GS on recent Psoriasis Meeting:
At a dermatology meeting biological agents were major topics for treatment of psoriasis.
We expect such agents to drive growth of the market which has multibillion potential.
Incremental data were presented to further differentiate Enbrel (AMGN), Amevive
(BGEN), Raptiva (DNA) and Remicade (JNJ). Our observations: (1) continue to expect
Enbrel and Amevive to be the preferred agents near term but the competition should
intensify in 2004, (2) off-label use of Enbrel should grow, and (3) reimbursement of new
products, such as Amevive, usually take months to become routine. Therefore, Amevive
sales in H1/03 should be limited. We maintain our estimates and ratings - AMGN(OP),
BGEN(OP) & DNA (IL). Our sector view remains Neutral.
1. CONTINUED DIFFERENTIATION OF BIOLOGICS IN PSORIASIS, A
MULTIBILLION MARKET
At the annual meeting of the American Academy of Dermatology (AAD), biologics were a major
focus of presentations on the treatment of psoriasis, a multibillion market. As with rheumatoid
arthritis (RA) and multiple sclerosis (MS), we believe the introduction of biologics will change
medical practice and expand the number of patients treated for psoriasis. Amgen, Biogen,
Genentech and Johnson & Johnson (JNJ) presented incremental data on their biological therapies,
Enbrel, Amevive, Raptiva, and Remicade, respectively. The data support continued differentiation
of these agents (see Table 1).
Based on surveys by the National Psoriasis Foundation, there are about 4.8MM psoriasis patients
worldwide, 1.4MM of whom have severe disease. About one-third of the severe patients are
undergoing systemic therapy, one third are treated with topical agents and the rest are refractory to
existing therapy. The initial uptake of biological agents will likely be among refractory patients.
Biogen's Amevive is the only biological agent approved by the FDA for psoriasis. Amgen's Enbrel
has been approved for psoriatic arthritis (PA), but not psoriasis. However, there is significant
overlap between the two conditions and the PA indication allows Amgen to promote to
dermatologists.
The psoriasis market should be large enough to support several products with different mechanisms
and attributes. In the near term, we expect Amevive and Enbrel to be the preferred agents. The
market might be crowded long-term. In addition to Enbrel and Raptiva, Remicade (JNJ) and
Humira (Abbott) are also in clinical development.
The choice of biologic therapy will depend on a multitude of parameters, including:
1) Potency- The potency of Enbrel appears to be superior to that of Amevive and Raptiva. The
Phase II data on Remicade at 2 medical centers were dramatic but need to be validated in larger
studies.
2) Onset of action- Raptiva and Remicade have faster onset of action than Amevive. Enbrel has an
intermediate onset.
3) Safety- Enbrel has more than five years of safety data from use in RA with known and
manageable risks thus far, but the long term safety of Enbrel in psoriasis has yet to be determined.
Amevive therapy requires weekly monitoring of T-cell counts. Thus far, low T-cell counts has not
been associated with infections or major side effects. In the Phase III trials of Raptiva, 3-5% more
patients can experience flares of psoriasis symptoms if Raptiva therapy was terminated abruptly.
Such flares are not seen commonly in Phase III studies of Amevive nor Enbrel. Genentech is
performing studies to gradually terminate therapy, maybe in the presence of other agents such as
methotrexate. TNF blockers (Enbrel, Remicade and Humira) are associated with the risk of
infections and lymphoma. Many of the side effects of Remicade overlap with those of Enbrel.
However, neutralizing antibodies (NAB) and infusion reactions are unique to Remicade.
Methotrexate might be required to reduce NAB, thereby limiting adoption.
4) Route of administration- Amevive is given intramuscularly (IM) or intravenously (IV) in
physicians offices. Enbrel, Raptiva and Humira are self-injected subcutaneously (SC), biweekly,
weekly and once every two weeks, respectively. Amgen is developing a weekly formulation for
Enbrel. For Remicade, a 2-hour IV infusion at weeks 0, 2 and 6 is required.
5) Duration of response- Amevive has the longest duration of response thus far (over 1 year in
certain patients). We expect Raptiva and possibly Enbrel to be used on more of a chronic basis. For
Remicade, maintenance therapy every 6 to 8 weeks is likely.
6) Reimbursement- Approximately 60% of psoriasis patients are covered by private insurance or are
self-paid, 20-25% are covered by Medicare, and 9- 13% are covered by Medicaid. Medicare does
not cover self-injections. The fees associated with administering Amevive and Remicade might be a
financial incentive for certain physicians to use the product. However, the cost to provide 2-hour
infusions (Remicade) is much higher for the physician than for IV injections (Amevive).
