Chronic Diseases

Radicava: Not Innovative Enough to Sustain Strong Start

Conclusion: Despite the early success of Radicava, the new ALS treatment provides little clinical innovation. After the buzz surrounding the first new drug for ALS treatment in 22 years passes, we expect patient share to decline. Radicava’s modest efficacy barely improves patient outcomes; our rare diseases model shows that it’s priced too high relative to its clinical benefit.

Strong Start

According to Mitsubishi Tanabe Pharma America, more than 3,500 ALS patients in the US have been treated with Radicava (edaravone), representing around 20% of ALS patients in the US. This patient share is likely driven by excitement from advocacy groups: following Radicava’s approval, ALS Association president and CEO Barbara Newhouse shared her organization’s hope that the approval “signals the beginning of a new chapter” in ALS treatment. Calaneet Balas, an executive VP for the organization, stated there was “a great amount of excitement” surrounding the drug’s approval and that she thinks the new agent “has brought true hope to [the ALS] community.” Disease burden in ALS in extremely high, and the heavy press coverage surrounding the approval propelled a strong first-year of sales: Radicava tallied $110 million in sales in the US alone in the drug’s first full year.

 

Skepticism

Despite the strong start, we don’t believe Radicava’s growth in the ALS market will be sustained. Radicava is an expensive addition (WAC=$137,400/yr) to riluzole and offers only small efficacy improvements compared to riluzole alone. That modest slowing of disease progression is offset by the inconvenience of near-daily IV infusions in two-week intervals and an absence of data on damage reversal and survival benefits. For Radicava’s price to match the clinical benefit vs. cost of other drugs in rare diseases, its WAC price should be about $55,000/yr.

In addition, although Radicava was approved for all ALS patients, it has only shown results in a small subset of patients who were recently diagnosed (within 2 years) and whose symptoms have rapidly progressed. It is estimated that only 7% of ALS patients meet these criteria, and the authors of the pivotal study state, “There is no indication that edaravone might be effective in a wider population of patients with ALS who do not meet the criteria.”

This limitation has not been lost on payers, with companies such as United Healthcare and Tufts Healthcare requiring patients to meet the trial inclusion criteria in order for their treatment costs to be covered. Lastly, while Radicava boasted strong initial sales figures, we don’t yet have data on rates of treatment discontinuation, which could be high given the modest efficacy, high cost, and inconvenience.

Many doctors share our skepticism. In Discussing edaravone with the ALS patient: an ethical framework from a U.S. perspective, Yeo & Simmons argue that physicians should see past the excitement from advocacy groups. In line with our analysis, these authors urge physicians to take the time to understand the costs and impact of administration demands on patients’ quality of life, and weigh them against the modest efficacy seen in trials.

Our prediction has already started to come true. Mitsubishi Tanabe expects Radicava sales to decline in 2019. In line with our analysis, Mitsubishi expects the inconvenience of frequent infusions to be a deterrent for patients, and the company is already trialing an oral suspension formulation of Radicava that would help justify its current price.

Hemlibra: A Strong Leader in Hemophilia A

Conclusion: The clear leader for hemophilia A patients with factor VIII (FVIII) inhibitors, Hemlibra (emicizumab, Roche) also brings competitive heft to the larger, more crowded, space of hemophilia A without inhibitors. Combining improved efficacy and convenience, Hemlibra offers significant clinical innovation over the current standard of care (SOC), Advate (Shire).

First approved in November 2017, Hemlibra is well positioned within the hemophilia A market. For patients with inhibitors, it wins in a landslide when compared to bypassing agents such as recombinant activated factor VII (NovoSeven®, Novo Nordisk). Among this small group, Hemlibra substantially reduces cost and administration frequency in addition to improving efficacy.

But how does Hemlibra look in the much larger (and more brand-loyal) population of patients without inhibitors, an indication Hemlibra won in October 2018?

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Compared to Advate, the current SOC among patients without inhibitors, Hemlibra shows meaningful improvements in efficacy, tolerability, and convenience, leading to an 8.7% reduction in unmet medical need, as seen in the waterfall chart. While Advate requires at least three IV bolus administrations a week, Hemlibra can be given as a weekly subcutaneous injection with better outcomes in annualized bleeding rate and in the proportion of patients experiencing zero bleeds per year. 

