Following the launch of Viekira Pak in January 2015, industry watchers speculated that AbbVie (NYSE:ABBV) may win away significant market share from Gilead Sciences' (NASDAQ:GILD) hepatitis C drug Harvoni. That hasn't happened, but what has happened is that AbbVie's Imbruvica, a therapy used to treat blood cancers, has delivered the equivalent of a knockout blow to Gilead Sciences' cancer drug, Zydelig.
AbbVie and Gilead Sciences are two biotech giants. However, they've taken different paths to get there.
AbbVie's success has come on the heels of Humira, an anti-TNF biologic that is used to treat various autoimmune diseases, while Gilead Sciences success has been built on the back of a slate of top-selling HIV drugs.
Although the two companies' success has come from treating very different indications, both share the honor of marketing drugs that are among the planet's best sellers. AbbVie's Humira raked in more than $14 billion in revenue last year, while Gilead Sciences' HIV drugs generate more than $10 billion in combined sales annually.
Gilead Sciences also has the distinction of marketing Harvoni and Sovaldi, two hepatitis C drugs that hauled in a combined $19.2 billion in revenue in 2015.
Because revenue at both of these companies is highly concentrated within their respective markets, each company has been investing billions of dollars to expand into other indications, and that expansion has led AbbVie to attempt to dethrone Gilead Sciences in hepatitis C and both companies to square off against each other in cancer.
A tie score
So far, Gilead Sciences is the undeniable winner in hepatitis C and AbbVie's the unmistakable winner in cancer.
Despite launching Viekira Pak to widespread support from payers eager to see competition lower their hepatitis C treatment costs, Viekira Pak hasn't made nearly the dent in the indication as management initially predicted.
Yes, Viekira Pak sales were a healthy $1.64 billion last year, but AbbVie's C-suite had forecast a $3 billion run rate exiting 2015, and annualized fourth-quarter sales came in at roughly $2 billion instead.
Importantly, Viekira Pak seems to have done little to slow Harvoni's momentum. In the fourth quarter of 2014, its first quarter on the market, Harvoni's sales totaled $2.1 billion. However, Harvoni's sales grew to $13.9 billion in 2015, including $3.35 billion in the fourth quarter.
Cleary, AbbVie is losing to Gilead in hepatitis C. However, AbbVie's Imbruvica is decisively beating Gilead Sciences' Zydelig in cancer.
Even though Imbruvica and Zydelig launched within months of each other as treatments for relapsing chronic lymphocytic leukemia (CLL) in 2014, Imbruvica has stolen the show in the indication.
Both drugs demonstrated efficacy in clinical-stage trials, but severe adverse effects, including liver toxicity, in Zydelig's studies led to a black-box warning on its label and the FDA's mandating of a risk-management strategy to educate doctors and patients on its risks. The FDA didn't include a black-box warning, nor did it mandate a risk-management strategy, for Imbruvica.
Given Imbruvica's apparent safety advantage, it's not surprising that it's become the best-in-class option of the two drugs. Imbruvica has an annualized sales run rate in excess of $1.2 billion exiting 2015, while Zydelig sales are tracking at an annualized clip of only $160 million.
AbbVie has next-generation hepatitis C treatments in the works that it hopes can mount a more significant challenge to Gilead Sciences in the future, but for now, Gilead Sciences remains entrenched as the market share leader.
The shuttering of its Zydelig trials makes Gilead Sciences' plans in cancer uncertain, and Imbruvica won approval for use in newly diagnosed CLL patients earlier this month, which significantly broadens its addressable market. As a result, it appears it may be game, set, and match in favor of AbbVie in this battle.