in this summer's $7.2 billion cash acquisition of Receptos, expectations are pretty high.

Source: Celgene.

TheS1P receptor modulator didn't disappoint. Results from the maintenance stage of the phase 2 Touchstone trial bolstered Ozanimod data reported earlier this year.

About a month before Celgene announced it would acquire Receptos, the company reported results from the eight-week induction phase of the Touchstone trial with ulcerative colitis patients. During this period, patients randomized into three groups received oral Ozanimod in doses of 0.5 mg and 1.0 mg, or placebo. The study reached its primary endpoint with 16.4% of patients in the 1.0 mg arm exhibiting clinical remission, versus 6.2% of patients on placebo.

The trouble is that with such a small study -- between 65 and 67 patients in each group -- the results after eight weeks barely crossed the threshold of what investigators generally consider statistically significant. A few months later the picture improved dramatically. An encouraging 21% of patients on 1.0 mg of Ozanimod achieved or maintained clinical remission 32 weeks after beginning the study, versus just 6% of those on placebo.

Like Crohn's disease, ulcerative colitis patients frequently receive injections with anti-TNF biologics. As a novel oral therapy, Ozanimod should fill the niche created by scores of patients unable to receive them.

I'll admit that after looking at the eight-week Touchstone data, I was a little leery about the Receptos acquisition. We'll need to wait until 2018 for data from the ongoing 900-patient True North study before popping any champagne corks. If it can repeat the success we've seen in the Touchstone trial, spotting opportunity in Ozanimod's early results will be another feather in Celgene's well-decorated cap.

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Cory Renauer owns shares of Johnson & Johnson. The Motley Fool owns shares of and recommends Celgene and Valeant Pharmaceuticals. 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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