October 31, 2016
By Alex Keown, BioSpace.com Breaking News Staff
DARMSTADT, Germany – Merck KgaA is looking for a buyer for its biosimilars unit, which has a value estimated at $1 billion, Reuters reported this morning.
This morning Reuters said the German chemical and pharmaceutical company has tapped J.P. Morgan to find potential buyers, citing unnamed “people familiar with the matter.” Neither Merck , nor J.P. Morgan commented or confirmed what the anonymous sources told Reuters. Two years ago, Merck planned to invest heavily in the development of biosimilars, with about $100 million. 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.
Biosimilar competition is becoming fierce as multiple companies are fighting for space to develop drugs to challenge those 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 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 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.
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.
In September 2015, Novartis and Sandoz launched the first approved biosimilar Zarxio in the United States after a U.S. court denied Amgen ’s appeals to block sales of the drug, which is a “copycat” version of that company’s blockbuster treatment Neupogen. Over the summer of 2015, the FDA accepted Sandoz’ submission for approval of a biosimilar copy of Amgen’s blockbuster Enbrel drug, which generated $5 billion in sales for Amgen in 2015. In October 2015 Novartis, the parent company of Sandoz, said it anticipated 10 more biosimilar filings within the next three years. Currently biosimilar drugs earn Novartis about $500 million annually, but the company expects that to increase by about 20 percent.
Some see biosimilars as a threat to the profit margin of pharmaceutical companies. Citigroup analysts have predicted a transfer of at least $110 billion of value from innovator companies to copycat producers in the next decade, Reuters previously said. Express Scripts, a manager of drug benefit plans in the U.S., estimated the U.S. could save $250 billion over a 10 year span of 2014 and 2024 if 11 of the likeliest biosimilars reach the market.