Amevive is the only biologic agent approved by the FDA. While setting up reimbursement will take
time, Amevive will likely be approved by most payors in late 2003. Amgen plans to seek
compendium listing for psoriasis while awaiting FDA approval, which may be granted in H2/04. In
the interim, there might be some off label use by dermatologists, who are being targeted for the
approved indication of PA. However, it might be more cumbersome to obtain reimbursement than
for Amevive. For Remicade, some patients are already reimbursed under managed care or Medicaid
to treat psoriasis. However, we do not expect significant adoption due to the inconvenience of the
long infusion time, the concerns about NAB and infusion reactions and relatively limited clinical
data.
Table 1: Comparison of selected biologics for psoriasis
Product Amevive Enbrel Raptiva Remicade
Company BGEN AMGN DNA/XOMA JNJ
Dermatology Psoriasis Psoriatic Psoriasis Psorasis
Indication approved arthritis under FDA Phase III
Approved, review
Psoriasis
Phase III
Injection IM, IV SC SC IV-2 hr
infusion
Frequency of 1X/wk 2X/wk 1X/wk 0,2 & 6 wk,
Injection 12 weeks continuous? Continuous? then every
6-8 wks
Potency + 3+ 2+ 4+
Onset of action + 2-3+ 4+ 4+
Duration of
Remission 4+ 2+ + 2+
Side effects T cell injection Flare Neutralizing
depletion but site rxns, antibody,
no increase TB, cancer?, infusion rxn,
in infection multiple TB, cancer?,
or cancer sclerosis, lupus?,
thusfar worsen CHF worsen CHF
Source: Company data, Goldman Sachs Research
2. DETAILED PHASE III DATA ON ENBREL IN PSORIASIS COULD BOOST OFF-LABEL
USE
We expect Amgen to present for the first time the details of a Phase III trial of Enbrel in psoriasis to
the general dermatology community. The presentation will be made by Dr. Alice Gottlieb at
4:35PM PDT on Monday, March 24. Amgen will also host an analyst meeting at 6PM PDT on the
same day.
At its analyst meeting in February and on March 21, 2003, Amgen provided preliminary positive
results from the Phase III trial. The study involved 652 patients who were treated with placebo, 25
mg Enbrel biweekly or 50 mg Enbrel biweekly for 12 weeks. At 3 months, 4%, 14%, 34% and 49%
of the patients showed 75% PASI. The response at 25 or 50 mg biweekly was 2-3X higher than that
of Amevive and 1-2X above that of Raptiva. The clinical improvement continued throughout the
study.
At 6 months, 44% and nearly 60% of patients treated with 25 mg and 50 mg of Enbrel biweekly
showed at least 75% improvement in PASI. There was also a significant benefit as measured by
physician global assessment, patient global assessment, and quality of life scales. Enbrel was
generally well tolerated. However, the onset of action was slower than that seen in PA.
We expect the Phase III data to drive further off-label use of Enbrel in psoriasis. We maintain our
2003 and 2004 sales forecasts of $1.3B and $2.0B for Enbrel, respectively.
3. INCREMENTAL DATA ON AMEVIVE
The AAD meeting is the first major dermatology conference for Biogen after the FDA approved
Amevive in late January, 2003. We had expected the company to mount a significant effort to
educate physicians and promote the product. However, we found the activities at the Biogen booth
to be rather subdued. It is not clear whether Biogen wished to smooth out the reimbursement
process before driving demand or was restricted for other reasons.
As with many new biotech products, it will take 6-9 months for the reimbursement process to
become routine. We continue to expect essentially no Amevive sales in Q1/03. We believe that
some managed care organizations have started to reimburse patients, though with varying approval
processes and levels of copayment. Medicare patients can be reimbursed under a temporary code
that is manually processed. We do not expect significant penetration among Medicare patients until
a permanent J code is granted, probably in H2/03.
Biogen is distributed to physicians without going through pharmacies. Therefore, it is difficult to
track prescription trends using conventional means, such as IMS data. The FDA approved both the
intravenous (IV) and intramuscular (IM) formulations if Amevive, both of which have to be
administered in physicians offices. The wholesale acquisition cost (WAC) for the IV and IM
formulation is $796 and $560 per vial whereas the Average Wholesale Price (AWP) approximates
$995 and $700, respectively. Assuming physicians can be reimbursed at 95% AWP, there could be
over $100 in financial incentive per injection for the provider.
For the patient, the drug cost could be $7,000-$10,000 per year assuming 12 weekly injections.
Other costs associated with Amevive include the IV/IM administration at $60-120/$7-10 per
procedure, respectively. Due to concern about the reduction in blood T lymphocytes, patients will
be monitored weekly. The cost of T cell monitoring is $50-$55 per test.
