Analyst: Novartis AG, Celgene Might Go Toe-to-Toe Over Psoriasis Drugs

Published: Sep 26, 2014

Analyst: Novartis, Celgene Might Go Toe-to-Toe Over Psoriasis Drugs

September 26, 2014

By Riley McDermid, Breaking News Sr. Editor

News that Novartis AG's promising psoriatic arthritis drug secukinumab (AIN457) has met the primary endpoint in two phase III studies could be the beginning of a serious price war between the drug and its Celgene competitor Otezla, said an analyst Friday.

Citigroup biotech analyst Yaron Werber said that the overlap of the drugs could be significant, in a psoriatic arthritis market that could reach more than $3.5 billion in 2023, as a flock of biologics and penetration of premium-priced orals arrives.

“Overall, this is a more severe patient population than the Otezla Phase III with adult onset psoriatic arthritis (PsA) studies in our view. Patients could have had up to three prior TNF therapies,” wrote Werber in a note to investors. “The dosing was once weekly for the first four weeks followed by once monthly dosing starting at week four. The primary endpoint of ACR20 response criteria and secondary endpoints included PASI75.

Novartis plans to submit global regulatory applications in 2015 and “we note approval for psoriasis is expected in late ’14/early ’15,” wrote Werber. “Secukinumab is the first IL-17 inhibitor to have positive phase III data for PsA.

Secukinumab met primary and key secondary endpoints in two pivotal Phase III studies showing superiority to placebo in patients PsA.

PsA is a debilitating, long-lasting condition that causes inflammation of joints and skin and affects up to 30 percent of people with psoriasis globally, but as much as 45 percent of people infected with PsA are dissatisfied with current treatment.

That leaves the market wide open for new innovators like Novartis, wrote Werber, though there is still plenty of upside for Celgene.

“We estimate that [about] 80 percent of Otezla patients come onto the drug from methotrexate, steroids, or are treatment naïve, however we estimate [about] 20 percent of patients are TNF failures,” wrote Werber. “However, we note that Otezla demand/access metrics continue to be encouraging and this week’s label expansion into PsO bodes well for demand.”

“We continue to have high conviction on Celgene and believe that the stock is undervalued and the stock remains one of our top picks in large-cap given the several key value creating catalysts in the next 12 months and >20 percent revs/EPS growth ’14-’17,” Werber concluded.

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