A 'secret' patch shows the future of treating the most common food allergy, and two biotechs are competing to own the $3 billion market

• 2019 could be the year of the first treatments for kids with peanut allergies.
• Two companies are competing for a market of around $3 billion. Both are seeking approval from US regulators to start selling their products.
• The treatments aren't a cure, but do reduce the risk of a dangerous allergic reaction to peanuts.
• Some parents say they prefer one product over the other, but it has a key drawback.

Josh Mandelbaum, 13, has a secret.

For five years, a small circular sticker on his back, around the size of a quarter, has contained the very thing that the New Jersey teen is allergic to: peanuts.

The patch is part of a growing trend that aims to use triggers like peanuts to help those with allergies. The aim is to desensitize them and act like a kind of guard rail against accidental exposure.

You might soon be able to get a prescription for these treatments. The patch and another first-of-its-kind peanut allergy pill could be approved by U.S. regulators as early as next year, and both have the potential to be blockbuster medications.

About 15 million people in the U.S. have food allergies to things like milk, eggs and wheat. Peanut allergies are the most common food allergy among kids, and have been on the rise over the last decade. The market for the treatments is huge, and eventually could reach around $3 billion in total sales, according to Stifel analyst Derek Archila.

Doctors currently have little to offer patients besides advising them to avoid what they're allergic to and always carry an EpiPen or product like it to rescue them if they have a life-threatening allergic reaction. Moreover, those with peanut allergies are less likely to outgrow it than other food allergies, and it's hard to predict how severe an allergic reaction might be.

A treatment, not a cure

The new approach has worked for Josh, his mother, Lianne Mandelbaum, who is also a food allergy advocate, told Business Insider. Josh first tried out the product, DBV Technologies' Viaskin Peanut, as part of a clinical trial years ago.

In the beginning, as part of a "food challenge" used in the trial, Josh had an allergic reaction after eating the equivalent of a fraction of a peanut, Lianne Mandelbaum said. Two-and-a-half years later, it took much more, about one and a half peanuts, to spur a reaction.

While that may sound like a tiny change, it's made a huge difference in how Josh lives his life. He can now confidently go to school and sit in a cafeteria that serves peanut butter, for instance, his mother said.

The patch isn't a cure: Josh continues to avoid peanut products, for example, and has to be careful about accepting food that could be unsafe. But it's been empowering, she said, and given them peace of mind.

"I just don't want him to die from eating the wrong cookies," she said. "We live in a human society. Humans make errors. That's why you want a safety gap."

Mandelbaum was so pleased with the results that she fought to let Josh keep using the patch after the trial ended, through an expanded access program. The only side effects he's seen have been itchy red welts, which have eased over time.

Josh would wear it for the rest of his life if he has to, she told Business Insider.

How it all came together

People with allergies are usually advised to keep away from what they're allergic to.

But controlled exposure, called immunotherapy, has also been part of allergists' arsenal of tools for many years now, including through allergy shots for pollen, mold, dust and more.

Physicians in private practice have also tried this with peanuts and other food allergies. In what's called "oral immunotherapy treatment," patients eat small amounts of peanut or another allergen, which increases over time.

Though these have had success, they aren't approved by the U.S. Food and Drug Administration and may not be covered by health insurance. And, like other immunotherapy approaches, they have risks, including the chance of an allergic reaction.

The search for a more standardized approach eventually led to the creation of Aimmune, which is developing AR101, a capsule of peanut protein that is mixed into food.

When the company was first started, the big question was "how do you take a food, which is inherently variable and highly unpredictable, and make it into a medicine?" Dr. Daniel Adelman, Aimmune's chief medical officer, explained.

The company has done that by focusing on peanut protein, which is where the allergens in the nut are, and using that to re-educate the immune system, he said.

Seeking FDA approval

Dosing of AR101 starts at a very low level, or half a milligram of peanut protein, and then increases over about six months to 300 milligrams, or roughly the equivalent of one peanut kernel. Patients then continue on at that level as a maintenance dose.

Aimmune aims to file with the FDA this month for approval to treat patients ages 4 to 17; a decision could arrive by early fall of 2019. DBV filed for FDA approval of Viaskin Peanut in October to treat patients ages 4 to 11, with a decision expected next year.

The products could potentially reduce a life-threatening allergic reaction to a milder one, giving patients, their loved ones and their doctors an added layer of safety, Dr. Purvi Parikh, clinical assistant professor at NYU Langone and a board-certified allergist, told Business Insider.

If they are found to be safe and effective, they could dramatically change patients' quality of life, Parikh said, reducing an untold amount of anxiety and stress for them and their families.

But which company could end up leading the space is more unclear. A group of doctors polled by Stifel's Archila slightly favored DBV's product, he said, though the analyst also noted that there has been controversy over DBV's clinical trial data.

Some parents of children with allergies told Business Insider that DBV's patch seemed safer to them, because it doesn't require actually eating an allergen. The company also touts this as a potential benefit on its website, saying that its approach "offers a potentially strong safety profile because of how it works via the skin."

Read more: An experimental treatment for peanut allergies just succeeded in a key trial

Tamara Hubbard, a licensed counselor whose nine-year-old son is taking part in an ongoing trial for the patch, called the product "life-changing." She was initially drawn to it over other options because the process was slower and avoided gastrointestinal side effects, Hubbard said.

A giant question mark

On the other hand, those on the patch likely won't know exactly how much allergen they can tolerate, because - absent completing a "food challenge" - they wouldn't be eating it.

Which product a family chooses will likely thus depend on their own preferences, Hubbard, who specializes in food allergy counseling, among other things, said.

Aimmune's Adelman also emphasized the latter perspective in an interview with Business Insider.

"I think that the biggest danger to a child who is peanut allergic is going out into the world and thinking they are protected if they're not," he said.

Pricing - another giant question mark hovering overhead - could also be an important factor. The Institute for Clinical and Economic Review, a nonprofit that evaluates drug prices and, is still reviewing the products and plans to release reports on them in the first half of next year.

The companies haven't said how much the drugs will cost.

Parents, meanwhile, said that they hope everyone who wants these products can get them.

"Everybody who has food allergies deserves to have access to lifesaving treatment," food allergy advocate Mandelbaum said. "It should be available to everybody."