Q4 May Signal If Winlevi Can Give Wings To Sun’s US Specialty Sales
Executive Summary
Sun-Cassiopea’s first-in-class topical androgen receptor inhibitor, Winlevi, appears off to an encouraging start in the US, generating prescriptions from 80% of targeted physicians. Can it hold out in the competitive acne therapy segment and add sheen to Sun’s specialty portfolio?
Sun Pharmaceutical Industries Ltd.'s partnered anti-acne treatment Winlevi (clascoterone cream 1%) appears to have received an encouraging early response in the US, adding to the prospects of the Indian firm’s specialty business, which has seen significant traction overall in fiscal 2022, pandemic-related challenges notwithstanding.
Sun’s CEO (North America) Abhay Gandhi indicated that of the doctors covered for the product in the first three months since launch, 80% had given “at least one prescription” for Winlevi, which is seen as a “very good indicator” that the “interest level” of the customers for a new mode of action is very high.
“The initial response has not just met but maybe exceeded expectations,” Gandhi said at the earnings call for the fiscal third quarter ended 31 December 2021.
Winlevi, a first-in-class topical androgen receptor inhibitor, made its debut in the US in November last year and has been approved by the US Food and Drug Administration for the topical treatment of acne vulgaris in patients 12 years of age and older. Last year, Sun entered into a license and supply agreement with Italy’s Cassiopea S.p.A. to market Winlevi in the US and Canada.
Competitive Landscape
Gandhi, however, declined to provide granular details on Winlevi, citing competitive and strategic reasons, but maintained that the “real impact” of Winlevi sales was not seen in Q3 and some of it may actually be seen in Q4, since Q3 wasn’t a full quarter for the product and November and December had many holidays.
Nirmal Bang Equities said that Winlevi has seen a jump in prescription volumes this quarter but still does not contribute materially to the base specialty portfolio sales. “Traction in the specialty portfolio should continue going forward led by Winlevi. We revise our specialty sales estimates to consider the strong ramp up seen in Winlevi prescriptions and above expected growth in domestic markets,” the broking house said in a 1 February note.
The acne space has several approved therapies focused on a wide variety of targets. Informa’s Datamonitor Healthcare indicates that there are over two dozen marketed drugs for acne administered via the oral and topical routes, including Sun’s own Absorica (isotretinoin) and Absorica LD (lower dose isotretinoin). Teva Pharmaceutical Industries Ltd. had earlier launched the first generic version of Absorica in the US, while Sun had simultaneously introduced its authorized generic. (Also see "Teva Leapfrogs Taro With Authorized Generic Epiduo Forte Launch" - Generics Bulletin, 7 Dec, 2021.)
In terms of pipeline acne drugs, Datamonitor Healthcare said that the majority are administered via the topical route, with the remainder being oral, subcutaneous, intranasal or intravenous formulations. “GlaxoSmithKline plc leads industry sponsors with by far the highest overall number of clinical trials for acne, followed by AbbVie.,” Datamonitor said in its market spotlight report published in January 2022.
There were approximately 612.5 million prevalent cases of acne worldwide in 2019 and the report forecasts that number to increase to 658.6 million by 2028.
Last year, Morgan Stanley stated that Winlevi’s addition to Sun’s US acne specialty portfolio should help it “cushion isotretinoin erosion” and give the company longer term growth visibility. Competing topical drugs for acne include Aczone (dapsone), Epiduo (adapalene and benzoyl peroxide) and Onexton (clindamycin phosphate and benzoyl peroxide), it noted.
“Given the new mechanism of action and using competing products as a reference, we estimate $100-150m per annum sales potential from Winlevi over 3-4 years from launch,” analysts at the investment bank and financial services firm said in July last year.
US Market Situation Still To Normalize
Meanwhile, Sun’s global specialty business has had a strong run, with Q3 FY22 revenues of approximately $183m across all markets, up about 21% year-on-year. Fiscal year 2022 is the 12-month period ending 31 March 2022.
“Our global specialty business for the first nine months has already crossed previous full-year revenues. We remain steadfast in our focus on top-line growth, operational efficiencies and business continuity while simultaneously continuing to expand our global specialty presence,” said Sun’s founder and managing director Dilip Shanghvi.
Specialty medicines essentially treat chronic, complex or rare diseases; their share in overall global pharmaceutical spending is estimated to have increased from 21% in 2010 to about 38% in 2020 and is expected to rise to 45% by 2025, according to IQVIA data.
Sun’s specialty revenues in the US grew over Q3 last year, mainly driven by Ilumya (tildrakizumab), Levulan (aminolevulinic acid) and Cequa (cyclosporine A ophthalmic solution 0.09%). Ilumya was also launched in Canada during the quarter for the treatment moderate-to-severe plaque psoriasis in adults.
Overall, Sun reported US formulation sales of $397m (+6%) in Q3 FY22, bolstered by the growth in the specialty business, though Gandhi maintained that the market situation there hadn’t quite returned to normal yet.
“While doctor clinics were opened in the US during the quarter, the situation is yet to fully normalize. Patient flow to local doctor clinics, as well as frequency of doctor calls by our medical representatives, are still both below pre-COVID-19 levels,” Gandhi explained.
The executive declined to hazard a guess around when he expected footfalls in the doctor clinic to get back to pre-COVID-19 levels. “If I look at it very broadly then, every single product does get impacted. Only the extent of one over the other really changes,” he said in response to an analyst’s question around which key products were affected amid pandemic-related constraints.
India Operations
In contrast, Sun’s senior management indicated that field force operations in India were “near to normal” in Q3, with almost all doctor clinics operational.
“We witnessed growth across most of our therapies. The growth was driven by a combination of factors like improved demand for non-COVID treatments, which led to higher growth in chronic, semi-chronic segments and better patient flow to doctors' clinic and increased healthcare awareness,” Sun’s CEO (India business), Kirti Ganorkar, said on the earnings call.
The executive also indicated that the productivity of the new field force (the company undertook a field force expansion project in Q4 of FY2020) had started improving and that about “70% of the territories for the new field force are performing as per our expectation, while the performance for the remaining 30% is likely to improve going forward.”
Travel cost for medical representatives was close to normal, while the firm continues to see “some savings” in terms of the cost of medical conferences, Ganorkar added.
Sun, which is India’s top-ranked drug firm, launched 25 new products on the domestic market in Q3 and despite the challenging and competitive environment, maintained the trend seen over the past few quarters of outperforming average industry growth. For instance, in the cardiovascular diseases area, against an overall segment growth of 3.3%, Sun reported growth of 12%, while in gastroenterology the company grew by 15.7% against segment growth of 10.8%.
Sun’s consolidated sales from operations in Q3 were INR98.14bn ($1.3bn; +11%), while formulations sales in India stood at INR31.67bn (+15%). Net profit for the quarter was at INR20.58bn (+11%).