Incyte’s closely watched Opzelura cream launch for atopic dermatitis just hit a road bump.
The “unexpected slowdown” happened as the shift from free to paid Opzelura caused a delay in filling those scripts, Incyte’s general manager of North America, Barry Flannelly, said during an investor call Tuesday.
In the second quarter, Opzelura reeled in $16.6 million in net sales, only slightly better than the $12.8 million it got in the first quarter.
To hear Flannelly tell it, the problem is fixed and Incyte expects significant sales contribution from Opzelura starting from the third quarter. In fact, Opzelura just had its biggest week of demand at the end of July, the exec said.
The temporary holdup appeared to be a small price to pay for signing contracts with three of the U.S.’ largest pharmacy benefit managers. As Opzelura gets onto formularies, dermatologists and pharmacists have started moving from Incyte’s free drug program to the regular coverage process, therefore causing a delay, Flannelly explained.
Existing formulary policies require one to two prior therapies before a patient can get Opzelura, Flannelly said. Prior authorizations are a norm in dermatology, and doctors are familiar with navigating the process, he added.
On the bright side, winning reimbursement means more patients will be able to get the drug, which can translate into net sales for Incyte, Flannelly added. Thanks to that, the percentage of Opzelura scripts that are covered have jumped to 54% as of the end of July, versus mid-20% in April.
With fewer free drugs and broader coverage from the three PBM giants, Incyte has made “a key step” toward lowering its pricing pressure. Opzelura’s discount rate has come down to 81% from 86% in the first quarter, Incyte CFO Christiana Stamoulis told investors during the call.
Still, that 81% is far greater than Incyte’s goal of a steady gross-to-net discount rate of between 40% to 50% by the end of 2022.
Incyte believes it’s on track to reach the target based on existing reimbursement contracts it has signed, Flannelly said. As for total sales, he noted that the underlying demand for Opzelura is strong.
Over 10,000 physicians have prescribed the cream, and a Spherix survey cited by Incyte suggests 67% of them were highly satisfied with the product, up from 46% earlier this year, according to Flannelly. Rapid itch reduction, tolerability and the ability to use Opzelura in sensitive body areas remain “key product attributes” that will continue to drive demand, he said.
Meanwhile, just two weeks ago, Opzelura also became the first FDA-approved treatment for repigmentation in vitiligo patients.
Vitiligo is a relatively smaller market compared with atopic dermatitis. Incyte estimates Opzelura’s treatable eczema patient population is about 5 million in the U.S. As for vitiligo, about 150,000 to 200,000 patients are currently seeking treatment. But there are “millions” of patients not on therapy today but who might re-enter treatment because of Opzelura’s approval, Flannelly said.
Flannelly also shrugged off potential competition from Arcutis Biotherapeutics’ Zoryve cream, which nabbed an FDA go-ahead in plaque psoriasis last Friday. Arcutis has priced the PDE4 inhibitor at a wholesale acquisition cost of $825 per 60g tube, more than half of the $1,950 list price for a 60-g tube of Opzelura, a JAK inhibitor.
Zoryve’s clinical data so far in atopic dermatitis “didn’t come near the efficacy and safety” that Opzelura has shown, Flannelly said. Arcutis expects to read out Zoryve’s phase 3 atopic dermatitis trials by year-end.