AbbVie: A Rise In The Incidence Of IBS Could Boost Profits

Summary:

• Herbicides have been linked to irritable bowel syndrome.
• The incidence of irritable bowel syndrome is on the rise.
• New medications from AbbVie show signs of promise.

Preamble

Now that I’m firmly seated on the slippery slope of past tense, I have become increasingly interested in ways to reduce the acceleration to my eventual destination. From my many hours of research, I have discovered that the thousands of chemicals being introduced into our environment on an annual basis do not act as a type of vitamin, rather, they act as a kind of rocket fuel to propel us to the hereafter. Furthermore, prior to giving us this unrequested assistance on our journey to meet our maker, these chemicals very often make us sick. Generally speaking, many of these chemicals remain in common usage despite evidence of the harm they cause, and the pharmaceutical companies provide medication to alleviate symptoms of the illnesses these compounds can produce. An excellent example of this is the plasticizer bisphenol A, which I wrote about in my article titled “Secular Trends 1“.

In this article, an exploration of the potential link between glyphosate, the most widely used herbicide, and Irritable Bowel Syndrome (IBS) is considered. If the hypothesis herein is correct, then bumper profits for AbbVie (NYSE:ABBV) are likely to continue, and even increase. It goes without saying that AbbVie’s medications for IBS are also used to treat other inflammatory conditions, however, these other maladies are not the target of this piece.

Causes of IBS

Over the past few decades, there has been a significant increase in the prevalence of IBS, both in the United States and around the world. Globally, it’s estimated that 5-10% of the world’s population has IBS, whilst the condition affects between 25 and 45 million people in the United States.

IBS is a chronic inflammatory disease that can affect any part of the digestive tract. The exact cause of IBS is not fully understood, but it is believed to be the result of a combination of changes in the Western diet, genetic abnormalities, environmental, and immune system factors.

The Western diet has been associated with an increase in the incidence of several chronic diseases, including IBS. This diet is characterized by a high intake of refined carbohydrates, saturated and trans fats, red and processed meats, a low intake of fruits, and vegetables. Studies suggest that this type of diet can alter the gut microbiome, increase intestinal permeability, and promote inflammation, all of which may contribute to the development of IBS.

Other proposed instigators of the condition includes an abnormal gut bacteria, resulting from exposure to pollutants and chemicals, such as glyphosate. Indeed, according to some research, some 42.3% of fruits, vegetables and wheat-based foods contain easily detectable levels of glyphosate.

Glyphosate

Glyphosate is the most widely used herbicide, particularly with genetically engineered crops such as wheat and oats. It operates by inhibiting an enzyme called EPSP synthase, which is necessary for the production of aromatic amino acids in plants. It is known that humans do not have this enzyme, and so the compound is officially considered “safe.” However, EPSP synthase is also present in many beneficial bacteria that make their home in the human gut and are vital for health.

This herbicide has now been used for many decades, and, as result, there has been the emergence of glyphosate-resistant weeds. As a consequence, farmers often increase glyphosate application rates or attempt to uses alternative herbicides.

Whilst I could find no evidence that links IBS to glyphosate directly, there are numerous research papers that point out that glyphosate can have a huge impact on the composition and function of gut microbes. As noted previously, an abnormal gut microbiome is heavily linked to the development of IBS.

Two examples of such research papers are given below;

1. In vitro studies have shown that glyphosate can selectively kill certain strains of beneficial bacteria, such as Lactobacillus and Bifidobacterium, while leaving harmful bacteria such as Salmonella and Clostridium difficile relatively unaffected. According to the paper; “researchers have suggested that Glyphosate can cause dysbiosis, a phenomenon which is characterized by an imbalance between beneficial and pathogenic microorganisms”

2. Scientists have also demonstrated that exposure to glyphosate can transform the metabolic activity of the gut microbiome, which then leads to alterations in the production of metabolites such as short-chain fatty acids (SCFAs). These fatty acids play a vital role in ensuring a healthy gut, and thus, reduce the possibility of developing IBS.

a) SCFAs can help regulate the pH of the gut by reducing the acidity, which can help prevent the growth of harmful bacteria.

b) SCFAs have been shown to have anti-inflammatory effects in the gut, which can help reduce the risk of IBS and other gut-related disorders

c) SCFAs can help strengthen the intestinal barrier by promoting the production of mucins, which are proteins that help protect the gut lining from damage.

