TYK2 Inhibitor Hits a Wall: Sotyktu’s Underwhelming Commercial Performance Amid Fierce Autoimmune Competition

In January 2019, a difficult choice was placed before Bristol-Myers Squibb.

At that time, Bristol-Myers Squibb announced the acquisition of Celgene, marking the beginning of a massive $74 billion "deal of the century."

However, the curtain was only pulled halfway before it got stuck, with the U.S. Federal Trade Commission (FTC) being the obstacle. In the view of the FTC, this acquisition involves monopoly issues:

Celgene has an approved psoriasis oral medication, Otezla, while Bristol-Myers Squibb also has a psoriasis oral drug in its pipeline — the TYK2 inhibitor Sotyktu.

Based on antitrust requirements, Bristol-Myers Squibb faces a "choose one out of two" dilemma. This is a tough decision. Otezla is already an approved blockbuster drug with annual sales exceeding one billion US dollars, while Sotyktu, although still in the clinical stage, could become a rising star.

Ultimately, after weighing the pros and cons, Bristol-Myers Squibb chose to keep Sotyktu and sell Otezla. In hindsight, Bristol-Myers Squibb made the right bet. In September 2022, Sotyktu was approved for marketing, becoming the only JAK inhibitor without a black box warning and successfully boosting the TYK2 inhibitor track.

However, Bristol-Myers Squibb may have also underestimated the cruelty of the autoimmune track.

Since its approval, the sales volume of Sotyktu has still fallen short of expectations. Meanwhile, it is about to face its strongest competitor in the psoriasis field — Johnson & Johnson's Icotrokinra. This also means that the situation for Sotyktu will become even more complicated.

The autoimmune market is a pie, but one misstep could lead to a trap.

/ 01 / The Highly Anticipated Contender

The popularity of TYK2 inhibitors is not surprising. After all, the prospects of the JAK inhibitor market have been well proven; it’s just that safety issues remain to be improved.

To date, four members of the JAK family have been discovered:

JAK1: Mainly associated with acute lymphoblastic leukemia, acute myeloid leukemia, and solid organ malignancies;

JAK2: Mainly associated with diseases such as polycythemia vera, myelofibrosis, and essential thrombocythemia;

JAK3: Mainly associated with diseases such as acute megakaryoblastic leukemia, T-cell leukemia, and lymphoma;

TYK2: Mainly associated with cutaneous lymphoproliferative disorders and T-cell leukemia.

Each member of the JAK family plays multiple roles, so when JAK drugs lack selectivity and inhibit other members of the JAK family, various side effects can occur.

This has also led to JAK inhibitors being unable to shake off the FDA's black box warning. The emergence of Sotyktu, however, has broken this deadlock.

Sotyktu adopts a differentiated structural design, binding to the pseudokinase domain JH2 of TYK2 and rendering TYK2 in an inactive conformation.

Unlike the JH1 domain, the JH2 structures of different JAK family members are not identical. Therefore, by inhibiting this domain, it is possible to specifically block the signaling pathways governed by TYK2, such as IL-23, IL-12, and type I interferons, without affecting other JAK pathways.

This also brings safety advantages. In September 2022, the FDA approved Sotyktu for marketing to treat psoriasis, without adding a black box warning as it did for other JAK drugs.

Given Sotyktu's performance, Bristol-Myers Squibb boldly predicted that its peak sales would reach $4 billion. Because of this, after Sotyktu was approved for marketing, it completely turned TYK2 inhibitors into a new "trend."

/ 02 / Sotyktu Off to a Rocky Start

The key to whether the "upswing" of TYK2 inhibitors can be sustained lies in the sales performance of Sotyktu. Unfortunately, Bristol-Myers Squibb's current performance does not truly support this.

Specifically, Sotyktu's sales in 2023 were $170 million; in 2024, the growth has not been rapid, with Q1, Q2, and Q3 revenues reaching $44 million, $53 million, and $66 million respectively. In the third quarter, Sotyktu’s year-over-year growth rate was already at zero.

Whether it is the total sales or the ramp-up cycle, Sotyktu's current performance is significantly below market expectations. After all, Sotyktu's initial indication, psoriasis, is a huge market.