So far, Hemlibra sales have backed analysts’ high expectations. Hemlibra brought in $224 million in 2018 revenue and looks to claim an even larger market share in hemophilia A patients, both with and without FVIII inhibitors, moving forward.

Our analysis combined clinical trial data from both Hemlibra and Advate prescribing information labels as well as the HAVEN 3 study.



Oral semaglutide: A game changer in type 2 diabetes

Conclusion: Oral semaglutide’s clinical improvement over Januvia (sitagliptin, Merck) is 17 percent – a historically high level of innovation. In type 2 diabetes, nearly every new entrant over the last 20 years has offered an improvement in the low single digits or less. 

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At this writing, oral semaglutide (from Novo Nordisk) is expected to win approval by the end of 2019. Our analysis compares it to Januvia (with metformin in the background).  The waterfall chart shows that oral semaglutide reduces unmet medical need in type2 diabetes by over 17 percent, compared to Januvia. 

Efficacy drives oral semaglutide’s improvement, reflecting superior glycemic control and reduction in CV events. The efficacy advantages ripple through to mortality and morbidity, conferring still more clinical benefit.  Oral semaglutide has a modest disadvantage in safety/tolerability and slightly higher cost relative to Januvia (we assume the oral form will cost the same annually as the subcutaneous Ozempic).  The net benefit is impressive and will be diminished only marginally when generic sitagliptin reaches market.

The clinical data used in this analysis for Januvia comes from its package insert, and for oral semaglutide, most of the information comes from its phase 3 clinical trials: PIONEER 1, PIONEER 2 and PIONEER 3

Tymlos: A new force in the osteoporosis market

Conclusion: In postmenopausal osteoporosis patients at high risk of fracture, Tymlos offers improved efficacy at a much lower price than Forteo. We expect Tymlos to slowly but significantly cut into Forteo’s share.

Tymlos to Overtake Forteo in PTH-treated Market Segment

Direct competitors, Tymlos (abaloparatide, Radius) and Forteo (teriparatide, Lilly) are both anabolic agents, delivered subcutaneously, and indicated for postmenopausal women at high risk of fracture.* In a study comparing both agents to placebo (ACTIVE trial), Tymlos outperformed Forteo on almost every endpoint, including percent reduction in patients with vertebral and non-vertebral fractures and increased bone mineral density at various bone sites. At less than half the price of Forteo (WAC = $17,000 versus $40,000 /yr), Tymlos is well-positioned to cut deeply into Forteo’s market share. Since osteoporosis patients are unlikely to switch medications, we expect Tymlos will rely on capturing newly diagnosed patients. So far, Tymlos has been successful in this approach: Radius claims that Tymlos captured 40% of new anabolic patient starts in December 2018. The impact Tymlos will have on Forteo’s market share is already emerging. After years of constant growth, Forteo’s revenue decreased steadily throughout 2018.

Evolution of the Osteoporosis Market

The osteoporosis market continues to become stratified into lines of therapy. Payers will likely require all newly diagnosed patients (except those with very high fracture risk) to try a generic bisphosphonate first. Next, a patient will likely be directed towards Prolia (denosumab, Amgen) due to its moderate efficacy, better convenience, and lower cost compared with the anabolic agents (Prolia costs $2,400 per year and is administered subcutaneously every 6 months). Patients failing Prolia would then try Tymlos or Forteo.

 

On the Horizon

Amgen and UCB’s drug Evenity (romosozumab) will soon win approval and will directly compete with Tymlos and Forteo in the high-risk population. Evenity looks inferior to Tymlos in our model because its advantages in side effects and convenience don’t make up for its poorer efficacy. However, with its efficacy on par with Forteo and with better convenience, Evenity should further erode Forteo’s patient share and challenge Tymlos if priced similarly.

*Advanced age, frailty, glucocorticoid use, very low T scores, and increased fall risk are indicators of higher fracture risk in osteoporosis patients.

Xeljanz: Is ulcerative colitis finally the place for JAKs to shine?

When the first JAK (janus kinase) inhibitor, Xeljanz (tofacitinib, Pfizer), was approved for rheumatoid arthritis (RA) in 2012, many thought it would quickly eat up a large piece of the market.  Sales since then, however, have been disappointing.  Some believe this has to do with its initial failure to get approved in Europe, while others believe that there were lingering safety issues that were not recognized in the label. Regardless, sales have continued to climb.

