With Biogen’s recent move to sell off its USD 2.3 billion stake in biosimilars firm Samsung Bioepis against the backdrop of lower-than-expected uptake of its controversial Alzheimer’s Disease drug Aduhelm, PharmaBoardroom takes a look at the contrasting fortunes of two key firms operating in the global biosimilars market today.
Global Market: Surging Growth
Global biosimilars sales have soared in recent years, and the market stood at over USD 15 billion in 2020, having grown at a CAGR of 56 percent since 2015. Moreover, McKinsey estimates that double digit biosimilar market growth is set to continue over the next decade, doubling to over USD 30 billion by 2025 and USD 60 billion by 2030. 17 blockbuster molecules with annual peak sales of over USD 60 billion will lose exclusivity between 2020 and 2025, allowing for greater biosimilars market entry.
Europe has been at the forefront of this surge, and today accounts for half of the global biosimilars market by value. Biosimilars tend to be very well accepted on the continent, as Sandoz CEO Richard Saynor recently explained: “In Europe, the days of having to explain a biosimilar are pretty much gone, [they are] extremely well tolerated. In many ways, [biosimilars] are behaving like classic generics… taking a significant proportion of the molecule’s share.”
Today, a biosimilar typically costs between USD 100 and 300 million to develop; lower than innovative drugs which cost over USD one billion, but far higher than the USD one to four million needed to develop a generic
However, the landscape in the US – although perhaps a decade behind Europe in terms of biosimilar acceptance – is also now beginning to shift and, in the world’s largest pharma market, even small movements stand to have a significant impact. McKinsey projects that by 2023 there will be six to eight biosimilars for adalimumab launched in the US, operating through the retail pharmacy channel and claiming shares of a market worth USD 18 billion by 2025. Growing uptake in markets like China – where 400 biosimilars are in active development – and Japan will also be important.
A key challenge for biosimilar market entrants will be swift drug development; a McKinsey analysis of seven biosimilars launches in Europe showed that the three top-selling biosimilars for a range of molecules tended to be early entrants and captured more than 90 percent of the market between them. Another challenge is biosimilars’ high development costs, especially compared to small-molecule generics. Today, a biosimilar typically costs between USD 100 and 300 million to develop; lower than innovative drugs which cost over USD one billion, but far higher than the USD one to four million needed to develop a generic.
A Tale of Two ‘Gens’: Biogen…
Biogen saw biosimilar sales of USD 831 million in 2021, a one percent increase in its results from 2020, although total revenues of USD 10.98 billion were down 19 percent on the previous year. With regulatory issues around the firm’s much-touted Alzheimer’s drug Aduhelm swirling and lower-than-expected uptake, the company recently moved to sell off its USD 2.3 billion stake in biosimilars firm Samsung Bioepis. The stated aim of this divestment, to free up cash for other projects, including dealmaking, perhaps hints that the biosimilars market is not as relevant to the company as the soaring global market figures might suggest.
However, Biogen has retained a biosimilars footprint, continuing to market biosimilars to three blockbuster TNF inhibitors (Abbvie’s Humira, Amgen’s Enbrel, and J&J’s Remicade) in Europe, with an option to also deal with the China market. Biogen also holds rights for biosimilars of two anti-VEGF eye treatments (Regeneron and Bayer’s Eylea and Roche and Novartis’ Lucentis) worldwide and two marketed oncology biosimilars referencing Roche’s Herceptin and Avastin through a collaboration with Organon.
Amgen, which also holds a biosimilar portfolio in addition to its innovative medicines, saw strong financial returns in 2021, reaping around USD two billion in sales for its five biosimilars in the first nine months of the year. At the JP Morgan Healthcare Conference 2022, CEO Robert Bradway touted six upcoming biosimilar launches and plans for geographic expansion which he hopes will double its biosimilar revenues by 2030. The company made around USD 26 billion in total revenue for the calendar year.
In a recent conversation with Soren Giese, Amgen’s country manager for Italy (where the company has launched three biosimilars onto the market), he outlined the “triple win” that biosimilars provide. “The first win is for patients and doctors; if a doctor prescribes an Amgen biosimilar and the patient takes it, both know that the biosimilar is manufactured to the same quality standards as any other Amgen product,” stated Giese. “If for example, a patient has rheumatoid arthritis, previously took Humira®, and is now being switched to a biosimilar, they will want to make sure that the biosimilar works and that it is as close to the originator as possible.”
“Biosimilars are also a win for the healthcare system because they allow to realise savings and reinvest those savings into new, innovative treatments. That is what the circle of innovation is all about. A new innovative medicine is launched and provides benefit and the company now has, due to patent laws, the right to realise a return on the investment. However, once the patent expires, the healthcare system needs to reallocate those funds to new medicines.
“The final win is for Amgen. It is a great way for us to become partners to the healthcare system, not just providing new innovative medicines but also providing a platform of products that allow healthcare systems to realise savings and make the economics work.”