Pfizer's ulcerative colitis drug could generate $1.9 billion in sales by 2030

Pfizer Inc.'s PFE, promising ulcerative colitis treatment, could generate $1.9 billion in sales by 2030 if it is approved by U.S. regulators next year.

David Risinger, SVB Securities analyst, told investors he remains bullish on the drug.

Pfizer acquired etrasimod through its $6.7 billion acquisition of Arena Pharmaceuticals Inc., which closed in March. The data from two pivotal late-stage clinical trials that Pfizer shared earlier this week makes the case for the deal.

One study found that patients taking etrasimod reported a clinical remission of 32.1% compared with 6.7% taking placebo after 52 weeks. After 12 weeks, a second study reported clinical remission of 24.8% for patients taking etrasimod compared with 15.2% for placebo.

According to a FactSet transcript, these Phase 3 results support the positioning of etrasimod as the first-in line oral therapy after conventional treatments fail, Mike Gladstone, Pfizer's global president of inflammation and immunology, said Thursday at Digestive Disease Week.

The experimental treatment is part of a wave of new ulcerative colitis treatments that aim to treat an inflammatory bowel disease that is estimated to affect about 1 million people in the U.S.

According to the Crohn's Colitis Foundation, up to 40% of patients do not respond to biologic treatments like AbbVie's ABBV, Humira or Johnson Johnson's JNJ, Simponi. On a long-term basis, about 30% of ulcerative colitis patients don't respond to biologics.

The foundation's president and CEO, Michael Osso, said in a statement that there is a need for therapies for patients whose disease does not respond to current treatments. There is a need for drugs that not only help decrease disease symptoms, but also modify the course of inflammatory bowel disease in order to induce sustained remission. This new group of treatments includes Bristol Myers Squibb Co.'s BMY, Zeposia, approved by the Food and Drug Administration as an ulcerative colitis treatment a year ago. The drug was approved for multiple sclerosis patients in 2020.

According to a FactSet consensus, it is expected to bring in $619 million in revenue this year and $1.8 billion in 2026.

The wholesale acquisition price is about $93,000 per patient a year.

Zeposia may have a competitor in etrasimod.

The label of Zeposia requires dose titration and an electrocardiogram when patients initiate therapy due to known concerns with these adverse events, Risinger told investors on Wednesday. If etrasimod is approved without similar safety warnings we believe this would be a benefit over Zeposia and could contribute to etrasimod taking share from BMY's drug. That is not the only new ulcerative colitis therapy in development.

Protagonist Therapeutics Inc., PTGX, said last month that a larger dose of its ulcerative colitis drug candidate failed a mid-stage study, but smaller doses showed clinical remission. It's looking for a large pharma partner or a structured financing arrangement to move the therapy into the next phase of clinical studies.

Protagonist president and CEO Dinesh Patel told investors on May 4 that they believe PN 943 may represent a substantial commercial opportunity and merit further clinical development.

Then there is Eli Lilly Co. LLY, an experimental ulcerative colitis drug. Patients taking mirikizumab had clinically significant improvements at one year compared to placebo, according to the company. Although etrasimod and zeposia are oral S1 P receptor modulators, mirikizumab is an monoclonal antibody that is anti-IL 23 p 19.

The FDA is expected to make a decision on mirikizumab next year. Pfizer plans to seek regulatory approval later this year.