Merck KGaA in Deep Talks to Sell Biosimilars Unit

March 9, 2017
By Alex Keown, BioSpace.com Breaking News Staff

DARMSTADT, Germany – Merck KgaA could be closer to selling off its biosimilars unit, a plan that’s reportedly been in the works since the fall of 2016. The company is reportedly in “deep talks” to sell the division, which is valued at approximately $1 billion.

This morning Merck KgaA confirmed that it was seeking a buyer, which supported rumors initially reported in October. Stefan Oschmann, Merck KgaA’s chief executive officer, told reporters the company was in advanced talks about selling off the unit, a unit that little more than two years ago Merck planned heavy investments of about $100 million to develop biosimilars. Although Oschmann confirmed the company was looking to sell off the biosimilars unit, he did not provide any information on prospective buyers or possible value of the sale. Merck KGaA is developing a biosimilar portfolio focused on oncology and inflammatory disorders, according to its website. In March, Merck KGaA launched a Phase III study of MSB11022, a proposed biosimilar of adalimumab (Humira), in chronic plaque psoriasis. So far Merck KgaA has not brought any biosimilars to market.

While Merck is focused on a Humira biosimilar, another company already beat them to the punch. In September, the U.S. Food and Drug Administration approved Amjevita, Amgen ’s biosimilar to AbbVie ’s Humira. Amjevita is the first adalimumab biosimilar approved by the FDA and has been approved for the treatment of seven inflammatory diseases, including moderate-to-severe rheumatoid arthritis, moderate-to-severe polyarticular juvenile idiopathic arthritis, psoriatic arthritis, ankylosing spondylitis, moderate-to-severe chronic plaque psoriasis, adult moderate-to-severe Crohn's disease and moderate-to-severe ulcerative colitis. This is the first approved biosimilar for Amgen. The company has eight other biosimilars in development in its pipeline.

Biosimilar competition is becoming fierce as multiple companies are fighting for space to develop biosimilar therapies that will challenge traditional drugs manufactured by rival companies. Biosimilars, which are made inside a living cell, are always uniquely different in composition, which differentiates them from generic drugs, which are exact replicas of other drugs. They have been widely available in Europe since 2006, but the FDA was only granted the right to review and approve them when Obamacare was passed in 2010.

While Amgen has surged ahead on its biosimilar development, other companies are targeting its drugs with biosimilars. Some Amgen drugs being targeted include Neulasta (pegfilgrastim) and cancer drug Neupogen, which is used to treat neutropenia, which is caused by a lack of certain white blood cells due to cancer. Another Amgen drug facing biosimilar threats from Sandoz and Pfizer ’s subsidiary Hospira is the anemia drug Epogen. Amgen has been fiercely contesting threats against these drugs in U.S. courts. Last week, Amgen filed a lawsuit against Coherus Biosciences over the development of its biosimilars and trade secret violations.

Last year, GBI Research reported the global biosimilars market value is expected to reach $20 billion by the end of 2015 and could hit $55 billion by 2020. An analyst told BioSpace that at the time there were 642 biosimilar trials being conducted, with 146 unique molecules.