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AbbVie's JAK Inhibitor Rinvoq Receives FDA Approval for RA

Zacks Equity Research

Shares of AbbVie Inc. ABBV rose 2.3% on Aug 16 after its oral JAK inhibitor, upadacitinib, received FDA approval for the treatment of moderate-to-severe rheumatoid arthritis (“RA”) in patients who experience inadequate response or are intolerant to methotrexate. The drug will be marketed with the trade name of Rinvoq. The company is expected to launch the drug later this month.

The company had filed a new drug application (“NDA”) for upadacitinib in December 2018, seeking approval for the aforementioned indication. In February, AbbVie used a priority review voucher and the FDA granted priority review to the NDA, expediting the approval process. Meanwhile, a regulatory application for upadacitinib is under review in Europe for a similar indication.

Meanwhile, shares of AbbVie have declined 30.1% so far this year compared with the industry’s decrease of 2.4%.

Submission of the NDA for upadacitinib was based on encouraging data from the phase III SELECT program, which evaluated more than 4000 patients across five phase III studies on RA. In all studies, upadacitinib met every primary and secondary endpoint.

Data from the studies in the SELECT program showed that treatment with upadacitinib, both as a monotherapy and in combination with conventional synthetic DMARDs, led to improved symptoms of RA, better physical function and inhibited radiographic progression.

Approval to Rinvoq (upadacitinib) is encouraging as the drug may support long-term growth of AbbVie and offset the potential decline in sales of blockbuster RA drug, Humira, following launch of biosimilars, which is scheduled for 2023, in the United States. Biosimilars of Humira have already been launched in Europe, which are severely impacted international sales of the drug. In the EU, several biosimilars have been launched by companies including Amgen AMGN, Biogen BIIB and Novartis’ NVS generic subsidiary — Sandoz.

Humira, which is approved for multiple inflammation indications, generates nearly 60% of the company’s total sales. The drug generated sales of $9.3 billion in the first half of 2019, reflecting a decrease of 5.8% year over year. The decline was the result of a year-over-year fall in sales by almost a third in international markets, partially offset by growth in the United States. The drug generated 75% of the sales in the United States. Launch of biosimilars in the United States will likely lead to a steep fall in sales of the drug.

Notably, AbbVie is developing upadacitinib for multiple indications. Apart from RA, upadacitinib is being evaluated in a mid-stage study for giant cell arteritis and late-stage analyses for Crohn’s disease, psoriatic arthritis, ulcerative colitis and atopic dermatitis. Successful commercialization of Rinvoq in RA and development in additional indications can create a potential Humira replacement.

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AbbVie Inc. Price

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Zacks Rank

AbbVie currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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