Incyte's Jakafi sister med clears FDA for atopic dermatitis, but safety warning a heavy cross to bear

Months into extended FDA reviews that clouded an entire drug class, Incyte has finally snagged a go-ahead for ruxolitinib cream, key for the company’s diversification plan beyond Jakafi. But a less-than-ideal label that tags several serious safety warnings spells trouble for its commercial rollout.

To be sold under the brand name Opzelura, ruxolitinib cream is now cleared to treat mild to moderate atopic dermatitis in patients 12 years or older who aren’t suitable for or have failed other topical prescription drugs, Incyte said Tuesday.

While Opzelura is celebrated as the first topical formulation of a JAK inhibitor to enter the market, its approval comes with a classwide black box warning that has been added to oral JAKs about serious infections, death, cancer, heart-related events and blood clots. Some of the items are theoretical problems for the cream, as they have so far turned up in oral JAK inhibitors, while other issues reflect observations from JAKs for inflammatory conditions.

Incyte had previously expected a relatively clean label for Opzelura despite increased FDA scrutiny on the entire JAK inhibitor class. Jakafi, the oral formulation of ruxolitinib, treats blood cancer and transplant rejection and was spared from the label restrictions the FDA recently added to oral JAKs treating inflammatory diseases.

RELATED: Incyte hits 2nd FDA delay in span of days, this time for atopic dermatitis hopeful ruxolitinib cream

Despite the boxed warnings, Incyte expects Opzelura could reach at least $1.5 billion in peak sales, Todd Edwards, the company’s head of inflammation and autoimmunity business unit, told investors during a call Wednesday. The calculation comes from an estimate that patients will use about three to four tubes of 60-mg Opzelura a year at a per-unit wholesale acquisition cost of $1,950.

Wall Street pegged Opzelura to reach $1.5 billion in sales by 2030, but SVB Leerink analyst Andrew Berens figured the number is too high, putting his estimates at $600 million by 2030.  

For his part, RBC Capital Markets analyst Brian Abrahams marked $550 million for the drug’s peak U.S. sales for atopic dermatitis. In a Tuesday note to clients, he stressed that payer formulary position “will be critical for gauging ultimate revenue potential.” In a survey Abrahams’ team did in February, 36% of 40 dermatologists said they view reimbursement as the biggest hurdle to the use of atopic dermatitis therapies.

Analysts in general are having a hard time pinning a definite answer to how Opzelura might perform. On the one hand, the black box could be a serious blow; RBC’s physician survey showed that a similar warning for Opzelura as the oral JAKs could cut the cream’s adoption by 33%. The RBC team argued the reduction would mostly affect the mild patient population. Before the FDA’s safety review of oral JAKs, Incyte’s own physician survey found 85% of dermatologists indicated they would likely give Opzelura to their patients. A more recent survey by the company suggested dermatologists would reduce use by 15% in the case of a boxed warning.

What’s more, poor commercial performance of other branded topical eczema drugs such as Pfizer’s once blockbuster hopeful Eucrisa doesn’t really offer pharma watchers confidence in Opzelura. Cheap, generic topical corticosteroids are widely used for eczema.

RELATED: JAK inhibitors from Pfizer, AbbVie and Lilly hit with dreaded FDA heart safety, cancer warnings

But on the other hand, physicians expressed enthusiasm for Opzelura given its strong efficacy and lack of topical options. In its two phase 3 TRuE-AD trials, twice-daily Opzelura helped significantly more patients achieve clearer skin and reduce itch compared to nonmedicated cream. After eight weeks of treatment, 53.8% of Opzelura takers in TRuE-AD1 and 51.3% in TRuE-AD2 enjoyed clear or almost clear skins, versus 15.1% and 7.6% for the control patients in the two trials, respectively.

The recent boxed warnings the FDA slapped on the labels of Pfizer’s Xeljanz, AbbVie’s Rinvoq and Eli Lilly’s Olumiant indicate the agency’s cautionary stance on the three oral JAK inhibitors, which came after a large postmarketing study for Xeljanz in rheumatoid arthritis noted safety signals. While the FDA dug into findings from the Xeljanz study, the agency had delayed its decisions on Opzelura as well as atopic dermatitis rulings for Rinvoq, Olumiant and Pfizer’s investigational abrocitinib.

Abrahams, in his February note, suggested the oral JAKs “appeared to have more of a potential role in severe patients who would otherwise receive biologics,” while Opzelura could become “the preferred agent” in moderate disease.

RELATED: Despite JAK 'anxiety,' ICER experts overwhelmingly back Incyte's ruxolitinib cream in atopic dermatitis

Opzelura is broadly viewed as Incyte’s key program to diversify away from Jakafi before the oral med falls off the patent cliff in 2027, Evercore ISI analysts noted in their analysis Tuesday. Jakafi’s revenues of $529 million made up 76% of Incyte’s total haul in the second quarter. Now, with Opzelura’s boxed warnings, Incyte will likely turn to striking deals, the analysts said.

In addition to atopic dermatitis, Opzelura recently hit its goal in two phase 3 trials in vitiligo. For eczema, Opzelura is currently indicated for “short-term and noncontinuous chronic treatment,” but the Evercore ISI team pointed out that vitiligo requires more chronic treatment. During Wednesday’s call, Incyte said the intermittent dosing description is only reflecting the eczema clinical trial design and that it expects a potential vitiligo indication to have its own dosing.