First Steps 2013
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The newborn AbbVie came into being at the beginning of 2013, bringing with it the world’s best-selling prescription product and the rest of the legacy Abbott Labs biopharmaceuticals portfolio.
The legacy Abbott Laboratories had two major goals in 2012, one usual and one unusual. While attempting to deliver on financial performance expectations like any big pharma company, Abbott’s leadership at the same time was preparing for a split into two new companies: one comprising the legacy company’s research-based biopharmaceuticals business (AbbVie)and the other consisting of diagnostics, medical devices, nutritionals, and branded generic pharmaceuticals (Abbott). After more than a year of preparation, the split came to pass at the beginning of January 2013. Richard A. Gonzalez, formerly head of
Abbott’s global pharmaceutical business, took over as chairman of the board and CEO of AbbVie. Miles D. White, formerly chairman of the board and CEO of legacy Abbott, remained as chairman and CEO of the new Abbott.“AbbVie will build on a 125-year legacy of success by leveraging a broad product portfolio that includes a mix of differentiated growth brands and sustainable performers,” Gonzalez says. “It has a strong global footprint and a new-product pipeline that includes a unique mix of biologics and small molecules. And it has an experienced management team with a track record of outstanding commercial execution.”In its final year of existence, the legacy Abbott Laboratories earned $39.87 billion in 2012 sales, a 2.6 percent improvement over the previous year. Net income was up 26.1 percent to $5.96 billion, while earnings per share rose 71 cents to $3.72. In the first two quarters of its existence, the newborn AbbVie generated sales of $9.02 billion, up 4.1 percent compared with the same portfolio of products and business in the first half of 2012. By the same measurement, net earnings fell 5.3 percent to $2.04 billion and earnings per share dropped nine cents to $1.27. Company leaders are projecting earnings per share for full-year 2013 to be between $2.66 and $2.72.
AbbVie Launch
The leaders of AbbVie celebrated the new company’s launch in style on Jan. 2, ringing the first opening bell of the new year at the New York Stock Exchange alongside patients and company employees from more than 40 countries.
“Today AbbVie launches with an outstanding portfolio, a solid pipeline, and enthusiastic people who will serve patients and deliver growth,” noted Mr. Gonzalez to mark the occasion. “With those assets and a relentless focus on innovation we intend to create significant value for our shareholders.”The launch represented the conclusion of a plan that was initially announced during October 2011 to separate the legacy Abbott Laboratories into two companies. The new AbbVie took over the research-based specialty biopharmaceuticals portion of Abbott, with a broad portfolio of medicines including leadership in immunology and virology as well as a pipeline of breakthrough therapies. The new Abbott retained the old company’s offerings in diagnostics, medical devices, nutritionals, and branded generic pharmaceuticals.
Product Performance
The autoimmune drug Humira had a very busy – and very successful – 2012 for AbbVie. Now more than ever the company’s flagship product, it rolled up $9.27 billion in sales for legacy Abbott in 2012, an improvement of 16.8 percent, and another $4.85 billion for AbbVie in the first half of 2013, 13.9 percent better than the first six months of 2012. Humira now represents slightly more than half of the new company’s total revenue. Additionally, in 2012 Humira became the first product not named Lipitor to lead the world in prescription drug sales since 2000.
This strong performance was helped along by plenty of positive regulatory news. During July 2012, Humira was cleared for marketing in Europe for the treatment of adults with severe axial spondyloarthritis (axSpA) who have no X-ray evidence of structural damage, becoming the first approved medication available for non-radiographic axSpA patients. During August 2012, the European Commission approved Humira for the treatment of moderately active Crohn’s disease in adult patients who have had an inadequate response to conventional therapy. During September 2012, U.S. regulators approved Humira for inducing and sustaining clinical remission in adult patients with moderately to severely active ulcerative colitis when certain other medicines have not worked well enough. Additionally, during November the product was approved by health authorities in Europe for the treatment of pediatric patients aged 6 years to 17 years old with severe active Crohn’s disease who failed, are intolerant to, or have contraindications to conventional therapy. By the end of 2012, Humira had been granted therapeutic indications for the treatment of nine different autoimmune disorders around the world.
