With its FDA approval for psoriatic arthritis, Celgene's ($CELG) Otezla (apremilast) comes into a market dominated by some of the best-selling drugs in the world, including AbbVie's ($ABBV) top seller Humira and Enbrel from Amgen ($AMGN) and Pfizer ($PFE). But instead of an injection, Celgene's drug is a pill, an advantage the company thinks will help it eventually reach up to $2 billion in sales--a figure analysts feel less certain about.
"Patients and physicians have expressed their desire for a safe and effective therapy for psoriatic arthritis that has the potential to simplify patient management," Scott Smith, who heads Celgene's inflammation unit, said in a statement.
According to ISI Group analyst Mark Schoenebaum, Celgene has tagged the drug with a wholesale price of $22,500, which he says is about a 30% discount to Humira and Enbrel but higher than he expected. That presents a chance for some unexpected upside to its sales numbers.
Analysts' estimates vary widely on what the drug will eventually produce sales-wise, but EvaluatePharma said consensus is about $1.2 billion. To achieve the upper end of the $1.5 billion to $2 billion that Celgene has suggested it will hit, Otezla first needs to get approval for the much more prevalent autoimmune disease psoriasis, which affects about 7.5 million people in the U.S. Celgene is looking for the FDA to rule on its application for that condition in September, Bloomberg reports.
The drug's most prevalent side effects include diarrhea, nausea and headache. But Schoenebaum noted that sales could be affected by two other side effects not previously reported, potential weight loss and depression. The FDA also said Celgene needs to do a postmarketing assessment on its risk to pregnant women.
Sanford Bernstein analyst Geoffrey Porges is among those who have soft projections for Otezla's potential. He has forecast annual sales of $800 million by 2019. "We're cautious about achievability of management's guidance for this product," he said in a note to investors, Reuters reports. "It's a highly competitive category and there are a lot of drugs with greater efficacy."
But Cantor Fitzgerald analyst Mara Goldstein was more upbeat in her assessment. "We think that the psoriatic arthritis market will be a solid fit for Otezla given the dissatisfaction with current drugs," she said in the research note. "We think the drug has a good chance of widespread use."