Six months ago, Xeljanz hit the ulcerative colitis (UC) scene –the first JAK to do so. Compared to the current standard of care, Entyvio (vedolizumab, Takeda), Xeljanz shows significant improvement in ­­­both efficacy and convenience, demonstrating that having an oral route of administration could be a game-changer in the world of ulcerative colitis.

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Now that Xeljanz has an EMA approval in RA (as of March 2017) and more long-term safety data has been released, we expect it to quickly eat up a corner of the UC market. With four other JAKs in late development, this class could pose a serious threat to anyone else hoping to compete in ulcerative colitis. 

Gilenya, Aubagio, and Tecfidera in Multiple Sclerosis

Conclusion: Three new oral drugs launched in recent years to treat multiple sclerosis, Gilenya, Aubagio, and Tecfidera, each offer clinical advantages over the beta interferons; Tecfidera has the greatest advantage, followed by Gilenya, and Aubagio has the smallest clinical advantage.  Commercial performance has closely tracked these differences in Clinical Innovation.

Several new drugs have entered the multiple sclerosis market over the past few years. Gilenya (fingolimod) has strong Clinical Innovation at 9.3%, when compared with Rebif (interferon beta-1a). The “Drivers of Improvement” graphic below summarizes the results of that analysis:

  • Rebif is modeled as the standard of care (SOC), and it has a total unmet need score of 2.76, as represented by the yellow bar on the left side of the graphic

  • Gilenya’s unmet need score is 2.50, the yellow bar on the right side of the graphic

  • Gilenya’s Clinical Innovation, or percent reduction in medical need, is 9.3%: Patients treated with Gilenya have substantially less medical need than patients treated with interferon

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The graphic also illustrates Gilenya’s advantages and disadvantages compared with the SOC:

  • A moderate efficacy advantage (reduction in relapse rates), leading to additional benefits in morbidity

  • A modest advantage in safety/side effects

  • A substantial advantage in dosing (oral vs. subcutaneous administration)

Gilenya’s overall Clinical Innovation score of 9.3% is at the top of our “good” range – it was launched in Q4 of 2010, and by the end of 2012 it had achieved annual revenues of nearly $1.2 billion.

When Aubagio (teriflunomide) launched in late 2012, it offered 5% Clinical Innovation relative to Rebif, but it was 5% inferior to the already marketed Gilenya . Aubagio’s sales have lagged.

In March of 2013 Tecfidera (dimethyl fumarate) also received FDA approval in multiple sclerosis. It offers substantialClinical Innovation, of 6.3% above Gilenya (15% over Rebif).

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The sources of improvement for Tecfidera over  Gilenya are:

  • A small efficacy improvement

  • Improved tolerability, and

  • The improvements in efficacy offer reductions in disease burden

Tecfidera is better than Gilenya, and much better than Rebif. In the fiscal quarter ending June 30, 2013, the Biogen Idec reported sales of $192 million – impressive results for a drug in its first full quarter on the market.

Jardiance: New outcomes data in type 2 diabetes

Conclusion: Jardiance (empagliflozin) gets a Clinical Innovation score of 5.2% in type 2 diabetes patients with comorbid cardiovascular disease (CVD), based on data from the EMPA‑REG OUTCOME trial reported in September 2015. A 5.2% Clinical Innovation score suggests a “Good” ability to compete for patient share — far better than any other new oral agent launched in type 2 diabetes in many years.

To gain insight into the clinical and commercial meaning of new trial data reported for Jardiance in type 2 patients, we analyzed it in our unmet medical need model, which provides a quantitative measure of clinical improvement over the standard of care (SOC). These new data represent a notable improvement in the Clinical Innovation score for Jardiance in the tested population (those with CVD, who constitute 37% of all type 2 diabetics).

The most significant finding from the study is the relative reduction in all-cause mortality — 32% lower than in the control group (SOC plus placebo). That mortality benefit is the primary driver of Jardiance’s overall Clinical Innovation score, as reflected in our “Drivers of Improvement” chart (below). Unmet medical need in diabetics with CVD is relatively high; on our 0–5 scoring system it comes in at 3.16 for the standard of care (sitagliptan plus metformin). Adding Jardiance to this combination (and many other current combination regimens) reduces medical need by a notable 5.2%, to 2.99 (right side of the chart). Green bars show Jardiance’s advantages, red bars its disadvantages.

