The race is on among pharmaceutical companies to obtain Food and Drug Administration (FDA) approval of new products serving the atopic dermatitis (AD), or severe and chronic eczema, market. Incyte (INCY -0.08%) is one of those companies, and is coming off successful phase 3 trials of its ruxolitinib cream, but is now facing challenges brought on by delays in FDA approval.
The company anticipated receiving word from the FDA in June of this year, but that has since been backed up until September 21. This makes for the second FDA delay involving a drug from Incyte. In April, its collaborative effort with Eli Lilly, olumiant, also received a delay until late summer.
Image source: Getty Images.
The recent delay for anticipated approval of ruxolitinib as a treatment cream for AD is not necessarily through the fault of Incyte. The FDA has recently placed emphasized focus on the potential side effects of JAK inhibitors, such as ruxolitinib, which belong to a family of medicine called DMARDs (disease-modifying antirheumatic drugs).
JAK inhibitors are used to help reduce inflammation by limiting an overactive immune system, which helps defend against germs. However, in doing so these limitations have resulted in some potential side effects of a weakened immune system, such as cancerous tumors, anemia, tuberculosis, and shingles.
A lengthening lead
As a result of the risk factors, FDA delays -- rulings backed up to third quarter -- could impact go-to-market dates for JAK inhibitor-based products from Incyte, Eli Lilly (olumiant), Pfizer (abrocitinib), and AbbVie (rinvoq for AD). At the same time this could provide an excellent opportunity for market-leading Dupixent, the currently approved AD cream from collaborative competitors Sanofi (SNY -1.28%) and Regeneron (REGN 0.45%), to potentially lengthen its lead over the competition.
The key difference for Dupixent to avoiding FDA safety scrutiny is that it is not a JAK inhibitor. Dupixent is an IL-4 and IL-13 inhibitor, which does not have the safety risks associated with JAK inhibitors.
Dupixent, offered as an AD cream and an injectable for asthma, was responsible for more than $1.25 billion for Sanofi during the first quarter, a 45% quarterly gain year over year, including a 16% gain in prescriptions new to the brand. The company stated during its first-quarter results that high demand was generated from the AD market in adults, adolescents, and children ages 6-11. This is an important takeaway, because AD is common in children, at a rate of 10.7% in the U.S., with 33% of those being considered moderate to severe cases.
On top of those strong first-quarter results and competitor delays, Sanofi is making the most of its opportune timing in an attempt to pull away from the competition. According to data from real-time TV ad tracker iSpot.tv, Dupixent took over the top spot in pharma TV ad spend during the month of May. During the month, Sanofi and Regeneron spent $24 million on 10 spots, up from $20 million in April. Of the 10 ad spots, six were dedicated to AD, while four were focused on asthma.
What's at stake?
The atopic dermatitis market is an estimated 18 million people, with a total of 31 million having some form of eczema. There are treatments such as Dupixent, but currently no known cure. As Dupixent continues its reign, and competitors await FDA rulings, there is a potential $34 billion market value to be had by 2026, based on an estimated compound annual growth rate between 7.8% to 10.4%.
Right now it looks as though the collaboration between Sanofi and Regeneron is on its way to victory in this space, and the AD market could be a gold mine in the near future. However, if favorable FDA rulings come through in the third quarter, the AD cream space could become crowded quickly. If Incyte gets good news and is the first to market with its product, I would consider a $1,000 investment, but not before then. If the FDA denies approvals or requires additional support data, Sanofi might be the smarter play.
