Olumiant from Lilly, Incyte clears third eczema study, but who will use it?
Months ago Incyte $INCY elected to stop funding the development of Olumiant (baricitinib) — coming up with those funds became partner Eli Lilly’s problem. The JAK inhibitor, which has been dogged by safety concerns, has now cleared another late-stage atopic dermatitis (AD) study.
In June 2018, the FDA approved only the small 2 mg dose of the drug for rheumatoid arthritis, with a black box warning highlighting the therapy’s side effects, including a startling thromboembolism signal, quashing Lilly’s $LLY blockbuster dreams. The agency had initially rejected the drug, demanding a new study, but under the leadership of (now former) FDA commissioner Scott Gottlieb, the FDA had an inexplicable change of heart, and allowed the marketing application to proceed.
The eczema study, BREEZE-AD7, evaluated the impact of adding baricitinib (either 2 mg or 4 mg) to standard-of-care topical corticosteroids in moderate-severe disease patients, versus those who were just given corticosteroids. The addition of baricitinib significantly improved disease severity — meeting the primary endpoint of the study at 16 weeks.
Data from the study showed 30.6% (34/111) AD patients treated with 4 mg baricitinib achieved investigator’s global assessment for atopic dermatitis score of “clear or almost clear” versus 14.7% (16/109) in placebo group at Week 16. The study also met the secondary endpoints measured by Eczema Area and Severity Index 75 (EASI75) and 4-Point improvement on the Itch Number Rating Sale (NRS). This is the third positive AD trial of baricitinib; data from the first two positive trials were disclosed in February.
“(B)ari will likely play a minor role in AD, which may have contributed to Incyte’s prior decision to no longer co-fund the development of the baricitinib program with LLY, resulting in royalties based on global net sales,” SVB Leerink’s Andrew Berens wrote in a note.
Given the dominance of (Regeneron’s) Dupixent in the moderate and severe AD market and known safety risks of infections, malignancies, and thrombosis with oral JAK inhibitors, we believe oral, systemic JAK inhibitors may not capture a meaningful portion of the AD market. While this profile represents limitations of the JAK class for systemic therapy, we believe this could open the door for a greater role for topical JAK usage, which could be prescribed in conjunction with non-JAK systemic treatment.
Incyte, as part of its quarterly results in April, indicated it would instead focus on shepherding its internal pipeline through clinical studies, but continue to receive royalties on global net sales of baricitinib, in accordance with its deal with Lilly. In the first half of 2019, Incyte earned about $35 million in baricitinib royalties.
One of Incyte’s internal assets is its experimental ruxolitinib cream, which is being evaluated for use in atopic dermatitis and vitiligo.
“If topical ruxolitinib can succeed in the two ongoing Phase 3 trials (data expected in 2020), we believe the drug could be used across the spectrum of disease and in conjunction with systemic, non-JAK therapy. Therefore, while the profile of bari and the JAK class suggests limited systemic usage in AD, it could allow greater usage of topical rux in this disease. We assume a 2021 U.S. launch for topical ruxolitinib, with peak revenue of ~$1.1bn,” Berens said.