Horizon bulks up sales force ahead of $750M inflammatory eye drug launch

Horizon Therapeutics—until recently known as Horizon Pharma—is headed for an FDA filing for its inflammatory eye drug teprotumumab. To prepare for the potential launch, the company has set out to expand its sales team.

Horizon expects to have hired most of its sales reps for teprotumumab by the end of July, Jefferies analysts David Steinberg and Edward Chung said in a June 17 note to clients, citing a two-day meeting with Horizon CEO Tim Walbert.

The competition among applicants is fierce: About 1,200 have submitted their resumes, fighting for around 40 to 45 openings. So Horizon hopes to have some of the best marketing talent behind the drug, according to Jefferies.

Teprotumumab is designed to treat thyroid eye disease (TED), where inflammation in the eyes causes symptoms such as double vision and eye bulging. Dublin-based Horizon got the drug through its $145 million acquisition of River Vision in 2017 on the heals of positive phase 2 results. The drug recently aced phase 3, with an imminent biological license application (BLA) planned.

Jefferies now expects an FDA approval about eight months post-BLA filing. As for pricing, benchmarked against comparable orphan assets, Horizon might settle in around $150,000 per course of treatment, the analysts said.

Management believes it will be much easier to identify patients than it has been for its other marketed orphan drugs, the analysts said; after all, TED is mostly found in patients with Grave’s disease, which is marked by an overactive thyroid gland.

By Horizon’s estimate, about 15,000 to 20,000 active TED patients in the U.S. will be eligible for teprotumumab each year. While there were reports that existing immunology drugs such as AbbVie’s Humira could work in active TED, these patients have no FDA-approved treatment today. Based on the patient size and teprotumumab’s strong efficacy, the company is now guiding to peak U.S. sales of over $750 million.

"The active TED market is one we need to build from the ground up, which is typical with rare diseases and requires significant investment in market development and market access," Walbert said on the company’s first-quarter earnings call in May. He said the company is building a dedicated infrastructure that includes functions in sales, medical affairs, patient education and reimbursement.

The teprotumumab sales team will target 6,000 to 7,000 physicians, including 700 ocular plastic surgeons. Currently, patients often progress into inactive TED and could undergo surgery to reduce bulging eyes, according to Walbert.

"Early on, we see ophthalmologists and oculoplastic surgeons playing a larger role, and once the market is more established, we believe that both endocrinologists and ophthalmologists will play a central role in co-managing active TED," he said.

Horizon recently began to shift its portfolio from primary care to one heavy in rare diseases and rheumatology. Primary care drugs made up 85% of sales in 2014, while rare-disease assets contributed 69% to its 2018 revenues, the Jefferies analysts noted. And to mark its transition to an R&D-focused strategy, the company just recently changed the ending of its name from "Pharma" to "Therapeutics."

While Horizon continues to look at potential acquisitions, management believes it can still double revenues from the existing portfolio in the coming years, driven mainly by teprotumumab and gout drug Krystexxa, Jefferies said.

Krystexxa also came to Horizon by way of an acquisition—an early 2016 buy of Crealta. The drug suffered a slow launch when its original developer Savient went after the general gout population of 3 million. Horizon, though, changed gears to focus on refractory patients, a subpopulation of 50,000 to 60,000 U.S. patients. In 2018, the drug’s sales climbed to $259 million, from $156 million in 2017.

In the first quarter, Krystexxa sales of $52.3 million represented an increase of 12%, driven by over 30% year-over-year volume growth. Horizon is confident that it can maintain those kind of numbers throughout 2019, according to Jefferies.

Ample expansion potential still lies ahead, Horizon figures, given still "minimal penetration" in rheumatology and nephrology is "just starting to ramp," the Jefferies analysts said. Besides, neither the company’s internal peak expectation of $750 million nor Jefferies’ $650 million includes potential increased utilization from combination immunomodulator therapy, they said. The company just initiated a study dubbed Mirror that pairs Krystexxa with methotrexate, hoping to reach more patients.