"Go big or go home." That's been pharma's mantra for a while. Or maybe it was "Blockbuster or bust." At any rate, it made a lot of sense. One blockbuster drug can pay for a lot of research and development.

The only problem? They're running out of large therapeutic areas. Besides obesity and a few hard-to-treat cancers, there aren't many diseases with large populations left to be treated. There is, however, one large market that seems ripe for being taken over: anti-inflammatories.

As the name implies, anti-inflammatory drugs fight inflammation. In many diseases -- rheumatoid arthritis and psoriasis, for example -- the immune system overreacts, causing painful inflammation. Anti-inflammatory drugs cut down on the inflammation by ratcheting back the immune system.

The three big anti-inflammatory drugs all attack something called TNF-alpha, a major player in the immune response. Even though the drugs work on the same molecule, they've all been able to become major sellers.



2008 Revenue (in billions)


Abbott Labs (NYSE:ABT)



Johnson & Johnson (NYSE:JNJ) and Schering-Plough (NYSE:SGP)



Wyeth and Amgen (NASDAQ:AMGN)


A market ripe for a takeover
Let's face it, very few people want to be prodded with needles, but there's no other choice with these three drugs: Humira and Enbrel need to be injected, and Remicade is infused, which requires a needle poke and a trip to the doctor. A drug that is injected less often or can be taken orally only needs to be as safe and effective to eventually take over the market.

Johnson & Johnson is making a move with two anti-inflammatory biologic drugs. Simponi also attacks TNF alpha, but it's injected once a month, which is better than the other TNF-alpha inhibitors that are injected two to four times a month. The drug has also been shown to work well in patients that have failed other TNF-alpha drugs, which should be a good selling point for the approximately 20% of patients that fail to respond to the drugs currently available.

The other drug, Stelera, attacks a pair of molecules, IL-12 and IL-23, which play a role in the immune response. The company is waiting for a decision from the FDA, but the data looks good, with Stelera outperforming Enbrel in psoriasis patients.

The Holy Grail
Still, the big game changer could come from oral medications from Pfizer (NYSE:PFE), Rigel Pharmaceuticals (NASDAQ:RIGL), and Celgene (NASDAQ:CELG).

Pfizer's CP-690,550 and Rigel's R788 are both in phase 2 trials for rheumatoid arthritis. They've both shown promise, but they're not without issues. R788 increased blood pressure in a trial completed last year, but whether the side effect is manageable (or even real) should be revealed by results of two larger phase 2 studies that are expected next month. Pfizer's drug is a little farther ahead, having started a phase 3 program in February, but CP-690,550 has safety issues of its own, since the drug increases cholesterol levels.

Celgene's apremilast is in phase 2 trials for psoriasis and psoriatic arthritis, a type of arthritis seen in patients with psoriasis. A phase 2 trial testing apremilast against psoriatic arthritis looked good, but results of additional phase 2 trials will be needed before the drug goes into full phase 3 trials next year.

The market for oral medications may not be limited to the $16.6 billion market that anti-TNF alpha drugs currently hold. Patients usually start on oral drugs like Pfizer's Celebrex and a generic drug called methotrexate and then progress to the injectable drugs. If companies are able to find the Holy Grail -- an effective oral medication with minimal side effects -- they might be able to capture some of those earlier patients as well.

It's going to be a while before any oral medications are on the market, but this is certainly one market that investors should keep their eye on. If they're successful, then companies, patients, and investors will benefit.

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