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Amgen's rise in biosimilar space may signal turning tide for US market


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Amgen's rise in biosimilar space may signal turning tide for US market

Amgen Inc. is fostering its biosimilar pipeline to become a powerhouse in the fledgling U.S. copycat arena, building upon global sales that have doubled since the end of 2018.

Biosimilars are medications comparable to a branded biologic counterpart. In the U.S., the biosimilar market has lagged behind that of Europe, where a framework was defined in 2005. The U.S. only established a pathway in 2010.

Taking advantage of these early stages of the U.S. biosimilar market is a good investment for Amgen and the healthcare system as a whole, Chad Pettit, executive director of global value and access for the company's biosimilar programs, told S&P Global Market Intelligence.

"If you think about approaches to cost savings, we believe competition between biosimilars and originator biologics on a level playing field is really what will generate meaningful savings to healthcare systems that are sustainable over the long term," Pettit said. "Why invest in biosimilars? We believe that this is a way to achieve sustainable long-term savings."

The push for biosimilars is based on a need to cut down on healthcare costs by introducing competition into the drug marketplace, according to the Biologics Price Competition and Innovation Act of 2009, but the movement has been hampered in part by a patent system that has stymied the launch of biosimilars even after U.S. Food and Drug Administration approval. The biologics act was passed as part of the Affordable Care Act.

"I'm worried that the market for these products still isn't established," former FDA Commissioner Scott Gottlieb said in a July 2018 speech to the Brookings Institution. "The ability for these products to penetrate clinical practice, and gain acceptance, is still not firm. That doesn't mean that the future doesn't hold a lot of promise for biosimilars. It just means that the future is uncertain."

A year later, Amgen and other biosimilar makers are starting to see a change, and are beginning to benefit from their early work in the space, despite years of developmental, regulatory and legal setbacks.

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With global biosimilar sales of $34 million in 2018's fourth quarter, Amgen picked up $82 million in the second quarter of 2019, mostly on the back of its European launch of Amjevita, the highly sought-after biosimilar of AbbVie Inc.'s Humira. Amjevita will not be available stateside until 2023, as per a settlement between the two companies.

Amgen and its partner Allergan PLC launched two biosimilars into the U.S. market in July, both for cancer — Mvasi, which is a biosimilar of Avastin; and Kanjinti, a copy of Herceptin. Both branded drugs are manufactured by Roche Holding AG's Genentech.

The copycat versions entered the market at a lower price point than their counterparts, as well. Mvasi has a list price 12% lower than Avastin's average selling price, and Kanjinti's is 13% lower than Herceptin's.

Susan Logan, Vice President of Sales & Marketing in Amgen's Oncology division, said that these savings are to be expected for biosimilars to compete with branded products.

"The main driving factor is putting meaningful savings into the system while still being able to ensure that we're going to have reliable supply and the right commercial model and elements behind the products to ensure that we can help get them to patients," Logan said in an interview.

Amgen has invested about $200 million in each of its 10 biosimilar programs. Although the Mvasi and Kanjinti launches are in early days, the drugs are off to a good start, according to Logan, particularly with respect to patient and physician reactions. Qualitative feedback is the best marker this early into a launch, Logan said.

Pettit said that setting the medicines apart in ways other than price is also an important aspect of awareness and uptake.

"We fully expect biosimilars and the originator products are going to compete not only on price but on a wide range of attributes such as delivery devices, patient services and provider education," Pettit said in an interview.

Thousand Oaks, Calif.-based Amgen is also developing copycats of the Roche/Biogen Inc. drug Rituxan, Johnson & Johnson's Remicade, Eli Lilly and Co.'s Erbitux and Alexion Pharmaceuticals Inc.'s Soliris. None have been approved in the U.S. or Europe yet.

Biotechs split between brands, biosimilars

Amgen, like many other large biotechnology and pharmaceutical companies such as Pfizer Inc. and Novartis AG, has both branded products and biosimilars in its portfolio and has occasionally found itself fighting in one court for biosimilar access, while defending its own branded products in another.

For Amgen and its peers, the businesses are not necessarily at odds but can complement and support one another, with lower list prices creating the opportunity for bigger R&D budgets.

"We believe that the savings then lead to the ability for the healthcare systems to pay for innovation," Logan said.

Amgen has faced its own troubles from encroaching biosimilar competition, including the U.S. FDA's approval of drugs that compete with anemia drug Epogen and bone marrow stimulants Neupogen and Neulasta.

"You need a foundation of intellectual property to have a successful marketplace, and from our point of view, protecting intellectual property is really critical to both incentivize innovation as well as the large investments in research and development that are required to bring new medicines to patients," Pettit said. "That's something that we respect."

Betting early on biosimilars

The biosimilar pathway is so new in the U.S. and the development of biologics can take such a long time, that the cost-benefit ratio of delving into the space was not always a sure thing.

Pettit said that, because Amgen was already so deep into the development of branded biologics, the systems were in place for the company to safely place a bet.

"These are complex medicines, and we're using the same scientists, the same manufacturing facilities, the same commercial processes, the same organizations that we use with any of our biologic medicines from Amgen," Pettit said.

If Amgen is able to overcome regulatory and legal hurdles and launch more of its biosimilars in the U.S. and elsewhere, the business will become a prominent revenue driver and one that the company was uniquely fit to pursue, Pettit said.