Incremental data presented at the AAD should support the penetration of the product as follows:
a. Long duration of action. The onset of response to Amevive tends to be slow (it can take up to
several months for some patients). However, the duration of action seems to be much longer than
competitive agents. Previously reported data from the Phase III study of Amevive show that
responders could maintain a 50% or greater reduction in the Psoriasis Activity Severity Index
(PASI) for a median of 7 months. One of the AAD abstracts showed two case studies with
remission of up to 1.5 years after termination of 4 courses of therapy. The long remission might be
appealing to patients who prefer an intense course of treatment but not chronic therapy.
d. Safety. We also expect follow-up data to show that the numbers of subsets of T cell lymphocytes
in psoriasis patients in the 3 pivotal studies can fluctuate widely even when treated with placebo.
About 609% of patients had CD8+ T cell counts below the lower limit of normal at 12 weeks after
the last dose. In addition, long-term follow-up has not shown significant increase in side effects thus
far. Furthermore, use of Amevive together with immunosuppressants such as methotrexate,
cyclosporine, Arava and tumor necrosis factor (TNF) blockers, such as Enbrel and Remicade did
not increase the risks of side effects.
c. Potential use in combination with ultraviolet light to expand usage. Psoriasis patients are often
treated with a combination of therapies, including ultraviolet B light (UVB) and systemic therapies.
Amevive is approved for patients with moderate to severe psoriasis who are candidates for systemic
therapy or phototherapy. There is limited data on the use of Amevive together with phototherapy. In
order to expand the use of Amevive, Biogen is examining the use of Amevive in combination with
UVB therapy and immunosuppressants.
The interim data on 30 patients were presented. All patients received IM Amevive weekly for 12
weeks. They were randomized into 3 groups: (1) no UVB, (2) UVB 3X/week until clear or up to 6
weeks, or (3) UVB 3X/week until clear or up to 12 weeks. All patients were followed for another
12 weeks. PASI 75 was reached by 78% of the patients receiving Amevive alone, a rate that was
higher than that observed in prior studies but the current study is very small. UVB enhanced the
efficacy and onset of action of Amevive, with 100% of the patients from both UVB groups
achieving PASI 75.
There was no difference in response in the 2 dose groups of UVB. Therefore, a lower dose of UVB
might be feasible when combined with Amevive. There was no increase in side effects during the
study. However, the long-term impact of combining UVB, which may increase skin cancer, with
Amevive, a T cell suppressant, has yet to be determined.
d. Psoriatic arthritis (PA). In a small study of 11 patients, IV Amevive for 12 weeks was effective in
reducing symptoms of PA. However, the level of efficacy was below that of Amevive.
4. POSITIVE DATA FROM THIRD PHASE III STUDY OF RAPTIVA
In December 2992, Genentech and its partner, XOMA filed an FDA application for Raptiva.
Genentech expects a 10-month review by the FDA with a potential FDA decision in Q4/03.
Assuming Raptiva is launched in Q1/04, it would be 12 months behind Amevive. We forecast
$75MM in sales in 2004.
The FDA application is based on 3 Phase III trials. Genentech will be the commercial manufacturer.
A mixture of Raptiva manufactured by Genentech and by XOMA was used in the first 2 Phase III
studies. However, the Genentech material used did not meet the equivalency standards set by the
FDA when compared to the XOMA material. Therefore, a third study was performed using
Genentech's material only.
On March 21, 2003, Genentech released data from the third study which were in line with those
from the first 2 trials (see Table 2).
Table 2- Positive data from the three Phase III trials of Raptiva*
placebo 1 mg/Kg/wk 2 mg/Kg/wk
======= ========= =========
Study 1 2 39 27
Study 2 5 22 28
Study 3 4 27 ND
Source: Company data
* Data are expressed as % patients with PASI 75 at 12 weeks
The study involved 556 patients, 187 of which were treated with placebo and the rest were treated
with 1mg/Kg of Raptiva weekly. After 12 weeks, 27% of Raptiva patients showed a response
versus 4% of placebo patients as measured by PASI 75. For PASI 50, the response was 59% versus
14%, respectively. There was also an improvement in quality of life scores. There were more
hypersensitivity reactions with Raptiva versus placebo but the difference was not significant. There
was no data on flares which were seen in previous studies when Raptiva was terminated abruptly.
Further evaluation of the first two Phase III trials showed 15% of rebound in Raptiva treated
patients versus 12% in placebo using the National Psoriasis Foundation definition of rebound (PASI
of 125% or greater of baseline).
An open-label study over 60 weeks showed that continuous Raptiva therapy provided efficacy that
was at least as good as that obtained at 12 weeks. Of the 338 patients enrolled during the 12 weeks,
228 continued therapy with 80% maintained PASI-50 and 65% maintained PASI-75 at 60 weeks. |
