As AbbVie Inc. continues to report Humira growth and investors continue to worry about biosimilar competition, the Chicago-area pharma offered a surprise when it presented its second quarter earnings: a better-than-expected performance for the hepatitis C franchise, bringing it on par with rival Gilead Sciences Inc..
Overviewing its second quarter financials July 27, AbbVie reported that its HCV franchise, led by Mavyret (glecaprevir/pibrentasvir), yielded global sales of $973m, up more than 100% from second-quarter 2017. During the first quarter, the franchise brought in $919m, 61% higher than consensus estimates of $572m, but the company talked down HCV’s longer-term prospects. ( (Also see «HCV Sales Drive AbbVie’s Great Quarter, But Gains Won’t Last» – Scrip, 26 Apr, 2018.)) Now, AbbVie is still predicting some decline in HCV – both in the US and in Japan – but is also admitting the immediate future for the franchise is hard to predict.
HCV totaled $422m in net sales in the US for the quarter, with ex-US sales reaching $551m – both numbers more than 100% increases year-over-year. Mavyret, the first oral, pan-genotypic eight-week regimen for HCV, generated a significant majority of the franchise’s sales with $932m. ( (Also see «AbbVie’s Mavyret Is First 8-Week Pan-Genotypic Combination For HCV» – Scrip, 3 Aug, 2017.)) Chief Financial Officer William Chase told the investor call that given Mavyret’s momentum, AbbVie is now increasing its projected full-year 2018 HCV sales to more than $3.5bn.
That puts AbbVie largely even with HCV leader Gilead, which projected full-year HCV sales of $3.5bn-$4bn at the start of the year.
“The pace of Mavyret’s uptake continues to exceed expectations, driven by strong market share performance globally as well as higher treatment volumes from warehoused [direct-acting antiviral] failure patients in certain markets,” Chase said.
CEO Rick Gonzalez touted that Mavyret has a “market-leading position in the US” and strong leadership positions in other major markets, including Japan, Germany, Spain and Italy, “based on its compelling clinical profile and our commercial execution.”
AbbVie Rises While Gilead Continues To Fall
Mavyret’s ascendancy occurs in the context of significant HCV revenue slippage by Gilead, once the dominant leader in the space. During its second quarter earnings call on July 25, the Foster City, Calif., firm – which has pivoted focus recently to immuno-oncology and HIV – reported $1bn in sales for its three-product HCV franchise, basically level with the prior quarter’s total of $1.05bn. ( (Also see «As Gilead Seeks New CEO, Second Quarter Shows Stability» – Scrip, 25 Jul, 2018.)) That total still was down substantially from $2.9bn in the second quarter of 2017, and Gilead has been frank during recent quarterly calls that HCV is a declining franchise, both domestically and internationally. ( (Also see «Gilead Admits It Needs M&A To Resume Growth, But Stays Quiet» – Scrip, 8 Feb, 2017.))
Leerink Partners analyst Geoffrey Porges noted July 26 that Gilead’s second-quarter performance, a 4% sequential decline in HCV revenue, was the lowest quarterly decline it had seen in HCV since the fourth quarter of 2016. “Gilead’s management team anticipates a much more gradual and stable decline in HCV sales going forward,” he added.
During its July 27 second quarter earnings call, Merck & Co. Inc. revealed that its two-drug HCV combo Zepatier (elbasvir/grazoprevir) brought in $113m during April, May and June, slightly below consensus expectations of $117m, making the New Jersey pharma a distant third-place player in HCV.
Gonzalez said AbbVie still expects a bit of a step-down in HCV revenues during the quarter, due to market factors in Japan and the US. But, he added, the pharma had expected those factors to impact HCV sales during the second quarter and instead franchise sales grew. AbbVie projects third-quarter HCV revenue of $850m, which would be a 13% decline sequentially.
In Japan, Mavyret is being used to treat patients who failed previous therapy on an all-oral DAAl regimen, a number AbbVie expected to decline during the second quarter. “I can’t tell you that there’s perfect data in Japan on how many of those patients there are, but we had forecasted that that would go down somewhat in the second quarter and will continue to go down in third and fourth quarter,” Gonzalez explained. “It didn’t go down as much as we had assumed in the second quarter. It did go down some, but it didn’t go down as much as we assumed. We are assuming another step function down of those patients in third and fourth quarter.”
In the US, AbbVie had anticipated decreasing patient starts – one of the primary factors in the sharp drop-off in revenue for Gilead’s HCV products – but that hasn’t yet occurred as greatly as projected. “It’s a similar phenomenon as we were seeing patient volumes higher than we would have expected,” the CEO said. “Again, we had projected that they would come down somewhat in second quarter. We didn’t see that come down. We are projecting some reduction in patient volumes in the third and the fourth quarter. We’ll have to see how that plays out, but that’s the basic difference.”
Even if AbbVie begins to see HCV sales fall off beginning this quarter, Morningstar analyst Damien Conover predicts steady and substantial annual revenue for the franchise in the near-term. “We expect AbbVie’s hepatitis C platform to support over $3bn annually for several years based on reaching more patients despite the curative impact of the drug,” the analyst concluded July 27.
Humira Growth Unabated, Imbruvica’s Rise Continues
Overall, AbbVie’s quarter offered more of the consistent drumbeat of Humira (adalimumab) growth, progress with the cancer franchise of Imbruvica (ibrutinib) and Venclexta (venetoclax), and the potential of two Phase III Humira successors, upadacitinib and risankizumab. The pharma also pointed to the recent approval of Orlissa (elagolix) for endometriosis as part of its strategy to manage the impact of direct biosimilar competition to Humira. ( (Also see «AbbVie Prices Oral Endometriosis Drug Orilissa In Value Range, Focusing On Access» – Scrip, 24 Jul, 2018.))
AbbVie posted second quarter global revenue of nearly $8.3bn, up 17.1% over the second quarter of 2017. Humira totaled nearly $5.2bn for the quarter, $3.5bn in the US (up 10%) and $1.7bn internationally (up 4.4%). Imbruvica posted $850m in global sales, a nearly 60% increase, with US sales of $693m, up 31% year-over-year.
Morningstar’s Conover predicted that adalimumab biosimilars will launch this October in Europe and quickly put significant pressure on Humira’s EU sales. “We expect European biosimilars to erode AbbVie’s Humira sales at an annual rate close to the mid-20% rate seen with Remicade[(Johnson & Johnson’s infliximab)] when it faced biosimilar competition in Europe,” he said. “Additionally, we continue to model an at-risk launch of a US Humira biosimilar by late 2020, likely by Pfizer Inc., which has shown a willingness to launch at-risk in the past with its Remicade biosimilar Inflectra launch in 2016.”
On the topic of possible drug pricing policy changes in the US, Gonzalez offered a wide-ranging answer which culminated with him pointing out that while there aren’t many specifics yet on Trump’s blueprint for addressing health care costs, “when we looked at the framework, at least for AbbVie’s business … there were probably more positives than there were negatives based on the kinds of products that we have.”
A Product Manager with expertise in pharma marketing and sales operations