The testosterone replacement therapy AndroGel crossed the billion-dollar boundary for the first time in 2012, with sales increasing 31.8 percent to $1.15 billion. The product’s sales fell off slightly in the first half of 2013, down 2 percent to $498 million. According to AbbVie, AndroGel is the leading testosterone replacement therapy in the United States.
The rest of AbbVie’s product portfolio was mostly stagnant in 2012, with several products dropping off significantly. Sales of the cholesterol drug family Trilipix/TriCor fell 20 percent to $1.1 billion for the year.
With loss of exclusivity in the fourth quarter of 2012, the descent has accelerated; Trilipix/TriCor sales decreases 58.4 percent to $235 million in the first half of 2013. Sales for the HIV product Kaletra dropped 13.4 percent to $1.01 billion in 2012; the product’s sales rose 0.2 percent in the first half of 2013 to $497 million. Sales of Niaspan, an extended-release niacin product for dyslipidemia, fell 6.7 percent to $911 million during 2012; in the first half of the next year, sales bounced back by 4 percent to $418 million. Lupron sales declined 1.2 percent to $800 million in 2012, and decreased 5 percent to $380 million in the first half of 2013. The product is used for the palliative treatment of advanced prostate cancer, the treatment of endometriosis and central precocious puberty, and for the preoperative treatment of patients with anemia caused by uterine fibroids. The hypothyroidism product Synthroid has shown signs of growth, though, with sales up 5.6 percent in 2012 to $551 million. Synthroid sales improved 7.9 percent to $272 million in the first half of 2013. According to Abbott executives, Synthroid is the No. 1 prescribed brand for thyroid disease.
Partnerships
In May, AbbVie and Alvine Pharmaceuticals launched a global collaboration to develop a novel oral treatment for patients with celiac disease, currently in Phase II development. ALV003 is an investigational oral therapy composed of two recombinant, gluten specific enzymes (a cysteine protease (E-B2) and a prolyl endopeptidase (PEP), that degrade gluten in vitro and in human clinical testing, and may reduce the symptoms and intestinal injury associated with celiac disease in patients attempting to adhere to a gluten-free diet. Data from a Phase IIa study reported at Digestive Disease Week (DDW) 2012, showed reduction of intestinal inflammation in patients exposed to gluten and treated with ALV003 compared to patients treated with placebo.
“Celiac disease is an area with significant unmet medical need,” says Scott Brun, M.D., VP of pharmaceutical development, AbbVie. “Patients who currently are unable to completely avoid gluten in their diets could potentially benefit from this promising investigational treatment. AbbVie has significant experience within immunology and gastroenterology and the exclusive option to acquire this asset complements AbbVie’s broad midstage pipeline.”
Under the terms of the agreement, AbbVie will make an initial upfront payment of $70 million for an exclusive option to either acquire the assets relating to ALV003, or the equity of the company. Alvine will maintain responsibility for Phase II clinical development, and upon successful completion of the approximately 500-patient Phase IIb study, AbbVie may exercise its option for the agreed-upon additional consideration. Alvine will also be entitled to receive a milestone payment upon AbbVie’s initiation of Phase III development. In collaboration with AbbVie Biotech Ventures Inc., a subsidiary of AbbVie dedicated to making early investments in emerging biotech and pharmaceutical companies, AbbVie was an early investor in Alvine.
Also in May, Galapagos NV and AbbVie announced an extension of their GLPG0634 clinical-development collaboration to include Crohn’s disease. Galapagos will fund and complete a Phase II program in Crohn’s disease, which is designed to facilitate rapid progression into Phase III. Upon successful completion of the study, expected in the second quarter of 2015, AbbVie will pay Galapagos $50 million. AbbVie is responsible for funding and performing clinical development beyond Phase II, and completing regulatory and commercialization activities.
Galapagos will start an innovative 20-week, Phase IIa/b study with GLPG0634 in 180 patients suffering from Crohn’s disease by early 2014. The study will measure both induction of disease remission and early maintenance of its beneficial effects in Crohn’s disease, and is expected to read out topline results in the second quarter of 2015. This Phase II study in Crohn’s disease will be performed in parallel with the Phase IIb study in rheumatoid arthritis.
