AbbVie Inc.’s (ABBV, Financial) next-generation immunology drug is closer to fulfilling its promise to help ease the pain caused by the imminent loss of patent protection for the company’s multibillion-dollar blockbuster Humira.
The Chicago-area company's drug Rinvoq is inching toward approval for what could be a $2 billion indication in ulcerative colitis. The drug, which is already approved to treat rheumatoid arthritis, tallied sales of more than $300 million in the first quarter.
Late last month, AbbVie said that Rinvoq performed much better than a placebo in patients with moderate to severe ulcerative colitis, helping them reach clinical remission after a year of treatment. The company is banking on Rinvoq and the plaque psoriasis drug Skyrizi to shore up sales after biosimilars start eating into Humira revenues when the medication loses market exclusivity. AbbVie said the duo could generate combined sales of $15 billion by 2025.
Investors need not get overly concerned about Humira’s prospects just yet. The drug still has plenty of oomph. In the first quarter, global Humira net revenue was about $4.9 billion, up 3.5%. It has held the title of the world’s top-selling drug since 2012 and if it claims the top spot again this year, it will overtake Lipitor as the world’s all-time best-selling drug. Moreover, GlobalData, a leading data and analytics company, thinks that despite losing ground to biosimilars, Humira, along with the Pfizer Inc. (PFE, Financial) and Amgen Inc.'s (AMGN, Financial) drug Enbrel, will remain the global sales leaders for the foreseeable future.
Rinvoq is a Janus kinase (JAK) inhibitor, a class of small molecule drugs that inhibit the activity and response of enzymes known as Janus kinases, and their signaling pathways. JAK inhibitors belong to a family of drugs known as disease-modifying anti-rheumatic drugs (DMARDs), which constitute the primary treatment for rheumatoid arthritis, according to RxList.
GlobalData expects JAK drugs to grow at a compound rate of more than 7% through 2029 and serve as the primary driver as the overall rheumatoid arthritis market flattens due to the introduction of lower-cost biosimilars.
If Rinvoq manages to earn the Food and Drug Administration's approval for use in ulcerative colitis, analysts have predicted it could end up dominating competitors like Pfizer’s Xeljanz and Gilead Sciences Inc.’s (GILD, Financial) filgotinib.
While AbbVie is hoping to get the OK to use Rinvoq to treat other diseases, that effort has been stymied by safety issues. The FDA recently put off its decision on the company’s request to use the medication in psoriatic arthritis and ankylosing spondylitis. The agency has also pushed back a verdict for Rinvoq in atopic dermatitis
The problem isn’t unique to Rinvoq. The FDA has delayed several decisions in the drug class as it works through safety concerns.
Year to date, the price of AbbVie shares is up about 10% to more than $116, doubling the increase in value of the iShares U.S. Pharmaceuticals ETF (IHE, Financial). The company is rated a buy, according to Yahoo Finance, with an average target price of $124 and a high of $144. Its dividend yields more than 4.5%.
