Sanofi CEO Paul Hudson has been on the job since September, but he’s already learned how to get Wall Street’s attention.
Back in December, after Hudson boldly announced that he’d set the annual revenue target for the French drugmaker’s immunology blockbuster, Dupixent (dupilumab), at a lofty 10.4 billion euros (about $11 billion), analysts drove up their consensus 2023 forecast for the drug by about 30%.
During the firm’s quarterly earnings call last week, the CEO followed up with more bullish talk of leadership in the biologic space.
“We are already number two in the market in derms, and you think how long Humira has been around, I think we have a realistic expectation to be the leading biologic in the dermatologist’s office,” said Hudson, name-checking AbbVie’s market-leading autoimmune brand.
Such posturing is no surprise, considering Dupixent is the brightest spot in Sanofi’s pipeline. As such, it’s inextricably linked to Hudson’s fortunes as CEO, the key to buying him time as he works to revamp the company. This week he trimmed the executive ranks from 14 down to 10, making good on a promise to reduce bureaucratic layers. The reform push has also included exiting cardio and diabetes research, where pipelines were sluggish, in favor of immunology and oncology.
On the other hand, the boasts are no mere bluster. Dupixent racked up sales of 2.7 billion euros (about $2.9 billion) in 2019, its second full year on the market, and has launched in 34 countries — mainly in adult atopic dermatitis. Some 89 more launches are planned for this year, Hudson said.
That makes it the fastest immunology drug launch to date, according to an analysis from SVBLeerink, which found that the med’s debut has outpaced any of its biggest immunology predecessors: Humira, Novartis’ Cosentyx, Johnson & Johnson’s Stelara, Celgene’s Otezla and Pfizer’s Xeljanz. It’s on pace to more than double the revenue of many of these products in year five of its launch.
The brand began DTC advertising in asthma late last year, after landing that approval in October 2018, and has been airing TV ads for atopic dermatitis, approval for which came in March 2017. Going forward, the company will continue to invest in DTC for both indications “in a continued and expanding fashion” as it focuses on “building [Dupixent] to be a megabrand,” said Bill Sibold, EVP of Sanofi Genzyme, also during the earnings call.
Most analysts who’ve assessed Dupixent’s long-term revenue potential net out below the 10 billion euro projection. (Wall Street’s 2023 consensus is actually 7.3 billion euro, or 13% lower.) Nevertheless, some expressed confidence the target is doable.
SVBLeerink’s Geoffrey Porges issued an investor note this week with the rather breathless headline, “Holy Cow! €10bn in Dupixent IS Achievable w/ Reasonable New Indication Forecast.”
Indeed, only 75,000 patients are on the therapy, or approximately 2.4% of the approved indication, the analyst pointed out, whereas typical penetration of other immunology markets is usually 20% to 25% by year five.
“We see Dupixent beating consensus in the near term with a faster asthma ramp and high treatment persistence in atopic dermatitis despite forthcoming competition,” Porges wrote. “Long term our revised forecast is now 10-15% above consensus with inclusion of risk-adjusted sales for multiple type 2 inflammatory conditions.”
Type 2 inflammation, caused by type 2 helper T cells, is behind a range of atopic, or allergic, disorders such as nasal polyps and prurigo nodularis. It’s one which has so far eluded many of today’s approved autoimmune biologics. Dupixent is the first drug specific for Th2 inflammation and the only approved biologic or disease-modifying med for atopic dermatitis.
About 70% of revenue last year came from that indication. Over the long term, analysts expect that figure to decrease to 55% (about 5 billion euros), with an additional 25% from asthma (about 2 billion euros) and another 20% from future Th2 indications. Hitting the 10 billion euro target hinges on growing in these relatively obscure pipeline areas.
Its ability to treat these additional indications will be revealed over the next two years. Even if Dupixent sees just 10% to 15% market penetration in its first two indications, markets which face greater competition, it could reach, say, 15% to 20% penetration in the more obscure indications where it faces less competition. The largest market penetration of these could come in eosinophilic esophagitis, per SVBLeerink.
Meanwhile, the first of Dupixent’s rivals could be approved next year, both biologic and oral, but dislodging it could prove a tall order. The efficacy of competitive investigational medicines, such as Pfizer’s JAK 1 abrocitinib and Eli Lilly’s JAK 1/2 baricitinib, has generally not matched Dupixent; nor have they equaled its safety profile.
“We estimate Dupixent’s peak sales reach €10-11bn and exceed Sanofi’s target in the late 2020s,” Porges wrote.
For the time being, the drug will continue to draw comparisons to multi-indication biologics like Humira and Amgen’s Enbrel. It’s adding 600 to 700 new atopic-dermatitis patient starts per week, and extending its label. In 2019 the monoclonal antibody, which was developed by Sanofi’s partner Regeneron, picked up its third indication, chronic rhinosinusitis with nasal polyps, another condition marked by Th2 inflammation.
All of which should fuel more boisterous language from the CEO. With regard to the drug’s ongoing roll-out, the news flow around Dupixent will “just get stronger and stronger and stronger,” Hudson said.