Can Sanofi and Regeneron’s Dupixent steal half of a $21B eczema market? Not so fast: analyst

Sanofi’s new CEO Paul Hudson turned heads earlier this week with his bold prediction that Dupixent, the company’s eczema drug that’s partnered with Regeneron, would peak at €10 billion ($11 billion) in sales.

His optimism doesn't come out of the blue. The fast-growing drug has already charted €1.395 billion ($1.56 billion) in sales this year, after all.

But competition is brewing—a risk that became all too apparent Tuesday. Just as Hudson was talking up Dupixent at Sanofi’s investor meeting in Cambridge, Massachusetts, rival Dermira announced the FDA had given fast track designation to lebrikizumab, its phase 3 treatment for eczema, also known as atopic dermatitis.

And lebrikizumab is only one of 24 drugs in the pipeline that could threaten Dupixent’s leading market position, analysts at Cantor Fitzgerald said in a recent note to investors. Both drugs block IL-13, but after the FDA fast-tracked Dermira’s contender this week, the analysts underscored the “potential for lebrikizumab to be best in class.”

Dermira made news back in March when it released data from a phase 2b trial showing lebrikizumab performed better on the widely used Eczema Area and Severity Index (EASI) test than Dupixent did in the pivotal trials that led to its approval. Even though lebrikizumab is way behind in this race—top-line results from its phase 3 program aren’t expected till early 2021—Dermira’s stock soared 95% on the better-than-expected phase 2 data.

Leo Pharma is another company seeking to unseat Sanofi and Regeneron in the atopic dermatitis market. Yesterday, the company said its IL-13 blocker tralokinumab met all set endpoints in three late-stage trials, setting the company up to file for approval next year. Leo didn’t release enough details about the results for anyone to determine how the drug stacks up to Dupixent, but the company is expected to pose a competitive threat nonetheless.

Then there’s Pfizer, which is polishing up its eczema drug abrocitinib, a JAK1 inhibitor. In May, Pfizer announced a late-stage study showing the drug had produced clear or nearly clear skin in more patients than did a placebo after 12 weeks. The med also topped placebo at delivering a 75% or better improvement of atopic dermatitis symptoms.

With so many strong contenders in late-stage trials, atopic dermatitis drugs could make up a $21 billion market by 2027, Cantor Fitzgerald predicted.

But Dupixent is in no way guaranteed to keep its hold on the top spot in that market, the analysts warned. The product suffers from “downfalls that do not make Dupixent a ‘perfect’ drug for all AD patients,” the analysts wrote in the note to clients. “Physicians and patients our team has spoken with both raise complaints on its side effect profile and time to onset.”

Side effects have been a persistent concern in the market. Some patients taking Dupixent have developed conjunctivitis, for example, and analysts are nervous about the JAK inhibitors because of cardiovascular side effects seen with drugs in the same class that are approved to treat rheumatoid arthritis.

That said, Cantor Fitzgerald still expects there will be eczema blockbusters in the IL and JAK classes, as well as among drugs that inhibit PDE4, such as Pfizer’s FDA-approved Eucrisa. But overcrowding, coupled with safety questions, will make the marketing challenge that much greater, even for Sanofi and its blockbuster Dupixent.

“The ‘gold rush’ for a piece of the atopic dermatitis (AD) market is well underway,” Cantor Fitzgerald said.

Dec 11, 2019

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