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AbbVie (ABBV) announced that the FDA had approved its drug Mavyret treat children and adolescents with hepatitis C. This FDA approval is expected to expand the market opportunities for the drug worldwide. The company first approved Mavyret in 2017 for adults with hepatitis C. This is good news because the drug has generated billions of revenue in 2018. Many issues related to the space relating to hepatitis C still cause risks the label is extended.
The use of Mavyret expanding for children and adolescents with hepatitis C for all genotypes is very good news. Especially when it is the first drug to be approved in children aged 12 to 17 years for this population for all 6 genotypes of the disease. Hepatitis C is caused by the hepatitis C virus (HCV) and is a transmissible virus through the blood. It affects the liver and causes inflammation. There are even cases where it could cause liver cancer and lymphoma.
Mavyret is composed of a combination of glecaprevir and pibrentasvir, which are respectively an NS5A inhibitor and an NS3 / 4a protease inhibitor. The FDA's approval for this extended label was based on two studies. One study enrolled 47 pediatric patients with four HCV genotypes. One thing to emphasize is that they were patients aged 12 to 17 years old. In addition, they should not have cirrhosis or mild cirrhosis to be recruited into the study.
It has been shown that 12% after the end of treatment, no detectable virus in the blood has been detected in the blood of 100% of patients treated with Mavyret for about 8 or 16 weeks. The second study showed that pediatric patients with cirrhosis, having a history of liver or kidney transplant or a genotype five or six of HCV, were able to eliminate the virus from their system. similar to that seen in adults.
It's a good news that AbbVie has managed to develop the Mavyret etiquette. This is because it was necessary, especially when there are still several risks for the HCV program. The first risk is the decline in global sales. It was noted in its report on the results of the first quarter of 2019 that HCV global revenues reached $ 815 million. Globally, HCV revenues decreased by 11.3% on a reporting basis. The only positive point is that US HCV revenues increased by 17.3% to $ 403 million.
The truth is that even though Mavyret has been successful in navigating the HCV market, the situation will continue to worsen. Indeed, Mavyret and other hepatitis C drugs can cure the virus. Over the years, fewer and fewer people will have to be treated for this disease, reducing the market over the years. Why do I think it's likely? To begin, Johnson & Johnson (JNJ) was forced to reduce his HCV program several years agoafter understanding that several competitors had already found a cure for the disease. The second risk is related to competition from other companies in the HVC sector, such as Gilead Sciences (BROWN).
Gilead Sciences is a competitor, however, just like AbbVie, he also feels the pain of a declining market. Gilead's revenue from anti-HCV products was $ 790 million in Q1 2019. The drop was quite dramatic, as at the same time in 2018, HCV revenues were $ 1 billion. of dollars. These two companies will continue to face a contracting market. Gilead even decided to take a more radical step to compete in space and take Abbovie in the lead. Gilead intends to launch authorized generics for Harvoni and Epclusa. The goal is to recapture significant volumes, while remaining competitive on the selling price of Mavyret and other drugs.
The latest FDA approval for AbbVie is expected to help increase sales of Mavyret. The risk remains that the HCV space continues to experience a decline in sales as patients are cured. I think this space will eventually be consolidated to such an extent that minimal incomes can be realized. Many competitors will continue to fight each other. I expect every business in this space to find ways to reduce each other in terms of price.
As proof, I can cite Gilead's action to sell generic drugs for Harvoni and Epclusa. This is despite the fact that the patent for Harvoni expires only in 2030 and that the Epclusa patent only expires in 2032. This attempt to reduce prices between them will probably continue until the market shrinks enough will not even matter anymore. The FDA's extended label is a short-term increase in AbbVie's revenue, which will be good for this year and perhaps the next. The good news is that the company has a strong product portfolio, such as SKYRIZI and updadacitinib, to take over. Mavyret's sales will at least stabilize over the next few years, but I'm not expecting massive growth in the HCV sector. Nevertheless, the FDA's approval to expand the label is at least a big short-term victory.
This article is published by Terry Chrisomalis, who heads the Biotech Analysis Central pharmaceutical service on Seeking Alpha Marketplace. If you like what you read here and want to subscribe to a subscription, I currently offer a free two week trial period to subscribers. My service offers in-depth analysis of many pharmaceutical companies. The market for Biotech Analysis Central SA is $ 49 per month, but for those who sign up for the annual plan, they will enjoy a discount of 399% per year at a price of 33.50%.
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