Johnson & Johnson (NYSE:JNJ) may offer well-known personal care products such as Listerine and Neutrogena, but it also boasts an impressive portfolio of market leading therapeutic compounds. The health care leader was one of the few to show growth in both worldwide pharmaceutical sales and earnings last year, which grew to $25 billion and $3.86 per share, respectively. It finds itself in an enviable position heading into 2013 as one of the best-positioned companies to tackle the patent cliff head-on.
Optimism abound
Sirukumab, or CNTO 136, showed promising results in a proof-of-concept and dose-finding phase 2 study that wrapped up in late 2011. The drug is being developed with GlaxoSmithKline plc (ADR) (NYSE:GSK) for patients with rheumatoid arthritis who have failed to respond to TNF-alpha inhibiting treatments. Two phase 3 trials were initiated for the monoclonal antibody last August.
By now, it should be widely obvious that treating rheumatoid arthritis and other autoimmune disease by targeting TNF-alpha is the industry standard. Johnson & Johnson’s basket of immunology biologics — Remicade, Stelara, and Simponi — generated sales of $7.7 billion in 2012. AbbVie Inc (NYSE:ABBV)‘s Humira and Amgen, Inc. (NASDAQ:AMGN)‘s Enbrel brought in more than $13.5 billion last year. The three megablockbusters (including Remicade) will continue to dominate even after losing exclusivity in the next several years, but are facing increasing competition from next generation immunology drugs.
That opens up a huge market for drug-hopefuls such as sirukumab, albeit a (currently) smaller chunk of the market consisting of patients that failed other therapies. Remicade and Simponi target TNF-alpha directly, whereas Stelara stops the cytokine’s inflammation-inducing ability by targeting interleukin 12 and interleukin 23. Stelara crushed Enbrel in a head-to-head study for psoriasis in 2010 and is currently being evaluated for other indications.
