Social distancing measures aimed at controlling the coronavirus pandemic have slowed down a lot of government agencies, but they haven't prevented regulators from reviewing new drug applications at a rapid pace. The FDA has already approved 35 novel new drugs this year, and keeping up with all of them is a task few of us have time for.
Recently, Evaluate, a healthcare analytics service, ranked recently approved drugs according to consensus sales forecasts from industry analysts. Here's what investors should know about new products that rose to the top from Immunomedics (NASDAQ:IMMU), Esperion (NASDAQ:ESPR), and Bristol Myers Squibb (NYSE:BMY).
1. Trodelvy from Immunomedics
In April the FDA approved Trodelvy, a new treatment option for patients with triple-negative breast cancer (TBNC), a form of the disease that doesn't respond to the most commonly used targeted therapies. Trodelvy's an antibody linked to a chemotherapy bomb that it doesn't drop until recognizing Trop-2, a protein commonly found on the surface of TNBC tumor cells.
Out of 108 patients treated in a pivotal trial leading to its approval, Trodelvy shrank tumors for 36 patients, three of which achieved complete remission. If you're not an oncologist, this 33.3% response rate might not seem like anything to write home about. It's important to understand that each time a line of treatment fails a cancer patient, their prognosis worsens and a majority of these patients had already progressed after three or more lines of therapy before attempting Trodelvy.
Trodelvy's target frequently appears on tumor cells that originate in other organs, including the pancreas. As a treatment for the underserved TNBC population now and additional populations in the years ahead, sales of the drug are expected to reach $2.3 billion by 2026.
2. Nexletol from Esperion
In March, biotech company Esperion launched its first product, Nexletol, a cholesterol-lowering drug formerly known as bempedoic acid for patients with hereditary hypercholesterolemia and heart problems caused by clogged arteries. This enormous group of patients can usually keep their cholesterol levels in check with cheap generic statins, but there are millions who need something more powerful.
More recently, the company earned approval to market Nexlizet for the same group of patients. This is a combination of bempedoic acid and Zetia, an older drug that limits the amount of cholesterol absorbed from each meal.
As a treatment for millions of people worldwide who can't get their cholesterol under control with statins, annual Nexletol franchise sales are expected to reach $1.8 billion in 2026. Before getting too excited about Esperion, it's important to realize that the market for expensive new non-statin cholesterol treatments is already crowded by injectable drugs such as Praluent and Repatha.
Nexletol's in a long-term outcome study right now that won't read out until 2022. If the results don't make a strong case for Nexletol versus injectable treatments, Esperion could have a tough time meeting any sales expectations.
3. Zeposia from Bristol Myers Squibb
Zeposia is a once-daily capsule for patients with relapsing multiple sclerosis that Bristol Myers Squibb acquired from Celgene. The coronavirus pandemic hasn't helped Bristol Myers Squibb launch Zeposia following its approval this March. During the second quarter, sales reached just $1 million.
Long-term sales forecasts for Zeposia have fallen since the FDA refused to file the first application Celgene submitted in 2018. Despite the delay, annual Zeposia sales are expected to reach $1.6 billion by 2026.
Over the past few years, competition for a limited pool of multiple sclerosis patients has risen sharply. In 2017, the FDA approved a twice-annual infusion from Roche (OTC:RHHBY) called Ocrevus, and sales of this competing MS drug already reached $2.3 billion during the first half of 2020.
Most likely to beat the market?
Meeting consensus sales estimates would help these stocks rise, but Bristol Myers Squibb is already a pharmaceutical behemoth. That means a successful Zeposia launch on its own won't move the entire needle very far.
Esperion's attempt to carve out a niche for Nexletol could turn out to be an uphill struggle the company isn't prepared for. Immunomedics' Trodelvy launch, on the other hand, is moving along at an encouraging pace with $20 million in net sales during the first two months following its launch. If there's a stock here worth investigating further, it's Immunomedics.