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The efficacy improvement shown in the “Drivers” graphic above reflects the 14% reduction in cardiovascular events that were seen in the Jardiance-treated patients. The disadvantages of the Jardiance combination regimen — the additional side effects, dosing of an additional pill, and higher drug costs — are small in relation to its advantages in mortality, efficacy, and morbidity.

There have been many new drugs launched for type 2 diabetes in recent years, and despite the proliferation of novel mechanisms, all of them have low Clinical Innovation (close to 0%) and are therefore “undifferentiated”. Jardiance (in the CVDsubpopulation) is the first to show Clinical Innovation above the 5% level.

We also analyzed Jardiance in the broader type 2 population, assumingrelative reductions in mortality and hospitalizations as reflected in the study’s population. Those assumptions yield a Clinical Innovation score of 2% for Jardiance in the broader population.

Using our share prediction algorithm, we project that Jardiance will reach peak U.S. sales of $2.6 billion at its current price and an additional $1.5 to $2 billion outside the U.S. Most of those sales will come from the comorbid CVD population.

Brintellix: Another "me too" in major depression

Conclusion: Brintellix has “negative Clinical Innovation” relative to generic escitalopram, suggesting that Brintellix will struggle in major depressive disorders, and that sales are unlikely to reach the level predicted by the developers.

In September 2013 the FDA approved Brintellix (vortioxetine), a new antidepressant from Lundbeck and Takeda. Marketing authorization from the European Medicines Agency was granted in December 2013. The “Drivers of Improvement” waterfall graphic below summarizes the results of our analysis of Brintellix compared to generic escitalopram (the current standard of care):

  • Generic escitalopram’s total unmet medical need score in MDD is 2.01, shown in the yellow bar on the left side of the graphic

  • Brintellix’s unmet need score is 2.05

  • Brintellix’s Clinical Innovation, or percent reduction in medical need, is negative 2.1%, meaning it is at a net competitive disadvantage relative to generic escitalopram

The graphic shows the magnitude of the advantages and disadvantages of Brintellix compared to the escitalopram:

  • The combination of advantages in efficacy and safety/tolerability are modest (summing to 1.6%)

  • Those small advantages are overwhelmed by the negative impact of a much higher branded price for Brintellix compared to generic escitalopram, which gives Brintellix a 3.8% disadvantage in direct cost.

For some patients, the clinical differences may be significant, but we think payers will enforce restricted access to Brintellix, owing to its high price and relatively modest clinical benefits.

Fierce Biotech reported on January 6, 2014, that Lundbeck and Takeda estimate peak-year revenue for Brintellix of $2 billion, and Deutsche Bank has estimated peak sales at $1.85 billion. We at Equinox Group think these estimates are too high. By our established metrics, Brintellix is not clinically innovative – we think it will be perceived as a “me-too” product. The Equinox Share Predictor (which reflects the historical relationship between the Clinical Innovation offered by new drugs and the patient shares they achieve) estimates a patient share that would translate into peak revenue of about $1 billion.

The range of uncertainty in predicting patient shares is wide when Clinical Innovation is close to zero as in this instance. Factors such as promotional spend have a greater effect when there is little clinical differentiation. But in 2007 Pristiq launched in MDD with a 0%Clinical Innovations core against branded escitalopram, and it achieved peak year sales of about $650 million, providing further support for the view that Brintellix is unlikely to achieve $2 billion in peak-year sales.

Pradaxa: Stroke prevention in atrial fibrillation

Our analysis shows Pradaxa (dabigatran) to have high Clinical Innovation over warfarin as the previous SOC for preventing stroke in patients with atrial fibrillation (AF). The “Drivers of Improvement” graphic below summarizes the results of our analysis:

  • Warfarin’s total unmet need score in AF is 1.23, the yellow bar on the left side of the graphic

  • Dabigatran’s unmet need score is 1.04, the yellow bar on the right side of the graphic

  • Dabigatran’s Clinical Innovation, or percent reduction in medical need, is 15.9%: Patients treated with dabigatran have substantially lower unmet need than patients treated with warfarin

This graphic also illustrates dabigatran’s advantages and disadvantages compared with the SOC:

  • An overwhelming efficacy advantage (fewer patients experiencing stroke/systemic embolism)

  • A small advantage in safety/side effects (less monitoring required and fewer drug-drug interactions)

  • A slight disadvantage in dosing (BID vs. QD)

Dabigatran’s higher cost diminishes its innovation score, but its net Clinical Innovation of nearly 16% is still high compared with historical norms. As our model predicts, dabigatran has performed well in the AF market since its launch in late 2010.

