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Are Pfizer's Xeljanz Results a Boost for Amgen?

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On Thursday, Pfizer  (NYSE: PFE  ) announced top-line results from two phase 3 clinical trials examining its drug Xeljanz in chronic plaque psoriasis. Investors have been excited about the prospects for Xeljanz as an alternative to the injectable immunotherapies that dominate the autoimmune disease market. While Xeljanz demonstrated non-inferiority to Amgen's  (NASDAQ: AMGN  ) blockbuster Enbrel, lets dig deeper and see if Xeljanz can really disrupt the immunotherapy landscape.

A new hope for autoimmunity
Megablockbusters Enbrel from Amgen, Humira from AbbVie  (NYSE: ABBV  ) , and Remicade from Johnson & Johnson are injectable or IV immunotherapies that have revolutionized autoimmune disease treatment. All three are approved for rheumatoid arthritis, chronic psoriasis, and other autoimmune diseases, but Enbrel has really shined as the standard of care in severe psoriasis. Enbrel sold for $4.2 billion in 2012.

Xeljanz is first-in-class of the new JAK kinase inhibitor family of drugs. Rather than an antibody, Xeljanz subdues autoimmunity as an orally available small molecule, and would have a significant dosing advantage if Pfizer can show that it is as good or better than Enbrel. And that's what they did...

Going head to head
In the OPT COMPARE phase 3 trial, Xeljanz was compared directly to Enbrel after treatment for 12 weeks. In the low-dose arm of the trial, 5 mg Xeljanz failed to perform as well as Enbrel, but did show an effect compared to placebo in a companion trial. The 10 mg oral dose of Xeljanz did meet its primary endpoint of non-inferiority.

The press release also states, "No new safety signals for [Xeljanz] were observed in these studies." The key word here is "new." In November, the FDA approved the 5 mg dose for treatment of rheumatoid arthritis, but rejected the 10 mg dose on concerns over the risk/benefit profile and the occurrence of infection. Efforts are under way to straighten out the issue via pooled post hoc analyses and consultation with FDA officials. You can be sure Amgen will be watching the safety data from the 10 mg dose closely.

The complete data set for the 5 mg dose could be informative, as well. If the 5 mg arm had a clinically relevant impact, despite its inferiority to Enbrel, Xeljanz could still grasp some market share as an oral alternative. Amgen really needs Enbrel as a long-term revenue base, as sales of Aranesp and Epogen begin to wane, and it embarks on a battle with Regeneron and Sanofi, among others, to develop and market its blockbuster-bound PCSK-9 inhibitor.

A love-hate relationship
Pfizer and Amgen have very quickly transformed from allies to enemies on the autoimmune front. The two co-developed Enbrel, and until late this year Amgen paid Pfizer royalties on its sales. That relationship has swung to the other extreme now that the Enbrel pact has expired and Pfizer is pushing its oral alternative.

In the mean time, AbbVie finds itself a third wheel in the big biotech-big pharma battle. Humira is set to lose patent protection in 2016, and the introduction of Xeljanz into the rheumatoid arthritis market could slash sales before that date. But if it were up to Amgen, doctors would continue to prescribe Humira until it ramps up its biosimilars franchise, which includes a version of Humira.

The bottom line
The immunotherapy space is crowded with superstars, and that space is only getting tougher with the introduction of oral competitors. Pfizer's entrance with Xeljanz has the potential to redistribute the landscape a bit, and Celgene's apremilast could disrupt the market even further. Keep an eye on Pfizer's pricing of Xeljanz, which a fellow Fool thinks could detract from its marketability. Also keep an eye out as Pfizer deals with the safety concerns of the 10 mg dose. Xeljanz's label expansion and dosing increase will not only be great for Pfizer, but could have implications for several companies in the space.

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