- Amgen faces upcoming biosimilar competition for Neulasta, but also expects its own portfolio of biosimilars to continue to develop. This includes Amgen's Humira biosimilar, which will launch soon in the EU.
Initial Aimovig Datapoints Suggest a Strong Launch
Aimovig is the first of a new class of drugs that block the calcitonin gene-related peptide, also known as anti-CGRPs. Amgen believes there is a potential US market of 10 million patients for Aimovig for use in preventing migraines. The drug received approval several months ago, and launched shortly thereafter.
While investors see the drug as a promising asset, there have been some concerns. The drug competes against a crowded field of other upcoming anti-CGRPs (Eli Lilly's galcanezumab and Teva's fremanezumab), oral anti-CGRPs, and Botox. Additionally, some investors worry that the anti-CGRP class will be limited to just chronic migraine or patients that have failed Botox treatment.
Initial datapoints from the launch have allayed some of these concerns. Data from IMS suggests that new patient starts have trended strongly, with over 2,000 patient starts by week 4 and over 3,000 patient starts by week 10. In August, data suggests that over 20,000 individuals are now on Aimovig and over 11,000 are starting on the drug.
Anecdotally, surveys of prescribers show that the drug is being used by a large group of migraine patients as well. The commentary suggests that patients on Aimovig include both episodic and chronic migraine patients, as well as those who are on another suboptimal preventive drug.
There are several caveats to temper enthusiasm. First, the initial demand consists largely of pent-up demand, but will likely settle to a more normal go-forward rate in the next month or two. Second, much of the volume has gone to free product trials so far. Third, Teva and Eli Lilly expect to see FDA decisions soon on their anti-CGRPs, which could soon make the market much more competitive. Teva has an upcoming FDA decision on fremanezumab by September 16th, while Eli Lilly expects a decision on galcanezumab some time in 2H18.
However, taken as a whole, the data so far bodes well for Aimovig as well as for the anti-CGRP class. This has likely been a major driving force behind the stock's recent outperformance. Since June, consensus estimates for the drug have moved from roughly $750 million to $1 billion in revenue by 2022.
Amgen Faces Biosimilar Competition for Neulasta, but Can Manage the Threat
Biosimilars are a double-edged sword for Amgen. Amgen's Neulasta faces an upcoming biosimilar threat, but the company also stands to benefit from biosimilar uptake with their own biosimilar portfolio.
Threat. Let's zoom in first on the threat. Amgen faces biosimilar competition in its Neulasta branded drug, which generated roughly $4 billion in US sales in 2017. Neulasta boosts white blood cells to help reduce infection rates from strong chemotherapy.
As I wrote several months ago, Neulasta faces competition from numerous other biosimilar manufacturers. Mylan is the most immediate threat as they received approval for their biosimilar, Fulphila, several months ago. Coherus is the next threat as they have an FDA action date on November 3rd, and are widely expected to receive approval. If approved, some investors are concerned that Coherus may act aggressively to take share and put further pricing pressure on Amgen.
Beyond Mylan and Coherus, there are a host of other competitors that are a bit further out. These competitors include Apotex and Sandoz, both of which received previous CRLs. Apotex has been quiet about entry, but did receive approval in Canada in April 2018. We could see entry in late 2018 or early 2019. Sandoz has stated they will likely resubmit in 1H19 and could see entry next year if all goes well. Overall, it is clear to investors that competition for Neulasta is coming.
However, Amgen has some ways to manage the threat. The primary way in which the company is expected to protect revenue is through Onpro, its on-body injector that saves patients a trip to a cancer or oncology center for a shot. As many as 65% of Neulasta patients have switched to Onpro, and these patients are considered to be stickier and less likely to switch to Fulphila.
Additionally, as I have detailed in a prior deep dive on biosimilars, the current environment for biosimilars in the US is not a friendly one. There is a prevalent stigma among the medical community that biosimilars are not as efficacious or safe as the branded product. Branded manufacturers also can engage in complex contracting practices that make it extremely difficult for biosimilars to gain traction among PBMs or insurers. These two forces can create a vicious cycle in which limited uptake reinforces the stigma and further limits uptake.
Consensus estimates for Neulasta currently point to a 7% decline in US sales in 2018, and roughly 15% annual declines for the next several years thereafter. Note that EU will also face biosimilar competition, but sales here are much smaller ($600M in 2017) and are therefore not as closely watched by investors.
Benefit. Amgen also stands to benefit from ongoing biosimilar adoption with its own biosimilar portfolio. The portfolio consists of ten biosimilars, six of which are in the late stages of development. Many of these drugs are not baked into consensus estimates, and therefore the portfolio could add several billion to estimates if it continues to execute as planned.
Of particular interest within this portfolio is Amgen's Amgevita, a biosimilar to Abbvie's Humira. I wrote about the biosimilar threat to Humira, which is protected in the US until 2023, but will face significant competition in the EU starting in 4Q18. AbbVie has guided to a 18-20% decline for 2019, which implies over a billion in revenue up for grabs (and more beyond 2019). And the opportunity could potentially be even larger than this, as AbbVie management noted that they will re-evaluate guidance based on 4Q18 performance.
While the exact launch dates for each market will vary, Amgevita is expected to initially launch in some EU regions in October. Amgevita received approval for a full label from the EMA, and adoption is expected to be more rapid than in the US given the EU's more biosimilar-friendly environment. Note that Amgen will also face other Humira biosimilar competition in the EU from Samsung and Mylan. Investors will be watching performance closely.
Kyprolis Continues to Develop
On August 28th, Amgen filed for an sNDA to expand Kyprolis's label to include a once-weekly dosing option with dexamethasone for patients with relapsed or refractory multiple myeloma.
Kyprolis is a proteasome inhibitor for use in combination with Revlimid and dexamethasone for patients with relapsed multiple myeloma. The drug received initial FDA approval in 2012 and has captured an estimated 10% of the market. The sNDA used data from the phase 3 ARROW trial, which looked at once-weekly Kyprolis at 70mg/m2 with dexamethasone vs. twice-weekly Kyprolis at 27mg/m2 and dexamethasone.
Results showed that the once-weekly option achieved superior progression-free survival and overall response rates compared to the twice-weekly option.
Consensus estimates are for the drug to continue to grow from $835 million in sales in 2017 to $1.5 billion in sales by 2022. The sNDA filing shows that the drug continues to develop on track with expectations, and could become one of the larger revenue drivers for Amgen going forward.
Amgen's Competitors Have a Number of Key Developments Coming Up
In sum, Amgen has had a number of incrementally positive datapoints over the last several months that has driven the stock higher. Primarily, prescription data suggests that Aimovig has had a strong launch. Kyprolis also continues to develop on track with its sNDA submission.
Going forward, there are a number of drugs to monitor. In the anti-CGRP space, Aimovig's performance will continue to be scrutinized by investors. Competitor developments should also be watched given the crowded nature of the space. Teva's fremanezumab will hear from the FDA by September 16th, and Eli Lilly's galcanezumab expects an FDA decision some time in 2H18.
In the biosimilar space, developments for Mylan's Fulphila will be worth monitoring, as will the FDA decision on Coherus's Neulasta biosimilar by November 3rd. Additionally, Amgen's Amgevita will launch in the EU in October and will also be a key indicator of how durable Humira's sales are in the face of biosimilar competition.