AbbVie Wants to Replace Humira With... Llamas?

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Anti-inflammatory drugs have been extremely successful in the last decade. In fact, the top three best-selling drugs in 2012 -- Humira, Remicade, and Enbrel -- were anti-TNF inhibitors used against a wide array of autoimmune diseases. It's tough to complain about a combined $25.4 billion in sales over a 12-month period, but next-generation drugs and generic competition will eventually (and slowly) erode market share for the leading therapies.  

The company under the most pressure is AbbVie , which wields the only drug expected to generate revenue of $10 billion in 2013: Humira. It isn't the company's fault that Humira is so successful, but it does represent over half of total sales. Luckily, management is taking a proactive approach and committed to deals worth up to a combined $1.25 billion, with promising pipeline candidates this week alone. The larger deal -- worth up to $840 million -- is focused on a novel therapeutic developed from a llama antibody.

Source: Wikimedia Commons.

Yes, that kind of llama.

Llamas, camels, and deals, oh my!
The partnership is with a company named Ablynx, which has developed a portfolio of "Nanobody" therapeutics based on simplified proteins found circulating in the immune system of llamas, camels, and alpacas. Nanobodies are tiny biologic drugs that are 10% of the size of current antibodies -- a huge advantage associated with less toxicity and higher affinity for targets. That should also translate into advantages in manufacturing and biologic assembly.

Ablynx's nanobody platform has also attracted Merck, Merck Serono, Boehringer Ingelheim, and Novartis , although AbbVie is the first to take the plunge into clinical trials. The others are all evaluating nanobodies in preclinical trials for various indications relating to their respective specialty areas. Of course, if any company knows about marketing a successful autoimmune drug it would be AbbVie.

AbbVie is also banking that nanobodies will be able to use their small size to penetrate deeper into cell tissue, thus increasing effectiveness. A recently completed phase 2a trial evaluating the molecule at the heart of the deal -- ALX-0061 -- in treating rheumatoid arthritis seems to support that hypothesis. The drug performed better than methotrexate -- the standard of care every new anti-inflammatory drug must beat -- in effectiveness and safety. The reason why lies in the biochemical target, which is becoming increasingly more popular for biotech companies.

Importance of next-generation targets
A previously completed in vitro trial compared ALX-0061 to Actemra (tocilizumab) from Roche . Why? Both target the same immune system-regulating protein called interleukin 6, or IL-6R. The study demonstrated that ALX-0061 was more effective at binding to IL-6R and more potent than Actemra, which could result in a different safety profile and a superior benefit to risk profile. Oh, yeah, Actemra captured more than $1 billion in sales last year and could hit $7.4 billion at its peak, according to SG Cross Asset Research.

The advantages of nanobodies had better prove themselves in the upcoming phase 2b trial because the competition is heating up. Regeneron has demonstrated impressive results for its own IL-6R product candidate, sarilumab, in treating rheumatoid arthritis. Assuming it continues its success in late-stage trials, analysts believe peak sales could zoom to $3.1 billion. In addition to sarilumab, Regeneron is developing dupilumab in various trials. The molecule targets interleukin 4 and interleukin 13 to treat multiple inflammatory diseases. 

Can targeting interleukin beat the best?
Novartis and Roche may have started the interleukin craze with an arms race of their own in 1997. Each company was developing a drug to reduce the risk of organ rejection during organ transplants by targeting interleukin 2. Roche's Zenapax beat Simulect from Novartis to the market by a few months, but both eventually became blockbusters and were responsible for keeping the funds flowing to antibody research.

Still not convinced? Johnson & Johnson has already proven that TNF-alpha drugs may be on their way to smaller market share thanks to next-generation therapies. Stelara, which is approved for treating multiple autoimmune diseases, targets interleukin 12 and 13. The drug is administered much less frequently than its predecessors and can treat more patients. It may be different than what AbbVie hopes to do with ALX-0061, but it recorded sales of $717 million through the first six months of the year. Peak sales estimates think $3.8 billion per year is within reach, again according to SG Cross Asset Research.

Foolish bottom line
Don't worry. You'll never have to draw a diagram of the IL-6R pathway. Just know that developing drugs that target the various interleukin produced by the body's immune system can be a very profitable and successful endeavor. Think of it as the natural progression in biological targets -- from TNF-alpha inhibitors to interleukin inhibitors. If ALX-0061 works as well as many suspect it will, then AbbVie investors have little to worry about when patents expire for Humira.

Looking for more disruptive biotechs?
The best way to play the biotech space is to find companies that shun the status quo and instead discover revolutionary, groundbreaking technologies. While using llamas to produce antibodies certainly fits the bill, it is just one example. In the Motley Fool's brand-new FREE report "2 Game-Changing Biotechs Revolutionizing the Way We Treat Cancer," find out about a new technology that big pharma is endorsing through partnerships, and the two companies that are set to profit from this emerging drug class. Click here to get your copy today.

The article AbbVie Wants to Replace Humira With... Llamas? originally appeared on

Fool contributor Maxx Chatskohas no position in any stocks mentioned.  Check out his  personal portfolio , his CAPS page , or follow him on Twitter  @BlacknGoldFool   to keep up with  his writing   on biopharmaceuticals, industrial biotech, and the bioeconomy. The Motley Fool recommends and owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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