Crohn’s disease is a serious chronic, inflammatory autoimmune disease of the gastrointestinal tract that affects millions of people worldwide, including more than 1 million Europeans and more than 500,000 individuals in the United States. The Janus kinases (JAK) are a family of enzymes that play a key role in the signaling mechanism used by a number of cytokines that are involved in autoimmune diseases. JAK inhibitors, with their immune-modulating effects, have the potential to become an effective treatment option for this disease. By inhibiting JAK1, GLPG0634 blocks signaling for several key pro-inflammatory cytokines such as interleukin 6 (IL-6). Its selective JAK1 inhibition profile avoids inhibition of JAK2, which offers a unique advantage in Crohn’s disease. Inhibition of JAK2 has shown anemia and reduced formation of blood cells in clinical studies with other JAK inhibitors, which is a particular concern in patients with inflammatory bowel disease, as blood loss through gastrointestinal bleeding often already causes anemia in these patients. Therefore, GLPG0634 may potentially support a better safety profile than other JAK inhibitors.
“AbbVie supports the start of this innovative study in Crohn’s disease with GLPG0634,” Dr. Brun says. “Our experience within gastroenterology, combined with a novel alternative treatment for this disease may provide a greater benefit to patients in the future.”
Research And Development
In its last year of existence the legacy Abbott Laboratories spent $4.32 billion on R&D, 4.7 percent more than the previous year. During first-half 2013, AbbVie spent $1.34 billion on R&D, a 4.6 percent increase compared with the same portfolio of investigational compounds in the first half of 2012.
In November 2012 Abbott released details for the company’s Phase III hepatitis C registrational program following promising results from the Phase IIb clinical trial known as Aviator. The Phase III clinical trials are designed to evaluate safety and efficacy of a 12-week regimen of three direct acting antivirals (DAA), with and without ribavirin, for the treatment of HCV in genotype 1 (GT1) non-cirrhotic, treatment-naïve, and treatment-experienced patients. An additional Phase III trial will study triple-DAAs, with ribavirin, in patients with cirrhosis for 12 or 24 weeks.
The Phase III program will include more than 2,000 patients with HCV genotype 1, with trial sites in 29 countries. The DAAs in the studies include ABT-450/r (protease inhibitor and ritonavir), ABT-267 (NS5A inhibitor), and ABT-333 (non-nucleoside polymerase inhibitor). Treatment duration will be 12 weeks in non-cirrhotic patients, and 12 or 24 weeks in cirrhotic patients. All patients will be followed for 48 weeks post-treatment. Co-formulated tablets of ABT-450/r and ABT-267 will be used in the Phase III trials. Topline intent-to-treat results from the 12-week, triple-DAA regimens with ribavirin found that 97.5 percent (77 of 79) of treatment-naïve GT1 patients and 93.3 percent (42 of 45) in GT1 null responder patients achieved SVR12.
“Abbott is committed to investigating a short-course HCV therapy without the use of interferon to achieve high SVR rates,” Dr. Brun says. “Our trial enrollment strives to reflect a broad range of populations, including those that have been difficult to treat. We have been very encouraged by the data from the Phase II studies, and look forward to confirming the findings in our Phase III program.”
In May, AbbVie’s DAA combination was designated as a breakthrough therapy by FDA. This designation is intended to expedite the development and review of drugs for serious or life-threatening conditions. The criteria for breakthrough therapy designation includes preliminary clinical evidence demonstrating a drug may have substantial improvement on at least one clinically significant endpoint compared to available therapy. A breakthrough therapy designation conveys all of the fast-track program features, as well as more intensive FDA guidance on an efficient drug-development program.
“AbbVie is pleased that the FDA has granted breakthrough therapy designation to our 3-DAA combination with and without ribavirin,” says John M. Leonard, M.D., senior VP and chief scientific officer of AbbVie. “We feel it reflects the potential of this regimen to be important in the treatment of HCV. Our HCV program is one part of our advancing pipeline which is focused on delivering innovative therapies to address pressing areas of unmet clinical need.”
