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AbbVie’s plan to replace Humira is ahead of schedule

AbbVie’s plan to replace its top-selling drug Humira with two newer medicines is running ahead of schedule, as fast launches for Skyrizi and Rinvoq led the pharma to increase its combined product revenue forecast for 2020.The drugmaker now expects the two drugs, respectively approved in psoriasis and arthritis, will earn $1.7 billion this year, nearly two-thirds higher than its previous estimate of $1 billion. Skyrizi, in particular, has done well, posting stronger-than-expected sales of $216 million in the three months from October to December.Generic competition to Humira, which last year brought in sales of just over $19 billion, isn’t expected until 2023, giving AbbVie years to grow Skyrizi and Rinvoq into blockbusters in their own right. While popular with investors, AbbVie’s strategy to steadily raise Humira’s price has made the company a frequent target of criticism from lawmakers.

Preparing for a future without Humira was a large part of AbbVie’s reasoning for spending $63 billion to buy Allergan last year. The deal, expected to close this quarter, will substantially bulk up AbbVie’s revenue in the near term, adding billion-dollar businesses in Botox, neuroscience and gastrointestinal drugs.

Strong launches from Skyrizi (risankizumab) and Rinvoq (upadictinib) could make AbbVie’s succession planning that much easier.

Between the two drugs, AbbVie aims to cover all of the ten conditions for which Humira (adalimumab) is currently approved. Psoriasis and arthritis are the first two markets up, and prescription share numbers claimed by AbbVie suggest both Skyrizi and Rinvoq are gaining ground.

According to company CEO Richard Gonzalez, speaking on an earnings call Friday, Skyrizi holds a 25% share of the “in-play” psoriasis market, which covers patients both new to treatment and switching from other drugs. A recent study showing the medicine cleared patient skin better than Novartis’ rival Cosentyx should help further.

Rinvoq, which was approved four months after Skyrizi, currently has a 9% share, Gonzalez said.

Both drugs have benefited from insurance coverage that largely hasn’t required patients to “step” through treatment with older medicines, according to an analysis by the investment bank Bernstein. That’s despite a price that puts the annual cost of both drugs at about $60,000 a year — roughly similar to that of Humira.

Competition, however, is high for both drugs, as drugmakers have brought forward numerous immunology therapies in recent years.

Rinvoq, for example, competes with Pfizer’s Xeljanz, Eli Lilly’s Olumiant and, possibly in the near future, Gilead’s experimental filgotinib, all of which work similarly.

AbbVie estimates that, by 2025, combined sales of Rinvoq and Skyrizi will surpass $10 billion and Gonzalez views Humira’s $20 billion mark as a possibility, although the company hasn’t guided to that.

Initial growth for Skyrizi and Rinvoq will mostly come from higher numbers of prescriptions and broadening uptake in new conditions.

But as AbbVie’s shown with Humira, pricing is likely to play a major role in the drugs’ sales trajectory as well. The company has upped Humira’s list price extensively, taking a 7.4% hike on it this past January.

A report late last year from the Institute for Clinical and Economic Review found Humira’s list price rose by 19% between the end of 2016 and 2018. After rebates and discounts, which drugmakers frequently offer to insurers in return for coverage, the change in Humira’s net price still came in at a hefty 16%, according to ICER.