AbbVie's Humira, used to treat inflammatory conditions such as rheumatoid arthritis, psoriatic arthritis, and ankylosing spondylitis, has been the world's top-selling drug for years. Next year, it will face a patent cliff in the United States, but the drug has had a huge impact on lives and the bottom line of AbbVie.
Now, Eli Lilly (LLY 3.18%) and Bristol Myers Squibb (BMY 0.83%) have blockbuster drugs in the works that could also change lives and boost their companies' fortunes. Let's take a closer at them and what it could mean for these two companies.
Lilly's Mounjaro: Worth the wait
Lilly's Mounjaro (tirzepatide), a once-weekly injection, received its first Food and Drug Administration (FDA) approval in May as a therapy to treat type 2 diabetes, but the therapy also has huge potential as a weight-loss drug. Mounjaro is unique because it is the first unimolecular dual GIP/GLP-1 receptor agonist. That's a mouthful, but what it means is that it can act the way two separate hormones do to control blood sugar levels.
In its first quarter, the drug did $16 million in sales, but analysts say it could be the first therapy to do $25 billion in sales.
In Lilly's Surmount-1 study of 2,539 patients with an average weight of 231 pounds, at higher doses of tirzepatide (10 milligrams and 15 mg), participants lost about 20% of their body weight over 72 weeks and generally the drug improved high blood pressure, trigylcerides, BMI, A1c, and cholesterol levels.
On Oct. 6, the FDA gave Mounjaro fast-track designation as an obesity drug, which means Lilly can do a rolling submission for the label expansion, sending sections of its application piece by piece, rather than waiting for all of the sections to be completed. This will allow the company to potentially bring the therapy to market sooner.
How big an impact would that have for Lilly? Consider that, according to the National Institute of Diabetes and Digestive and Kidney Diseases, nearly 2 in 5 adults are considered obese and about 1 in 11 adults have severe obesity. That's a huge market and the effects of obesity have ripple effects throughout healthcare, with the Centers for Disease Control and Prevention saying that annual medical costs in the U.S. due to obesity were nearly $173 billion in 2019.
Bristol Myers Squibb: Big plans for Opdualag
Nobody is saying Opdualag is a $25 billion therapy, but it has shown strong potential to treat metastatic melanoma, the deadliest type of skin cancer. This year, according to the Melanoma Research Foundation, more than 197,000 people in the U.S. are expected to be diagnosed with melanoma, of which 99,000 will be diagnosed with Stage I, II, III, or IV melanoma. The disease is expected to kill 7,650 people in the U.S. this year.
Opdualag is a combined intravenous solution of Opdivo (nivolumab) and relatlimab, two medications already in Bristol Myers' arsenal. The combination was approved by the FDA on March 18 to treat metastatic melanoma in adults and children after trials found the once-weekly therapy increased the body's T-cell immune response better than each individual antibody.
Like Mounjaro, Opdualag is a unique therapy, the first one approved by the FDA to target the LAG-3 protein on immune cells, basically a new pathway to help the body's response to tumor cells. In the short time since its launch, Opdualag has already produced $64 million in revenue.
It is possible that the therapy may be used to target some of the same conditions that Opdivo is being looked at in phase 3 trials, such as gastric cancer, liver cancer, prostate cancer, urinary tract cancer, and non-small cell lung cancer.
That's just the beginning and it's important to note that by itself, Opdivo brought in $3.9 billion in revenue through six months for Bristol Myers Squibb, so Opdualag could easily top that if proven more effective for a range of cancers.
Two companies with potential blockbusters
Shares of Lilly and Bristol Myers Squibb are both thriving in an otherwise bear market. Lilly's shares are up more than 21% this year while Bristol Myers Squibb is up more than 14%. While the potential of these blockbuster drugs is partially behind that rise, both pharmaceutical companies have strong financials and huge pipelines to back up investors' optimism.
Lilly has 66 clinical trials underway, including 22 phase 3 trials. In the second quarter, The company reported six-month revenue of $14.3 billion, up 6% year over year, and earnings per share (EPS) of $3.16, an increase of 5% over the same period in 2021.
Bristol Myers Squibb has more than 50 compounds to potentially treat more than 40 diseases in its pipeline. Over the past six months, the company reported revenue of $23.5 billion, up 3% year over year, with EPS of $1.25, down from $1.36 in the same period in 2021.