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5 Drugmakers Battle Over the $10 Billion Hemophilia Market

By Todd Campbell - Feb 2, 2017 at 10:40AM

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Shire, Bayer, CSL, and Novo Nordisk are fighting back against Bioverativ to protect their share of this multibillion-dollar market.

Biogen spun-off of its long-lasting hemophilia drugs as a new company today, but that company -- Bioverativ (BIVV) -- may struggle to deliver breakneck growth this year. Why? Because Shire Plc (NASDAQ: SHPG), Bayer (BAYR.Y -0.51%), CSL Ltd. (CSLL.Y 1.29%), and Novo Nordisk (NVO -0.26%) are fighting back against Bioverativ with their own long-lasting factor replacement therapies. Will Bioverativ be able to fend off these deep-pocketed foes?

Men and women in lab coats working together on a clear drawing board

Image source: Getty Images.

Improving treatments

In the past, hemophilia patients have relied upon factor replacement therapies that need to be taken as often as every other day. However, that's changing because Eloctate and Alprolix use a new approach that allows them to bind to a recirculating protein called Fc so that they remain in the bloodstream longer.

Instead of being dosed every other day, hemophilia A patients who switch to Eloctate can reduce their dosing frequency to once every three to five days. Similarly, hemophilia B patients can reduce their dosing frequency from twice a week to up to once every 10 days by switching to Alprolix. 

Eloctate and Alprolix's improved dosing schedule has resonated with doctors and patients, and as a result, their sales have taken off since winning FDA approval in 2014. The two drugs produced a combined $560 million in sales for Biogen in 2015, and in 2016, they generated $847 million in sales.

Their success has come largely at the expense of prior-generation therapies, including those sold by Shire, Bayer, CSLBehring, and Novo Nordisk. However, those companies haven't been resting on their laurels. Each is fighting back by developing their own longer-lasting therapies.

The charge is being led by Shire, which became the biggest hemophilia player when it bought Baxalta last year. In order to blunt the risk of Eloctate to its top-selling hemophilia A drug, Advate, Baxalta won FDA approval of Adyvonate, a twice-weekly therapy, in November 2015. In Q3, Adyvonate helped Shire report total hemophilia revenue of $884.1 million.

Similarly, Bayer won FDA approval last march for Kovaltry, a two-to-three times per week hemophilia A therapy. The approval shored up market share for its top-selling Kogenate, and in Q3, Bayer reported hemophilia sales of 302 million euros. 

CSLBehring won FDA approval for Afstyla, a twice-weekly hemophilia A therapy, and Idelvion, a hemophilia B therapy that can be dosed at up to 14-day intervals, last year, too. Although CSL hasn't updated investors on sales through the end of 2016, its full fiscal year hemophilia sales were $1 billion through June, 2016 .

Not to be left out, Novo Nordisk, which gets about 9% of its revenue selling hemophilia drugs, and is No. 2 globally in hemophilia market share, is playing catch up. The company hopes to find out whether or not the FDA will green light N9-GP, a long-lasting hemophilia B treatment with once-weekly dosing, soon. Also, a phase 3 study for N8-GP, a long-lasting hemophilia A treatment, is under way. If successful in trials, Novo Nordisk thinks it can file for N8-GP's approval next year.

Looking forward

The market for hemophilia treatment is quickly becoming very competitive. Bioverativ benefits from first-mover advantage in the market for long-lasting treatment, but that advantage gap may shrink as doctors become increasingly familiar with these other treatment options. Undeniably, Bioverativ's competitors have deep pockets and well-established relationships with doctors that could help them derail Eloctate and Alprolix's momentum. 

How this market shakes out in the coming year may be as uncertain as how it shakes out in the coming five to 10 years. All these companies are knee-deep in developing next-generation solutions, and that makes it tough to guess which company will come out on top. At this point, Shire may have an edge over Bioverativ, because while Bioverativ plans to start clinical trials for a longer-lasting hemophilia A drug (BIVV 073) soon, Shire's SHP656 is already in phase 1/2 studies in that indication. 

This market may be big enough to share, and even if it isn't, consolidation could still make Bioverativ worth owning. However, investors will need to keep close tabs on all of these companies given how quickly this market is moving.

Todd Campbell has no position in any stocks mentioned. His clients may have positions in the companies mentioned. The Motley Fool owns shares of and recommends Biogen. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Novo Nordisk A/S Stock Quote
Novo Nordisk A/S
$102.93 (-0.26%) $0.27
Biogen Inc. Stock Quote
Biogen Inc.
$219.91 (0.78%) $1.71
Bayer Stock Quote
$13.56 (-0.51%) $0.07
CSL Limited Stock Quote
CSL Limited
$103.72 (1.29%) $1.32
Bioverativ Inc. Stock Quote
Bioverativ Inc.

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