There are more than 23 million people worldwide with rheumatoid arthritis, and despite current treatments, many patients fail to achieve disease remission or significant reductions in disease activity. The size of the addressable market and need for new drugs have made this indication a focus of drug development and new therapies from AbbVie (ABBV 0.79%) and Gilead Sciences (GILD -0.16%) that work similarly are fast-approaching the Food and Drug Administration's finish line. Are these stocks about to battle for billions of dollars in market share?
The rheumatoid arthritis market today
Currently, most rheumatoid arthritis patients begin treatment on nonsteroidal anti-inflammatory drugs (NSAIDs), including aspirin and ibuprofen, before progressing to disease-modifying antirheumatic drugs (DMARDs), including methotrexate.
NSAIDs attempt to reduce joint-damaging inflammation by blocking production of cyclooxygenase (COX), an enzyme that produces prostaglandins that promote inflammation. DMARDs also attempt to reduce inflammation, but they block cytokines, proteins that help control cell growth and immune responses.
When treatment with traditional DMARDs is inadequate, patients may progress to the use of biologics that block tumor necrosis factor (TNF), an inflammation-causing protein that can be overproduced in rheumatoid arthritis patients. AbbVie's $18 billion-per-year Humira is one of the most widely known of these anti-TNF biologics.
NSAIDs and traditional DMARDs can cause stomach problems, and traditional DMARDs can also cause liver problems and increase risk of infection. Similarly, anti-TNF medications increase patients' risk of infection, including tuberculosis. Anti-TNFs shouldn't be used in patients with heart failure or multiple sclerosis because of increased risks, and while it's rare, anti-TNF patients could be at an increased risk of developing cancer, including lymphoma.
In the U.S., there are about 1.5 million people with rheumatoid arthritis, and because rheumatoid arthritis medications (particularly anti-TNFs) are pricey, spending on rheumatoid arthritis eclipses $19 billion.
An emerging treatment approach
Many rheumatoid arthritis patients don't respond adequately to existing treatments, so drugmakers have been developing drugs that are increasingly specific in targeting enzymes involved in immune response.
Inhibiting the Janus kinases (JAK) family of signaling molecules is one of the most intriguing of these next-generation approaches. Pfizer (PFE 1.35%) became the first company to win FDA approval of a JAK inhibitor for rheumatoid arthritis when Xeljanz got the green light in 2012. Xeljanz, which interacts with three of the four JAKs (JAK-1, JAK-2, and JAK-3), won a regulatory OK after demonstrating it elicited better responses in patients uncontrolled by DMARDs.
Because of its efficacy, Xeljanz has become a blockbuster with annualized sales of $1.8 billion. However, Xeljanz's safety profile is arguably like that of DMARDs and anti-TNFs: it can cause infections, and it may increase the risk of herpes zoster relative to other DMARDs.
Since targeting JAK is effective, but there's still room for improvement in safety, AbbVie and Gilead Sciences are each advancing new drugs that target JAK more selectively.
An emerging battle over market share
Both AbbVie's upadacitinib and Gilead Sciences' filgotinib, which it licensed from Galapagos NV (GLPG 0.80%), selectively target JAK-1, but upadacitinib is closer to the FDA finish line. Results from upadacitinib's phase 3 rheumatoid arthritis trials have already been reported, and AbbVie anticipates filing for an FDA OK before the end of 2018.
Although filgotinib is trailing upadacitinib in the race to commercialization, Gilead Sciences unveiled results from the first of three phase 3 trials earlier this week, and based upon the data, filgotinib appears to match up well against upadacitinib.
In a phase 3 trial evaluating upadacitinib in patients inadequately treated by DMARDs, 65% and 56% of patients receiving 15 mg or 30 mg of upadacitinib once daily, respectively, achieved a 20% improvement on the American College of Rheumatology (ACR20) scoring system. Also, 34% and 36% achieved a 50% improvement (ACR50) and 12% and 23% of patients achieved a 70% improvement (ACR70) on those doses, respectively. In another phase 3 DMARD nonresponder study, ACR20, ACR50, and ACR70 on the 15mg and 30mg doses were 64%/38%/21% and 66%/43%/15% at 12 weeks, respectively.
Filgotinib's first phase 3 study in a similar DMARD population was similarly strong. A 200 mg dose of filgotinib once daily resulted in ACR20 in 66% of patients, ACR50 in 42.9% of patients, and ACR70 in 21.8% of patients.
Who will win?
It's bad science to compare results from separate trials. However, evidence suggests so far that both filgotinib and upadacitinib are effective. Results from two more filgotinib phase 3 studies in slightly different patient populations are expected early next year, so investors will want to keep an eye out for that data.
Assuming filgotinib's remaining two rheumatoid arthritis studies are positive, safety could determine which of these two drugs ends up more widely used.
Based on data from phase 2 trials separately presented at the American College of Rheumatology conference in 2017, filgotinib might have an edge. The rate of serious infection for upadacitinib and filgotinib patients was 2.3% and 1.5%, respectively, and the rates of herpes zoster, deep vein thrombosis, and pulmonary embolism were lower for filgotinib too.
It remains to be seen if these drugs secure FDA OKs and, if they do, how doctors will interpret consolidated phase 3 efficacy and safety trial data. The rheumatoid arthritis market is expected to increase to $30 billion in 2027, so there's enough room for multiple players. If these drugs are determined to be more effective and safer than other DMARDs and anti-TNF therapy, then both drugs could become blockbuster arthritis treatments, making patients the biggest winners from this advance in treatment.