Stagnant sales for Dermavant's Vtama cast doubt on its blockbuster potential

In the clinic, Dermavant’s nonsteroidal topical treatment Vtama is progressing nicely as recent trial results have paved the way for it to be approved for atopic dermatitis (eczema) on top of its current indication for plaque psoriasis.

In the market, however, Vtama is struggling to catch on, raising questions about its potential to become a “game changer” for patients with autoimmune skin conditions, as it was dubbed by Dermavant CEO Todd Zavodnick upon its approval in May of last year.

When Dermavant’s parent company Roivant reported quarterly revenue on Monday, Vtama sales were at $18.4 million, which was a 10% sequential increase from the previous quarter—hardly the trajectory of a product considered a potential blockbuster.

The figure came up 24% short of analyst consensus of $24 million and prompted Leerink Partners to slash its 2032 Vtama sales projection from $1.4 billion to $407 million.  

“Vtama has struggled to grow despite broader formulary access and direct-to-consumer advertising, likely because physicians and patients are largely comfortable with generic topical steroids and Vtama faces branded competition,” wrote Leerink analysts David Risinger and Bryan Dollinger, Ph.D., in a note to clients.

Leerink has cut its estimate of 2024 (fiscal year) sales from $99 million to $75 million and dropped its 2025 estimate from $201 million to $102 million. The analysts noted that the growth in total prescriptions has been “limited for several months.”

In a conference call on Monday, Roivant CEO Matt Gline admitted that Vtama’s growth is “probably not quite as fast as we would like at this stage, but we are pleased with the reaction from physicians and the reactions from patients.”

Gline added that prescribers have voiced concerns about coverage, especially at larger pharmacies and that the company is working to close a “perception gap.” Roivant also will experiment with “demand-generating tools, Gline said.

Meanwhile, Roivant is counting on Vtama’s approval for atopic dermatitis, which would open the treatment up to a much larger population. Based on promising data from two phase 3 trials that showed immediate and long-term relief from the severe itch condition pruritis, the most prevalent symptom of eczema, the company plans to submit for approval in the indication in the United States and Europe in the first quarter of 2024.

“We still see a significant opportunity for Vtama in atopic dermatitis, particularly since it should be approved in children age 2+ and parents are likely to prefer non-steroids and non-systemic drugs for their children,” Leerink wrote.

Last month, Roivant agreed to a $7.1 billion sale of another of its subsidiaries, Televant, to Roche. Roivant said it expects the deal to become approved in this quarter or the first quarter of next year. Since it owns 75% of Televant, the deal will add $5.2 billion to Roivant’s coffers, providing firepower for M&A.

“We see some really great opportunities,” Gline said. “There’s certainly the possibility for near-term deployment of capital on something like that, but I think you will see us be patient.”