Why J&J thinks its new psoriasis pill could be one of its biggest drugs ever

An important development from the financial markets: Johnson & Johnson is counting on its newly launched psoriasis pill to become its next cash cow. Investors want to know if it can live up to the hype. Icotyde went to market after the Food and Drug Administration approved it in mid-March for moderate to severe plaque psoriasis.

The once-a-day drug is the first and only oral treatment targeting the same IL-23 receptor as popular injectables, including J & J's Tremfya, which is also indicated for psoriatic arthritis, ulcerative colitis, and Crohn's Disease. IL-23 inhibitors, which include AbbVie's Skyrizi, are biologic medications used to treat chronic inflammatory diseases. "Icotyde has the potential to be one of our largest products ever," Johnson & Johnson CEO Joaquin Duato said on the April earnings call.

Economic Details

Together, J & J is aiming for Tremfya and now Icotyde to shore up its immunology portfolio and to replace and exceed the waning sales of Stelara, which topped out in 2023 at nearly $11 billion in annual revenue. Stelara lost exclusivity last year, paving the way for biosimilars to enter the market. It is estimated to pull in just $2.

36 billion this year, and less and less in the years to come. Tremfya sales have steadily climbed since peak-Stelara — from $3. 15 billion in 2023 to an estimated $7.

It's too early to tell how much Icotyde will add to the mix, but J & J said last month when it reported first-quarter earnings that roughly 1,500 prescriptions have been written in less than 30 days. J & J, which is also studying Icotyde for Crohn's disease and ulcerative colitis, sees the new pill as a much-needed alternative. Tremfya and Icotyde are what Duato called a "complementary category-shaping portfolio" to address different patient needs and preferences within the psoriasis market.

Analyst Views

Topicals have historically been the first line of care for many patients before the shots. J & J estimates about 8 million people in the U. have plaque psoriasis.

"We know there are so many patients that keep cycling and cycling and cycling on topical therapies," the head of J & J's pharmaceutical unit, Jennifer Taubert, said on the April earnings call. Now, she said, recent changes to prescribing guidelines make it easier for those patients to become eligible for systemic and advanced therapies. "So we think Icotyde fits right in this sweet spot as that first systemic choice.

" Bank of America analyst Jason Gerberry questioned whether the convenience of a pill is strong enough to become the standard. "The value proposition isn't entirely obvious given how far behind the IL-23 biologics are," he told CNBC. "Some would argue you'd rather take a quarterly injection than you would take a pill every day, especially if you've gotten used to taking biologics," as is the case for a large number of existing patients with psoriasis.

Financial markets are tracking the development closely as investors assess the likely impact.