Following dabigatran’s launch, several other competitors entered the AF market. Rivaroxiban (Xarelto) was approved for this indication about a year after dabigatran, with similar Clinical Innovation relative to warfarin (with somewhat different strengths and weaknesses to those of dabigatran). Rivaroxiban has also competed effectively in this population. In early 2013, apixaban (Eliquis) was also approved, and again it has a similar level of Clinical Innovation compared with warfarin.

All three of these drugs offer substantial improvement over warfarin, and we expect that they will, collectively, dominate this market. However, we do not expect apixaban to achieve as high a patient share, due to its later market entry. For instance, if dabigatran is considered as the new SOC, then apixaban has minimal Clinical Innovation.

Stelara: Exceeding expectations in psoriasis

Conclusion: The magnitude of Stelara’s advantages (especially in safety/tolerability) explain why it vastly exceeded Wall Street’s sales expectations.

When Stelara (ustekinumab) was launched in 2009 for psoriasis, Wall Street analysts forecasted 2013 revenues of $500 million. However, by 2012, sales of the drug exceeded $1 billion. Our Clinical Innovation analysis shows ustekinumab to have a significant safety/tolerability advantage over TNF-alpha inhibitors such as Humira (adalimumab), which was considered to be the standard of care (SOC) for moderate-to-severe psoriasis when ustekinumab was launched.

The “Drivers of Improvement” graphic below illustrates the comparison:

Adalimumab has an unmet need score in moderate-to-severe psoriasis of 1.73, represented by the yellow bar on the left side of the graphic

  • Ustekinumab’s unmet need score in this population is 1.61, the yellow bar on the right side

  • Ustekinumab’s Clinical Innovation, or percent reduction in medical need, is 6.6%: Patients treated with ustekinumab have lower unmet need than patients treated with adalimumab

Historically, drugs with 5% or greater Clinical Innovation typically achieve strong patient share.

This graphic also illustrates ustekinumab’s advantages and disadvantages compared with the SOC:

  • The two drugs have comparable efficacy, with ustekinumab showing a slight advantage over adalimumab

  • Based on currently available data, ustekinumab has an improved safety/tolerability profile over adalimumab, with no black box warning and lower rates of infection

  • Ustekinumab is administered as an SC injection once every three months, compared to adalimumab’s twice weekly injections; however, the requirement that ustekinumab be administered in the outpatient setting offsets its frequency advantage

  • Ustekinumab’s annual drug cost is slightly higher than adalimumab’s

Our analysis shows that ustekinumab offers significant Clinical Innovation over adalimumab, and its commercial performance to date supports this conclusion.

Outlook for IL-17 receptor antagonists

A new class of drugs may soon enter the competitive landscape in moderate-to-severe psoriasis. Amgen, Eli Lilly, and Novartis all have IL-17 receptor antagonists in phaseIIItrials for this indication. Amgen’s product brodalumab has shown the strongest phase II data among the three. Based on these data and assuming price equivalence with ustekinumab, our analysis shows brodalumab to offer a strong 7.3% Clinical Innovation.

While brodalumab and ustekinumab show a similar percentage of patients responding (90% and 91%, respectively achieving at least a 50% PASI improvement at 12 weeks), almost twice as may brodalumab patients as ustekinumab patients (74% vs. 38%) reach at least 90% PASI improvement. Also, significantly more brodalumab patients have a physician’s global assessment (PGA) of disease as “cleared” or “minimal” (83% vs. 65%). Absent long-term data, we conservatively assume that the percentage of patients maintaining cleared or minimal PGA response at two years will be the same as that seen with ustekinumab.

Our analysis shows brodalumab to have a slight safety/tolerability disadvantage compared with ustekinumab; we assume it will have a black box warning due to a rate of severe bacterial infections comparable to adalimumab’s.

Brodalumab dosing is by SC injection every other week, which our framework considers slightly less convenient than an outpatient injection once every three months.

In our view, the Clinical Innovation of brodalumab over ustekinumab is similar to that shown by ustekinumab over adalimumab. If phase III trials of brodalumab replicate the efficacy and safety/tolerability data seen in phase II, we predict that brodalumab will achieve substantial patient share in the moderate-to-severe psoriasis market.