Source: AbbVie.

AbbVie's (ABBV -0.35%) is reporting positive study results from phase 2 trials evaluating its next-generation oral therapy for rheumatoid arthritis and based on those results, the company plans to move ABT-494 into late-stage trials by the end of 2015.

The positive results from this trial and the company's decision to move ABT-494 quickly into phase 3 could mean that it is better positioned to maintain its market share in this indication after Humira's patent expires at the end of 2016.

Protecting its moat
AbbVie's Humira has been the planet's top-selling drug for years and its best-in-class status is due at least in part to its widespread use in the treatment of rheumatoid arthritis, an autoimmune disease that afflicts 1.3 million Americans.

Humira isn't a cure for rheumatoid arthritis, but it does help patients more effectively control the symptoms of this condition. During phase 3 trials, up to 53.4% of patients receiving Humira after failing to improve on DMARDs achieved a 20% or greater improvement in ACR criteria, or ACR20.

Because of Humira's efficacy and the fact that it's a complex biologic, AbbVie charges as much as $60,000 per year for it, depending on patient weight and dosing frequency. As a result, Humira represents the lion's share of AbbVie's total annual sales. In the first quarter, Humira accounted for $3.54 billion of AbbVie's $5.48 billion in sales.

Given Humira's importance to AbbVie, it's not too surprising that it is investing heavily in a new generation of rheumatoid arthritis drugs in an attempt to maintain its market share when Humira's patent protection ends.

Advancing its pipeline
ABT-494 is one of AbbVie's most promising Humira successors. The drug could potentially offer significant benefits to Humira that could allow it to become a top seller if its phase 3 results back up its phase 2 performance.

In its phase 2 Balance II trials, which evaluated patients whose disease wasn't controlled by methotrexate, a common therapy for RA in the DMARD class of drugs, 82% of patients taking a 24 mg dose of ABT-494 once daily achieved ACR20 and 44% of patients achieved ACR50.

In its Balance 1 trial, which evaluated patients that inadequately responded to TNF-inhibitors like Humira, 71% of patients taking 18 mg twice a day achieved ACR20 and 40% achieved ACR50.

Importantly, the safety results from ABT-494's studies were also solid, with the most common adverse event being headache, which occurred in less than 5% of patients. There were two cases of serious infection; however, only one of those two cases occurred in the ABT-494 arm of the study.

Based on the findings, AbbVie plans to kick off a phase 3 study that will further evaluate the efficacy and safety of a once-daily formulation.

Why this drug could be a winner
What makes ABT-494 so intriguing is that it could significantly improve patient dosing and adherence because it's taken orally, rather than injected weekly or every two weeks like Humira.

Also, because ABT-494, a JAK1 inhibitor, has a different mechanism of action than Humira, a TNF inhibitor, its potentially better safety profile could make it a best-in-category choice for doctors given that TNF inhibitors carry a black-box warning of serious infection, including tuberculosis and reported cases of lymphoma. 

If ABT-494 can continue to deliver efficacy that is arguably better than TNF inhibitors with a better safety profile, then it could maintain AbbVie's Humira market share and win away sales from other multibillion-dollar blockbuster TNF inhibitors, too. However, a lot of work needs to be done in phase 3 before investors will know for sure if that's likely and that means that AbbVie investors should remain cautiously optimistic about the phase 2 results until phase 3 data is eventually reported.