Targeting psoriasis, rheumatoid arthritis, and other immune diseases has created some massive markets over the last decade. How massive? The market was sized up at an estimated $72.2 billion in 2010, according to BCC Research -- and growth isn't slowing any time soon. That's good news for patients, too. The pharmaceutical industry's fascination with an improved understanding of biologics has led to dozens of drugs that treat the underlying causes of diseases, rather than small molecules of years past that only treated symptoms.  

Few companies haven't joined the rush to develop biologics and novel small molecule classes to treat immune diseases. While some companies got a big head start over the field, next-generation therapies are being developed in pipelines across the industry. Merck (NYSE:MRK) is one company looking to capitalize on the trend and will shortly begin phase 3 trials on its leading psoriasis biologic therapy candidate. Going by the catchy pipeline name of MK-3222, the drug has huge potential if it ever receives approval from the Food and Drug Administration, or FDA.

About that competition I mentioned...
Older therapies aren't exactly losing their grasp on the markets they took by storm just yet. A quick look at 2012 sales data from the first three biologics approved that work by inhibiting the TNF-alpha protein -- integral to immune system communication -- shows exactly that.



2012 Sales

Johnson & Johnson (NYSE:JNJ)


$6,139 million



$4,236 million



$9,265 million

Source: Company 2012 earnings.       

Aside from the big three, there are newer therapies on the market and in development that target TNF-alpha indirectly by inhibiting the proteins further upstream in the cellular communication chain. For instance, Johnson & Johnson's Stelara binds to interleukin 23 and interleukin 12, which regulate TNF-alpha production. The therapy has been approved for psoriasis and is in late stage trials for Crohn's disease and ankylosing spondylitis.

The biggest advantage for new therapies may lie in dosing schedules. Consider that during a 12-week study comparing Stelara to Enbrel, the TNF-alpha inhibitor was administered twice a week for the length of the study, while the drug candidate was administered just twice over the same period. Stelara still managed to beat Enbrel in high-dose groups with 71% and 49% of patients responding, respectively.   

Is it too late for Merck?
The dosing regimen of Stelara raises the bar significantly for all therapies. However, Merck's MK-3222 has essentially the same requirements; administered twice in the first four weeks of treatment and then once every 12 weeks thereafter. The two therapies work in slightly different ways, too, with MK-3222 targeting a different region of interleukin 23 while sparing interleukin 12. In theory, that could make the drug less destructive to a patient's immune system, which is the biggest drawback to many immune disease therapies.  

Two other biologics mirroring this mechanism of action are in development across big pharma. Johnson & Johnson's CNTO 136 (sirukumab) for rheumatoid arthritis is in phase 3 trials that are expected to be completed in early 2016. Amgen's AMG 139 for Crohn's disease is in a phase 1 trial that will wrap up in September. The good news from a competition standpoint is that each drug is targeting a different immune disease. The distant bad news is that expanding indications for each drug could be met with muted enthusiasm given the established competition that may exist (should each gain approval).      

Nonetheless, MK-3222 will be a first-in-class psoriasis option should it gain approval. It will be interesting to see how, if at all, the therapy improves upon Stelara by sparing interleukin 12. Several safety concerns have been specifically linked to agents that bind to the protein, according to Dr. Kim Papp of Probity Medical Research. Such therapies could potentially be a big step forward for patients and the industry.  

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