Dive Brief:
- Amgen reported revenues of $5.77 billion for the third quarter, beating analyst expectations slightly. Impact to operations in Puerto Rico from Hurricane Maria hurt earnings per share and will impact full-year earnings by 15 to 18 cents per share.
- The big biotech said it incurred a hit of $67 million, or 7 cents per share, due to damage from the hurricane at its Juncos, Puerto Rico site. "Our drug substance manufacturing and packaging plants are fully operational and we expect to resume formulation/filling and small molecule commercial production by the end of October 2017," said Amgen in a statement.
- Product sales for the quarter were flat year over year. Closely-watched cholesterol drug Repatha continues to disappoint, bringing in only $89 million, below expectations of $109 million.
Dive Insight:
While no one expects Repatha (evolocumab) to suddenly become a major growth driver for the company, the real story for Amgen is in biosimilars — both in the growth it will bring to the pipeline and the competition to currently marketed products. Right now, how those dynamics will play out are still unclear.
"Given our core capabilities in biologics, I think biosimilars will become an important growth driver for us as we continue to make progress in this area," said CEO Robert Bradway on a Wednesday afternoon call with analysts. "As has become increasingly apparent, achieving biosimilarity is challenging, and our expertise in biologics development and manufacturing is a clear differentiator."
Amgen already has approvals for two biosimilars — a copycat of Humira (adalimumab) dubbed Amjevita (adalimumab-atto) and the recently approved Avastin (bevacizumab) biosimilar Mvasi (bevacizumab-awwb).
The company recently struck a deal with Humira's developer AbbVie Inc. regarding Amjevita that will allow it to enter the market in Europe in 2018 and in the U.S. in 2023 — advantageous for AbbVie but less so for Amgen.
"We expect our biosimilars business to be an attractive source of revenue growth for us and one from which we expect to earn a strong return on investment for our shareholders," said Bradway on the Oct. 25 call.
On the flip side, both blockbuster drugs Enbrel (etanercept) and Neupogen (filgrastim) are getting hurt by biosimilar competition. Sales of rheumatoid arthritis drug Enbrel were down 6% year over year to $1.36 billion. Novartis AG's Sandoz gained approval for Erelzi (etanercept-szzs), but the copycat has only launched in countries outside the U.S. While Erelzi has been held off from the U.S. market by Amgen through litigation, biosimilars of competing drugs like Johnson & Johnson's Remicade (inflizimab) have also had an effect on the TNF-inhibitor market.
Sales of Neupogen (filgrastim), which faces competition from Sandoz Zarxio (filgrastim-sndz), fell 25% to $138 milliion for the quarter.
"With Neupogen, the impact of short-acting biosimilar competition was consistent with prior trends," said head of Global Commercial Operations Tony Hooper. "We exited the quarter with 41% share of the short-acting segment and we have continued to maintain pricing discipline despite the competitive pressures Neupogen has faced over the last several years."
Amgen so far has been spared potential biosimilar competition to Neulasta (pegfilgrastim), as the FDA has rejected two copycat biologics. Still, sales of that drug were down 6% to $1.12 billion.
Bradway is optimistic that Amgen stands apart from competitors, noting the rejections that other biosimilar developers have received so far.
"It has proven difficult for our competitors to get biologics approved and biosimilars approved on time," Bradway said. "And we're not fully surprised by that. We expected that there would be difficulties and we expected that the capabilities we had would be helpful for us to differentiate versus some of our competitors," he said.