Incyte Corporation's (NASDAQ:INCY) Jakafi is the only approved treatment for myelofibrosis, and that's turned Jakafi into a billion-dollar blockbuster drug. The company's enviable market position could be coming to an end, though, because two competing drugs are making their way toward the FDA.

Can Incyte maintain its dominance in this indication or will new drugs from Celgene (NASDAQ:CELG) and Geron Corp (NASDAQ:GERN) carve away at Jakafi's sales.

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A big need for new treatment

Myelofibrosis is a tough-to-treat bone marrow disease with a poor prognosis and limited treatment options. It leads to an enlarged spleen, fatigue, and pain. Over time, it can turn into life-threatening leukemia.

The disease is characterized by decreased production of red blood cells in the bone marrow caused by scarring resulting from the overproliferation of abnormal cells. The only curative treatment is a bone marrow transplant; however, high mortality rates and complications make transplants risky for many people. As a result, thousands of patients are prescribed Jakafi, Incyte's $1.1 billion per year drug. 

Jakafi's can keep JAK proteins that tell blood cells to divide and grow in check, but it's far from a perfect drug. In trials, Jakafi reduced spleen volume for many patients and overall survival was 63.5 months compared to 45.9 months for the control arm, but up to 75% of patients discontinue treatment within five years because of toxicity or intolerance.

A new option approaches

In January, Celgene acquired Impact Biomedicines to get its hands on fedratinib, a JAK inhibitor that's more selective than Jakafi. 

Fedratinib was developed by Sanofi, but Sanofi shelved the drug in 2013 after the FDA halted clinical trials following reports of a few potential cases of Wernicke's encephalopathy (WE), an acute neurological condition. The trial halt was a big blow because fedratinib had already proven itself to be effective in both treatment-naive myelofibrosis patients and patients who had discontinued Jakafi.

Despite the FDA's decision, Sanofi researchers remained undaunted. In 2016, they founded Impact Biomedicines and secured the rights to fedratinib. Last fall, that gambit paid off after data the company submitted convinced the FDA to change its mind and lift its clinical hold. 

With the FDA out of the way, Celgene acquired Impact Biomedicines earlier this year for $1.1 billion up front, plus future milestone payments.

Celgene plans to file fedratinib for FDA approval by the middle of 2018. It's anyone's guess if the FDA will approve it, but its efficacy suggests it may have a good shot, especially now that the FDA appears less concerned about its safety. 

In trials, 55% of people who had discontinued taking Jakafi saw a reduction in spleen volume of 35% or more after taking fedratinib. Fedratinib also improved symptoms with 26% of patients achieving a 50% or greater reduction in total symptom score from their baseline score. Fedratinib was also effective in treatment-naïve patients. In phase 3 trials, 47% of patients saw a 35% or greater reduction in spleen size at 24 weeks and 36% of patients had a symptom score that improved by at least 50% at 24 weeks.

Granted, it's bad science to compare results from separate trials, but the data does appear to match up pretty well against the results reported from the phase 3 trial used to support Jakafi's FDA approval. In its trial, 38% of patients had a 35% or greater reduction in spleen volume.

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A disease-modifying drug on the horizon?

Jakafi and fedratinib target JAK proteins to relieve the symptoms associated with myelofibrosis, but Geron's imetelstat could crimp scarring altogether by preventing malignant cells from replicating. 

Imetelstat inhibits telomerase, an enzyme that extends the telomeres of chromosomes on malignant cells so that they can continue replicating. By interfering with telomerase, Geron believes it might be able to halt myelofibrosis in its tracks and perhaps reverse bone marrow scarring.

The potential associated with imetelstat's novel mechanism of action is big, but it's far from a slam dunk that its trials will succeed.

Liver toxicity concerns have limited the maximum dose that can be studied in trials, and development of a low-dose formulation was abandoned by Geron's development partner, Johnson & Johnson, after it failed to demonstrate it was effective.

Data from 2015 for the remaining 9.4 mg/kg dose of imetelstat is intriguing, but there's some concerning safety signals with that dose too. In a pilot study, 7 of 33 patients had a complete or partial remission on the 9.4 mg/kg dose with a median duration of response of 18 months, and a little more than a third of patients saw a 35% or greater reduction in spleen volume on imetelstat. Importantly, bone marrow fibrosis reversed in all four patients that had achieved a complete remission in this trial.

Those results are pretty remarkable, but it shouldn't be ignored that 76% of patients discontinued treatment and one person died in this trial because of imetelstat. Furthermore, three patients saw their disease progress or relapsed after initially responding to imetelstat. Additionally, grade 4 thrombocytopenia and grade 4 neutropenia occurred in 21% and 18% of patients, respectively.

Can these drugs cross the finish line?

Fedratinib should be in the hands of the FDA soon, so a decision on it could come early in 2019. Imetelstat's future is a bit less certain.

Johnson & Johnson hasn't decided if it wants to continue collaborating with Geron on imetelstat. According to Geron, J&J plans on making that decision in Q3, 2018. If imetelstat's phase 2 studies convince J&J to continue developing it, then Geron stands to receive a continuation milestone of between $65 million and $135 million, depending on if Geron exercises an option to co-commercialize imetelstat. A J&J go-ahead would also make Geron eligible to collect between $765 million to $820 million in future development, regulatory, and sales-based milestones -- plus royalties on any eventual sales.

Overall, Incyte will have this market to itself a bit longer, but if fedratinib and imetelstat eventually get a green light, it could cause Jakafi's sales to tumble. Because of that risk, investors will want to watch Celgene and Geron's press releases closely for news of their progress.


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