Also in May, AbbVie announced the initiation of a Phase III clinical study called SONAR (Study Of Diabetic Nephropathy with Atrasentan) to assess the effects of the investigational compound atrasentan when added to standard of care on progression of kidney disease in patients with stage 2 to 4 chronic kidney disease and type 2 diabetes. SONAR is a large, multinational, double-blind, placebo-controlled clinical study that is expected to enroll more than 4,000 patients with diabetic nephropathy. The study will evaluate atrasentan’s impact on renal outcomes, such as the onset of end-stage renal disease (ESRD), as defined by need for chronic dialysis, transplant or death due to renal failure progression.
Diabetic nephropathy, or diabetic kidney disease, is a common complication of diabetes and the leading cause of chronic kidney disease in the developed world. In the United States, about 40 percent of patients with diabetes develop diabetic nephropathy.
Albuminuria – protein in the urine, as measured by urine albumin-to-creatinine ratio – is the main sign of diabetic nephropathy. As kidney function decreases, the level of protein in the urine rises, leading to further damage to the kidney. Research has suggested that endothelin receptors play a role in this process and drugs that target this receptor system, such as atrasentan, may have the potential to delay progression of chronic kidney disease.
“We are committed to improving renal outcomes for patients with type 2 diabetes, where there is significant unmet need,” says James Stolzenbach, Ph.D., divisional VP, dyslipidemia and renal, AbbVie. “If validated in Phase III, atrasentan has the potential to provide a novel treatment option for type 2 diabetic kidney disease patients worldwide.”
Before the launch of SONAR, Phase IIb studies of atrasentan were conducted to evaluate the compound’s efficacy and safety in lowering albuminuria in subjects with type 2 diabetes and nephropathy receiving maximum tolerated labeled doses of angiotensin converting enzyme inhibitors or angiotensin II receptor blockers. Two parallel, double-blind, placebo-controlled, multinational studies were conducted; one in Japan with 58 patients and a second in the United States, Canada, and Taiwan with 153 patients. Findings from the 12-week studies of two doses of atrasentan versus placebo showed sustained reductions in urine albumin-to-creatinine ratio, the studies’ primary endpoint.
AbbVie has a number of other compounds in late-stage development as well. Elagolix, a compound being developed for endometriosis in partnership with Neurocrine Biosciences, began Phase III trials in June 2012. That same month, results were announced from a long-term safety and tolerability trial of LCIG for advanced Parkinson’s disease. This compound has been approved in more than 40 countries but remains under investigation in the United States in several Phase III trials. Daclizumab, developed in partnership with Biogen Idec, remains in Phase III trials for relapsing-remitting multiple sclerosis after reporting positive Phase IIb results in October 2011. Elotuzumab, being developed with Bristol-Myers Squibb, moved into Phase III trials for multiple myeloma after reporting Phase II data in December 2012.
Product Sales And Financial Information
| PRODUCT | 2012 SALES | 2011 SALES |
|---|---|---|
| Humira | $9,265 | $7,932 |
| AndroGel | $1,152 | $874 |
| TriCor/ | $1,098 | $1,372 |
| Trilipix | ||
| Kaletra | $1,013 | $1,170 |
| Niaspan | $911 | $976 |
| Synagis | $842 | $792 |
| Lupron | $800 | $810 |
| Ultane, | $602 | $665 |
| Sevorane | ||
| Synthroid | $551 | $522 |
All sales are in millions of dollars.
| 2012 | 2011 | |
|---|---|---|
| Revenue | $39,874 | $38,851 |
| Net income | $5,963 | $4,728 |
| Diluted EPS | $3.72 | $3.01 |
| R&D | $4,322 | $4,129 |
| 1H13 | 1H12 | |
|---|---|---|
| Revenue | $9,021 | $8,666 |
| Net income | $2,036 | $2,150 |
| Diluted EPS | $1.27 | $1.36 |
| R&D | $1,343 | $1,284 |
Full-year 2012 and 2011 numbers are for legacy Abbott Laboratories. All figures are in millions of dollars except EPS.
