Critical Drug Stocks To Watch
Get ready for some blockbuster drug launches that could get intense.
Clarivate Analytics has offered a report on experimental drugs entering the market soon that are expected to generate sales above $1 billion in 2023. Every potential blockbuster is important to the company that launches it, but there are a few in the annual Clarivate report that are more important than usual. In 2019, AbbVie (NYSE:ABBV), Alexion Pharmaceuticals(NASDAQ:ALXN), and Aimmune Therapeutics (NASDAQ:AIMT) face drug launches that they can’t afford to fumble.
1. Upadacitinib: Another rheumatoid arthritis treatment
AbbVie’s mega-blockbuster rheumatoid arthritis injection, Humira, is losing ground to biosimilar competition in Europe, and it should face the same fight in the U.S. a few years from now. That’s going to be a problem, because AbbVie relies on Humira for around 60% of total revenue.
Upadacitinib is a big reason investors aren’t too worried about Humira’s eventual demise. Annual sales of AbbVie’s still-experimental drug are expected to reach $2.2 billion in 2023.
AbbVie’s potential new rheumatoid arthritis treatment faces competition from biosimilar versions of older biologics that don’t always work. Upadacitinib breezed through clinical trials with patients who don’t respond to drugs like Humira, which is a fairly large group.
2. Skyrizi: Another psoriasis drug
Skyrizi will be the brand name for risankizumab, a potential new psoriasis injection also from AbbVie. In addition to the drug’s treatment of psoriasis, the agency will probably start reviewing more applications for the treatment of Crohn’s disease and ulcerative colitis in a couple of years.
If Skyrizi is approved in a timely fashion, sales could reach $1.74 billion in 2023. During a clinical trial with moderate to severely affected psoriasis patients, 73% of those given Skyrizi achieved a 90% improvement, compared with just 2% of the placebo group. In a head-to-head study with a similar drug called Stelara, 75% of those treated with Skyrizi achieved a 90% improvement, compared with just 42% of those given the popular standard treatment.
We should know whether Skyrizi can meet expectations by the end of the year, because it could reach pharmacies before the end of April. The FDA’s expected to announce its decision on or before April 25.
3. Ultomiris: Convenience counts
Alexion Pharmaceuticals relies on its C5 inhibitor, Soliris, for around 86% of total product sales. This rare-disease drug is getting old, and Alexion needs to transition patients to its new and improved version, Ultomiris.
The FDA approved Ultomiris to treat paroxysmal nocturnal hemoglobinuria (PNH) in December, and an expansion to treat atypical hemolytic uremic syndrome (aHUS) could happen in 2020. A far more convenient dosing schedule could drive Ultomiris sales past $1.74 billion in 2023.
To keep their immune systems from chewing up their blood cells, patients with PNH and aHUS need an intravenous infusion of Soliris every two weeks. Maintenance dosing for Ultomiris can be infused at eight-week intervals, and an injectable version could earn approval in 2020.
At around $458,000, Ultomiris is still one of the world’s most expensive therapies, but Alexion priced it around 10% less than Soliris to persuade payers to support the switch.
4. AR101: It just seems too easy
Aimmune Therapeutics is a clinical-stage biotech with a lot of expenses, but no products to sell yet. The company lost $211 million last year, and its $301 million cash cushion isn’t going to last much longer if its first drug launch, a peanut desensitization therapy called AR101, doesn’t take off like a rocket.
Aimmune’s lead candidate, AR101, could become the first and only preventative treatment approved for millions of parents worried about children with severe peanut allergies. With surprisingly solid evidence that AR101 provides a protective benefit, sales in 2023 are expected to reach $1.17 billion. That’s an awful lot for a capsule that simply contains known quantities of various natural peanut proteins, but surprising clinical trial results say this drug’s headed for blockbuster sales.
In a study with 496 patients between 4 and 17 years old, 67.2% of the group treated with AR101 were able to eat a whole peanut without any serious problems, compared with just 4% of the placebo group. Moreover, 4.3% of the placebo group experienced a severe reaction after ingesting the challenge peanut, compared with just 0.8% of those given AR101.
Most likely to succeed?
AbbVie and Alexion have all the resources necessary to launch a new drug, while Aimmune will need to build a new sales team to market AR101. Despite the extra challenges, the lack of competition for around 6 million people in the U.S. and EU with severe peanut allergies is a big advantage.
Although Aimmune could end up waiting until January 2020 to begin its first drug launch, its market cap at recent prices has fallen to just $1.33 billion. That means meeting expectations, or just getting halfway there, could propel this stock into orbit.