New Blockbusters Will Offset Generic Price Erosion in Hematology

Oncology Business News®June 2016

Hematological practices can expect a slate of new generics to replace long-established brand drugs going off patent, as well as new blockbuster blood therapies that will significantly improve the treatment of some malignancies.

Hematological practices can expect a slate of new generics to replace long-established brand drugs going off patent, as well as new blockbuster blood therapies that will significantly improve the treatment of some malignancies, according to an analysis of the hematology drug pipeline through 2022 by GBI Research, of Britain.

In addition, lifestyle factors and the aging of the baby boom population in the United States will contribute to a rise in the number of patients requiring hematological care, resulting in a domestic market expansion to $39.3 billion by 2022, up from $18 billion currently, according to the GBI forecast. The US market for hematological drugs is expected to grow at a compound annual rate of 11.8% through 2022, by which time the US market will amount to just about half of the global total, according to GBI.

The rosy outlook on spending and blockbuster drug potential comes at a time when US hematologists are worried that CMS may trim Medicare Part B drug compensation. Because the reduction would bite deeply into the payments hematologists receive for high-cost drugs administered in their offices, The American Society of Hematology is particularly opposed to it. According to GBI, significant drug pricing changes could happen as three leading brand-name targeted therapy drugs lose their patent protection: Rituxan (rituximab), Gleevec (imatinib), and Velcade (bortezomib). Rituximab, approved in the United States for the treatment of non-Hodgkin’s lymphoma (NHL), chronic lymphocytic leukemia, and rheumatoid arthritis, faces patent expiration in September of this year. However, it is a monoclonal antibody (mAb) therapy and its competition would fall into the biosimilar category. Because the barriers to approval and market entry are high for biosimilars in the United States, the price of this therapy is not expected to drop precipitously in the near term, according to GBI.

The tyrosine-kinase inhibitor imatinib, for chronic myelogenous leukemia and other cancers, is already exposed to competition by patent expiration, and bortezomib, a proteasome inhibitor for multiple myeloma and mantle cell lymphoma, will face competition in 2017. Imatinib and bortezomib, being small molecule drugs and relatively easy to reproduce, are likely to face substantial price competition from generics, GBI stated.

Figure 1: Hematological Cancers Therapeutics Market, Global, Annual Revenue for Rituxan ($bn), 2006—2022

Source: GBI Research

So far, manufacturers have not succeeded in developing a biosimilar equivalent that could capture a share of the market from Rituxan. FDA requirements for market introduction of biosimilars have been a factor. Teva Pharmaceuticals, Samsung, and Boehringer Ingelheim Pharmaceuticals each have dropped attempts to reproduce the drug. However, the high revenues earned by rituximab, a Genentech drug, combined with the broad number of therapeutic uses for the drug, make it likely that biosimilar competition will eventually emerge for this product, said Yasser Mushtaq, a senior analyst at GBI. He noted that pharmaceutical company Amgen is an example of a company that continues to work on its own version of rituximab.

Mushtaq expects that competition will lower Rituxan sales to $4 billion by 2022 from the current $7.5 billion mark, “which is not an insignificant sum in comparison to the revenue losses expected for Gleevec and Velcade,” he said. These two drugs will face strong generic price competition, he predicts.

A generic version of imatinib has already been developed by Sun Pharmaceuticals and approved by the FDA. “It’s forecast that the revenue for Gleevec will be almost completely diminished by 2021,” Mushtaq said. A similar picture could develop for Velcade. GBI predicts that Velcade sales will measure $3 billion in 2017, when the drug loses its patent, and will drop to $0.9 billion by 2022.

Two pipeline drugs that promise to revolutionize care and command high prices in the marketplace are KTE-C19, a Kite Pharma chimeric antigen receptor T-cell (CART) therapy for refractory aggressive NHL, and CTL019, a Novartis CART therapy for use in relapsed or refractory NHL. In the realm of aggressive B-cell malignancies, “there are very limited treatment options,” so these therapies may have significant market exclusivity, according to Mushtaq. Kite Pharma’s KTE-C19 could fetch $1.5 billion in revenues by 2022, and the Novartis therapy could generate $1.1 billion in annual revenues by then, GBI estimates.

Another strong candidate for blockbuster status in hematological cancer is the Novartis kinase inhibitor PKC412 (midostaurin) for acute myeloid leukemia (AML). Granted breakthrough therapy designation by the FDA earlier this year, the drug targets the mutation FLT3, which is found in nearly one-third of the AML population, according to Mushtaq. GBI forecasts an $800-million market for midostaurin in 2022. Pembrolizumab (Keytruda), the Merck treatment for advanced melanoma and non—small cell lung cancer, gained fame for its success in the treatment of former President Jimmy Carter. The mAb is also undergoing phase III trials for use in multiple myeloma and refractory multiple myeloma, as well as phase II trials for lymphoma. Consequently, GBI anticipates continous market growth for this therapy.

Other pipeline drugs that are not currently marketed have blockbuster potential, too, according to GBI. These include polatuzumab vedotin, an antibody drug conjugate developed by Genetech/Roche that binds to cells expressing CD79b and allows for the release of a cytotoxic agent. In addition, selinexor, which inhibits proteins in the nucleus of cancer cells, thereby activating tumor suppressors, is a first-in-class drug candidate and shows blockbuster promise, GBI said.

Figure 2: Hematological Cancers Therapeutics Market, Global, Overall Pharmaceutical Industry Pipeline by Therapy Area, 2016

Source: GBI Research

The drug is being developed by Karyopharm Therapeutics. Also, venetoclax (Venclexta), from Genentech and AbbVie, emerged into the field of FDA-approved drugs in April of this year. The formulation for chronic lymphocytic leukemia (CLL) targets a B-cell lymphoma 2 protein that supports cancer growth and is overexpressed in patients with CLL.

All of these therapies are innovative and stand out from others in terms of having unique potential to successfully address disease conditions, Mushtaq said. “Although it’s notable that a number of them are for the relapsed setting, one or two of them are in development for newly diagnosed patients. A common theme is that they are under development for a variety of oncological diseases within cancers, which gives them the potential to reposition. Those factors will offset or dampen the impact of generic erosion over the years.”

Figure 3: US Hematological Cancers Market Size

Source: GBI Research

Hematology practices that are employing breakthrough targeted agents are already steeped in the unique storage and handling requirements for these products, but rapid advances in treatment will require a commensurate investment in time to develop the knowledge and skills to manage these therapies effectively, Mushtaq said. For all of oncology, there are 6,976 therapy candidates currently in development, according to GBI. Of those, 1207 are for hematological cancers, a level of pharmaceutical investment that strongly illustrates the revenue potential that is believed to exist in this category. Other totals include 772 therapy candidates for leukemia, 539 for lymphoma, and 389 for myeloma.

“In terms of new products which will likely be approved, they will follow a similar path of being targeted therapies,” Mushtaq said.

“Hematologists will need to adopt methods to manage and store therapeutics. This is especially the case for cell therapies. There is also an issue of the increasingly targeted therapies and cell therapies not being applicable to all patients.” In addition, “There’s diversity among patients in terms of their genetic background and the makeup of disease. There will therefore be a need to identify and really profile patients before applying these medications.”

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