Moody's picks 5 early winners in biosimilar market
- While biosimilars have yet to take off in the U.S., top credit rating agency Moody's remains optimistic of the future market opportunity for the biologic copycats, calling the competition "a rising headwind for branded pharmaceutical companies" in an Oct. 4 report.
- The agency's analysis highlighted five pharmaceutical giants that stand to gain the most from biosimilars, as well as four companies at the highest risk from these drugs.
- In Europe, annual sales erosion is expected at eat between 25% and 30% out of branded sales, Moody's found, while the U.S. remains "slow to date" in adoption.
Eight of the top 10 selling drugs in the world were biologics in 2017, creating a huge market opportunity for biosimilars. Moody's analysts are paying attention to how the still-developing area could affect the bottom lines of the industry's biggest players.
"Over the next year or so, as biosimilars gain traction globally, several branded pharmaceutical companies will face declining sales of important blockbuster drugs," Michael Levesque, a Moody's senior vice president and lead author of the report, said in an Oct. 4 statement.
"Biosimilars have seen strong uptake in Europe and this trend will accelerate as the biosimilar market there continues to develop, with more drugs approved and launched."
The report selected Pfizer, Biogen, Novartis, Amgen and Mylan as the initial leading biosimilar companies by sales, with a slate of already launched biosimilars and others in development between them.
Moody's expects Pfizer to post $700 million in biosimilar revenues for 2018, growing to $1.5 billion in 2020.
Biogen, through its share of a joint venture with Samsung Bioepis, is poised to be runner-up to Pfizer, with $550 million in expected 2018 sales from biosimilars and $1 billion by 2020.
For 2020, Moody's estimated Novartis' Sandoz unit to log $750 million in biosimilar revenue, and Amgen and Mylan to reach $500 million each.
Companies most at risk from biosimilars
The report also concluded Roche, Amgen, AbbVie and Johnson & Johnson will likely face declining sales in the next 12 to 18 months for key products dinged by biosimilar competition.
Nearly half of Roche's global sales come from three cancer biologics: Rituxan (rituximab), Herceptin (trastuzumab) and Avastin (bevacizumab). The first two are now facing European biosimilars and Moody's deemed it likely they will also see U.S. copycats by 2019.
Other at-risk drugs include Amgen's Neulasta (pegfilgrastim) and Epogen (epoetin alfa) — which combine to make up about 25% of total sales for the company — AbbVie's Humira (adalimumab) and J&J's Remicade (infliximab).
Shifting regulatory landscape
Amgen is in a unique position, standing both to gain and to lose from biosimilar uptake. Copycat competition could take a bite out of Amgen's biologic sales, even as the California biotech seeks to do the same to some of its large-cap peers.
This fits with a notable distinction between the markets for biosimilars and generics: large pharma has been on both sides of the biosimilar game, as Richard Mortimer, a managing principal at the Analysis Group who specializes in health economics, recently noted in an Oct. 4 talk on the subject.
With generics, the pharma industry largely stood united against companies that focused exclusively on knockoff copies. Biosimilars, however, have so far led to some splits in the ranks, as the high-profile legal battles between Novartis and Amgen, and Pfizer and J&J have shown.
Mortimer predicted drugmakers will be more active in promoting biosimilars than generics. He also expects to see more brand-brand competition between biologics and their copycats, partially due to the absence — so far — of any fully interchangeable biosimilars in the U.S.
Moody's found the U.S. regulatory framework to still be evolving, but was optimistic that biosimilars will be helped by future efforts from the Food and Drug Administration and from the White House's drug pricing blueprint.