It's a banner day for Pfizer ($PFE): The drugmaker's new rheumatoid arthritis drug tofacitinib, one of its leading hopes for sales growth, finally won its approval from the FDA. Now dubbed Xeljanz, the oral treatment carries a list price of $2,055 per 30-day supply, or about $24,000 per year. And it's expected to eventually hit $3 billion in sales.
That's a long way from the $12 billion Lipitor yielded in 2010, its last full year without generic competition. But it's almost as much as Pfizer garnered from its second-best selling product last year, Lyrica, which brought in $3.7 billion.
Xeljanz is an entirely new type of RA drug--a Janus kinase inhibitor. It's approved for patients who can't tolerate treatment with the standard pill, methotrexate, or haven't fully responded to it. The drug comes with some heavy-duty warnings about infection risks, but so do its high-powered rivals. Besides the boxed warning on Xeljanz's label, FDA is requiring Pfizer to conduct a post-marketing study to gauge the drug's risks of heart disease, cancer and serious infections. The study will look at two different doses, the 5 mg dose FDA approved and the 10 mg dose it didn't.
Now that FDA has given its blessing, Xeljanz will enter a huge market; as Reuters points out, RA treatments account for about $20 billion in sales annually. But the Pfizer drug also has competition, in the form of widely used TNF-alpha inhibitors such as Remicade, from Johnson & Johnson ($JNJ), and Enbrel, which Pfizer has been co-marketing with Amgen ($AMGN) under a deal set to expire next year.
But the big question now is whether Xeljanz will take a bite out of the Big Kahuna of TNF-alpha drugs--Humira. The Abbott Laboratories ($ABT) therapy, soon to be spun off with the company's AbbVie pharma division, is fast becoming the best-selling drug in the world, with more than $8 billion in 2011 revenues. AbbVie is counting on it to continue growing. In fact, AbbVie's near-term success pretty much depends on it. And the company has invested heavily in developing new indications, including a recently approved use in ulcerative colitis.
But Humira is, of course, an injectable drug. And its price is roughly the same as Xeljanz, at around $2,000 per month. Pfizer is betting that Xeljanz will gain an edge from its convenient pill form as well as its novel mechanism of action. Some analysts agree. Sanford Bernstein's Tim Anderson doesn't see patients switching to Xeljanz from injectables if the latter are working, but new patients "might prefer an oral therapy versus one that requires needle-based delivery."
Bernstein has pegged Xeljanz's peak sales at $2.5 billion, Reuters says. But he also figures that sales could easily top that if Xeljanz wins approvals for other inflammatory diseases, such as psoriasis, Crohn's disease and ulcerative colitis, a la Humira.
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