Introduction to Otrexup
Otrexup, a drug-device combination, is a single-dose, once-weekly auto-injector containing methotrexate, a prescription medicine. It is indicated for the treatment of severe, active rheumatoid arthritis and active polyarticular juvenile idiopathic arthritis (pJIA) in adults and children, respectively, as well as for the control of symptoms of severe, resistant, disabling psoriasis in adults[2].
Market Context
The global market for rheumatoid arthritis (RA) drugs is projected to reach $53.1 billion by 2031, growing at a CAGR of 5.6% over the forecast period. This growth is driven by the increasing number of promising RA therapies, recent drug approvals, and their rapid uptake worldwide. The market is mainly driven by premium-priced anti-TNF drugs and other targeted biologics, with JAK inhibitors also expected to contribute significantly[3].
Current Market Performance of Otrexup
As of the third quarter of 2021, Otrexup generated trailing 12-month revenues of $15.5 million. The product has a gross margin percentage in the low 70s, indicating a profitable margin for the manufacturer[2].
Acquisition and Financial Implications
In December 2021, Assertio Holdings, Inc. acquired Otrexup from Antares Pharma, Inc. for a total purchase price of $44 million, including $18 million upfront and $26 million in deferred payments. This acquisition is expected to be accretive to Assertio's adjusted EBITDA in 2022 and aligns with the company's goal of acquiring new products to deliver at least $50 million in gross profit by 2024[2].
Patent Life and Commercialization Potential
Otrexup has nearly ten years of patent life remaining, expiring in May 2031. This extended patent life provides a significant window for Assertio to invest in further commercialization and leverage its digital platform and expertise for growth[2].
Market Segments and End-Users
Indications
Otrexup is used for:
- Severe, active rheumatoid arthritis in adults
- Active polyarticular juvenile idiopathic arthritis (pJIA) in children
- Control of symptoms of severe, resistant, disabling psoriasis in adults[2].
End-Users
The primary end-users of Otrexup are hospitals and specialty clinics, given the advanced facilities and high treatment costs associated with these settings[5].
Regional Outlook
Global Methotrexate Market
The global methotrexate market, which includes Otrexup, is dominated by North America due to the high prevalence of cancer, psoriasis, and arthritis, as well as the presence of key players. Europe holds the second largest market share, while the Asia Pacific region is expected to grow at the fastest pace due to its large patient pool and advancing healthcare infrastructure[5].
Price Projections and Revenue Growth
Current Pricing and Revenue
Given the trailing 12-month revenues of $15.5 million and a gross margin in the low 70s, Otrexup is a profitable product. The acquisition by Assertio is expected to enhance its commercialization efforts, potentially leading to increased revenues.
Future Growth
Assertio's strategy to leverage its digital platform and expertise is expected to drive growth for Otrexup. The company aims to achieve at least $50 million in gross profit from new product acquisitions by 2024, with Otrexup being a key contributor to this goal[2].
Market Trends
The increasing demand for effective small-molecule therapies in the RA market, coupled with the ongoing safety challenges with key classes of RA therapeutics, presents an opportunity for Otrexup to gain market share. The launch of biosimilars, however, may introduce competitive pressure, particularly in the European market[3].
Competitive Landscape
Key Players
The methotrexate market, including Otrexup, is competitive with several key players. Antares Pharma, Inc., the original developer of Otrexup, has a suite of drug injection devices that enhance patient compliance and ease of use. Other players in the RA market include those offering biologics and JAK inhibitors, which are also significant competitors[4].
Biosimilars
The expected launch of biosimilars throughout the forecast period will have a significant impact on the RA market, including the methotrexate segment. This could lead to downward pressure on prices but also presents opportunities for differentiated products like Otrexup to maintain market share through their unique delivery systems and patient compliance benefits[3].
Key Takeaways
- Acquisition and Financials: Assertio Holdings, Inc. acquired Otrexup for $44 million, expecting it to be accretive to adjusted EBITDA in 2022.
- Market Potential: Otrexup has significant growth potential due to its extended patent life and the growing demand for RA treatments.
- Regional Outlook: North America and Europe are key markets, with the Asia Pacific region expected to grow rapidly.
- Competitive Landscape: The market is competitive, with biosimilars and other RA treatments posing challenges and opportunities.
- Price Projections: Increased commercialization efforts by Assertio are expected to drive revenue growth, though biosimilar launches may impact pricing.
FAQs
Q: What is Otrexup used for?
A: Otrexup is used for the treatment of severe, active rheumatoid arthritis, active polyarticular juvenile idiopathic arthritis (pJIA), and the control of symptoms of severe, resistant, disabling psoriasis in adults.
Q: Who acquired Otrexup and for how much?
A: Assertio Holdings, Inc. acquired Otrexup from Antares Pharma, Inc. for a total purchase price of $44 million.
Q: What is the current revenue and gross margin of Otrexup?
A: As of the third quarter of 2021, Otrexup generated trailing 12-month revenues of $15.5 million with a gross margin in the low 70s.
Q: How long does the patent for Otrexup last?
A: The patent for Otrexup is set to expire in May 2031, providing nearly ten years of exclusive market presence.
Q: What are the key drivers of the global methotrexate market?
A: The global methotrexate market is driven by the increasing number of promising RA therapies, recent drug approvals, and their rapid uptake worldwide, particularly in North America and Europe.
Sources
- Assertio Holdings, Inc. Announces the Acquisition of Otrexup (methotrexate) a Drug Device Combination from Antares Pharma, Inc. - Biospace
- Assertio Holdings, Inc. Announces the Acquisition of Otrexup (methotrexate) a Drug Device Combination from Antares Pharma, Inc. - GlobeNewswire
- Global Rheumatoid Arthritis Drugs Market $53.1 Billion by 2031 - iHealthcareAnalyst
- Small-Cap Research: Antares Pharma, Inc. - Zacks Investment Research
- Methotrexate Market is expected to grow further with its Increasing Application in the Treatment of Cancer and Arthritis - Biospace