Current Treatments for IBS

Right now, AbbVie’s Adalimumab (Humira) is the perhaps the most commonly used drug to treat gut inflammatory disorders such as Crohn’s disease and ulcerative colitis. Given the market size, it’s no surprise that Humira is one of the best-selling drugs in the world, with sales of over $21.23 billion in 2022; 37% of AbbVie’s total revenue.

However, Humira is coming off patent and there is increased competition from other pharmaceutical companies that will be able to produce biosimilar versions of the drug, which is obviously bad news for AbbVie investors. One such product produced by Amgen (AMGN) is now available in the US.

However, AbbVie has taken steps to protect its profits from the loss of Humira’s patent by securing additional patents and introducing new formulations of the drug. For example, the company has developed a citrate-free version of the medication, in an attempt to differentiate their product from the biosimilars coming on to the market.

AbbVie

In addition to altering the formulation of Humira, the company has also introduced Rinvoq and Skyrizi. These compounds have different indications and mechanisms of action.

Firstly, Rinvoq (upadacitinib) is a Janus kinase (JAK) inhibitor and is used to treat moderate-to-severe conditions. The compound suppresses the activity of JAK enzymes, which play a key role in the inflammatory process in conditions such as IBS. The product has the added benefit of being taken orally once a day.

Skyrizi (risankizumab) on the other hand, is a monoclonal antibody that targets interleukin-23, which is a cytokine that has a key role in inflammation. Skyrizi is similar to Humira in that it is also administered by injection.

Now that the company has several drugs which act in different ways, it doesn’t require a Phd in marketing to realize that there is the opportunity for some form of combination therapy for severe cases of IBS.

Financials

According to Q1 results, Humira sales came in at $3.5 billion for the quarter, which represented a decrease of 25% worldwide. This is entirely to be expected given that Humira is off patent. On a positive note, Skyrizi and Rinvoq produced revenues of $1.4 billion and $0.7 billion, respectively. The increases for Skyrizi and Rinvoq were 45% and 48%, respectively, compared to prior year. In my view, growth of over 45% for new medications is very healthy (Pardon the pun). Naturally, it will take time for physicians to gain experience with alternative products. Given that it is highly likely that patients will prefer to take a pill rather than have an injection, Rinvoq may well gain traction in the years ahead.

Emerging Competition

Given the size of the market and the fact that data suggests that IBS and other inflammatory conditions are on the rise, there are many companies developing competitive products to alleviate these conditions. A sample of these products include the following:

Reddy Laboratories’ Tofacitinib is a small molecule inhibitor that targets a specific enzyme involved in the inflammatory process. It was approved by the FDA in 2018 for the treatment of moderate to severe ulcerative colitis, and there is now evidence to show that the medication has some limited effect on Crohn’s.

Ozanimod, produced by Bristol-Myers Squibb (BMY), is another small molecule inhibitor that targets specific immune cells involved in the inflammatory response. It was recently approved by the FDA in 2020 for the treatment of moderate to severe ulcerative colitis, and is currently being studied for its effectiveness in Crohn’s disease.

Since both Tofacitinib and Ozanimod have been shown to be effective in inducing and maintaining clinical remission and mucosal healing in patients, it is fair to say that these products will probably gain a share of the IBS market. And, as far as I am aware, there are no studies that demonstrate that Rinvoq has a superior efficacy compared to Tofacitinib and Ozanimod.

Summary

Given that herbicides and other chemicals are found in increasing concentrations in our food, I believe it’s entirely reasonable to expect the incidence of IBS to rise over the coming years. Without a doubt, AbbVie is ideally positioned to provide medications to alleviate the symptoms of this unfortunate condition.

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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