Psoriasis is a common chronic, systemic immune-mediated disease that affects nearly 7.5 million people in the United States; moreover, psoriasis is referred to as the "undying cancer," with patients often requiring lifelong medication until the drug can no longer control the condition.

These two major factors have led to a substantial market size for psoriasis. In 2019, the market size exceeded 20 billion USD, and the success of the older drug, Adalimumab, cannot be separated from the contribution of the psoriasis indication.

Moreover, Sotyktu has the advantage of being an oral medication. Compared to mainstream drugs that require injection, Sotyktu is one of only two oral drugs on the market, the other being Otezla, which was previously sold by Bristol-Myers Squibb. It appears that Sotyktu may even be more powerful than Otezla.

The FDA's approval of Sotyktu for marketing was based on the results of Phase III clinical trials named POETYK PSO-1 and POETYK PSO-2.

These two clinical trials demonstrated that Sotyktu, taken once daily, was more effective than placebo and Otezla taken twice daily in 1,684 patients aged 18 years and older with moderate to severe plaque psoriasis.

However, in such a situation, Sotyktu has still failed to gain traction more than two years after its launch.

/ 03 / The Ruthless Autoimmunity Track

The poor sales of Sotyktu highlight the brutality of the autoimmune market.

Over the past year, the sales issues of Sotyktu have been a focal point of concern for analysts, and Bristol Myers Squibb has repeatedly apologized and provided explanations for the lower-than-expected sales volume.

Currently, the underperformance of Sotyktu can be attributed to the following two core reasons:

First, the competition in the psoriasis market is indeed too intense, which is something management may not have realized in the past, and execution needs to be further improved in the future;

Second, the difficulty of market access is greater than imagined. The barriers of competitors are not only the prescribing rights of doctors, but also include channel advantages.

Products in the field of immunology are strictly controlled and managed by large Pharmacy Benefit Management companies (PBMs). Due to deep-rooted contractual relationships, it took Bristol-Myers Squibb a long time to enter a preferred position, achieving approximately 65% coverage as of the end of June this year. Moreover, at a higher cost, according to the third-quarter conference call, Bristol-Myers Squibb indicated that it had increased the rebate percentage, meaning it made larger concessions.

Indeed, Sotyktu has been slow to gain momentum. For Bristol-Myers Squibb, while dealing with existing competitors, it must also remain vigilant against new entrants.

On November 18, an official announcement by Johnson & Johnson marked a new milestone in the field. On that day, Johnson & Johnson announced that the ICONIC-LEAD clinical trial had achieved its top-line results, indicating that Icotrokinra, the world's first targeted oral peptide selectively blocking the IL-23 receptor, is about to be launched.

If Icotrokinra is approved, it will inevitably put pressure on Sotyktu.

In terms of efficacy, the PASI 90 rate for Sotyktu at week 16 is around 27-36%, and the PASI 90 rate at week 24 is only between 32%-42%.

At week 16 of treatment with Icotrokinra, 49.6% of patients in the treatment group achieved PASI 90, compared to only 4.4% in the placebo group; the proportion achieving IGA 0/1 was also higher, reaching 64.7%, compared to 8.3% in the placebo group.

The response rate of patients improved as the treatment duration increased. At week 24, 64.9% and 74.1% of patients in the Icotrokinra group achieved PASI 90 and IGA 0/1, respectively.

Of course, Sotyktu has the first-mover advantage and may also leverage channel advantages to suppress Icotrokinra. But in any case, the increasing level of competition is a visibly undeniable fact.

It can be said that in a market with broad prospects, Sotyktu has hit a snag.

/ 04 / Summary

A "low-start" initial indication does not mean Sotyktu loses its appeal, nor does it imply that TYK2 inhibitors will fall out of favor. After all, the potential indications for TYK2 inhibitors are not limited to psoriasis.

But anyway, Sotyktu's performance has reminded many participants that while maintaining high expectations, they must also be fully prepared for a tough battle.

Because, the autoimmune market is not without its challenges.

       Title: TYK2 Inhibitors Hit a Steel Plate