- Amgen Inc. has secured the right to sell a copycat version of AbbVie's top-selling drug in the U.S. — but first, it will have to wait six years.
- Following more than a year of litigation concerning the intellectual property for Humira, the companies reached a settlement on Thursday. Amgen now has non-exclusive rights to market its biosimilar in most European countries starting Oct. 16, 2018 and stateside starting Jan. 31, 2023. The drugmaker plans to sell the product under the brand names Amgevita and Amjevita, respectively, for the two regions.
- Financial terms of the agreement were not disclosed, other than Amgen has agreed to pay AbbVie unspecified royalties tied to the biosimilar's sales.
Biosimilars haven't really carved out a strong foothold in the U.S., in large part because companies have done a good job using patent litigation to protect their reference products. So far, the Food and Drug Administration has given a thumbs up to seven biosimilars, and just a fraction of those have started bringing in revenue.
Amgen received FDA approval for Amjevita (adalimumab-atto) in September 2016. The month before, however, AbbVie hit the company with a lawsuit claiming the copycat biologic infringed on Humira (adalimumab) patents. Legal hurdles have since prevented Amjevita from coming to market.
But with Thursday's settlement, Amgen sees a light at the end of the tunnel.
"Amgevita will be one of our first biosimilar launches, and this agreement will allow us to secure a strong foothold in the $4 billion European adalimumab market," Scott Foraker, vice president and general manager of biosimilars at Amgen, said in a statement.
The benefits from bringing a Humira biosimilar to market are clear. The drug is the top-selling pharmaceutical worldwide, fetching $4.7 billion during the second quarter alone. What's more, AbbVie's thorough patent defenses mean that additional biosimilar competition, such as Boehringer Ingelheim's recently approved Cyltezo (adalimumab-adbm), will surely have to jump through many legal hoops before potentially stealing away market share.
Consensus among analysts puts 2018 revenues for Amgen's biosimilar at $50 million and 2019 revenues at $144 million, according to Evercore ISI analyst Umer Raffat. In a Sept. 28 note, Raffat said Amgevita's European launch next year should bring those near-term numbers to fruition.
The drug's long-term potential could also be quite valuable. Investment bank Jefferies, for instance, predicts that the treatment could rake in hundreds of millions of dollars after 2018 in Europe. Analyst Michael Yee also noted that the company has a biosimilar to Roche AG's Avastin (bevacizumab) approved — though not yet marketed — and at least nine other biosimilar programs that it has suggested would bring in more than $3 billion.
The deal is surely lucrative for AbbVie as well. While financials weren't disclosed, Jefferies anticipates the royalty payments for Amjevita/Amgevita will be in the 10% range. And perhaps most importantly, the settlement gives AbbVie a solid five to six years before a competitor reaches the highly sought after U.S. market.
The settlement with Amgen "provides incremental reassurance that we are unlikely to see U.S. Humira biosimilars prior to 2023," Jeffrey Holford, an analyst at Jefferies, wrote in a Sept. 28 note on AbbVie. "Whilst consensus is rapidly moving towards our thesis that U.S. biosimilars are unlikely to launch prior to this, there are many biosimilar developers working on Humira and we expect 'noise' on this issue from time to time."
Reaffirming those thoughts, AbbVie could have kept Amgen in litigation much longer given the enormous body of patents it has protecting the mega-blockbuster anti-inflammation drug. The current lawsuit had a district court date for Fall 2019, and a potential appeals court decision could have come in as late as 2021, Evercore's Raffat noted.
Furthermore, two inter partes reviews (IPRs) launched by Amgen weren't initiated — bolstering AbbVie's upper hand.
"In theory, this basically meant that at least [the Patent Trial Appeal Board] had upheld the validity of these two formulation patents of Humira," Raffat said. "Also, considering Amgen filed IPRs on them, it is a safe assumption that Amgen’s biosimilar Humira formulation infringed those patents on concentration/surfactant/polyol."
Investors appeared upbeat about how the settlement benefits both sides, and notably AbbVie. The company's shares were up 5% to $89 apiece in Thursday morning trading. Amgen's, meanwhile, rose more modestly, up less than 1% to $186.08 apiece.
"As an innovation driven bio-pharmaceutical company, we believe intellectual property is essential to protect the investment in science and advance novel cures for the toughest health challenges," AbbVie's Laura Schumacher, EVP of external affairs, general counsel and corporate secretary, said in a Sept. 28 statement.
"In reaching this agreement, we have achieved the balance between protecting investment in innovation and providing access to biosimilars, which will play an important role in our health care system," she added. "We will continue to defend our intellectual property and to reinvest in further advancements in medicine to bring choices to patients in need."