3 Big Battles in Biosimilars to Watch

The global biosimilars market is forecast to grow to $24 billion by 2019. A few major contenders -- Hospira, Novartis, and Mylan -- could profit from that growth.

Mar 5, 2014 at 2:30PM

The global market for biosimilars, or generic versions of biologic medical products, is expected to soar to $24 billion by 2019, according to a recent report from Frost & Sullivan -- not bad for a fledgling industry that currently only consists of a handful of drugs.

Biosimilars have appeared in response to the patent cliff now facing some of the top-selling biologic drugs of the past decade. In this article, we'll examine biosimilar versions of Johnson & Johnson (NYSE:JNJ) and Merck's (NYSE:MRK) Remicade, Amgen's (NASDAQ:AMGN) Enbrel, and Roche's (NASDAQOTH:RHHBY) Herceptin, and look at just how much these new contenders matter to patients and investors.

Generic Remicade
The blockbuster rheumatoid arthritis treatment Remicade is a core source of revenue for J&J (NYSE:JNJ) and Merck (NYSE:MRK), which co-market the drug globally:


2013 Remicade sales

YOY growth

Percentage of total revenue


$6.67 billion




$2.27 billion



Source: Company annual reports.

Remicade's European patent will expire in February 2015, although its U.S. patent will last until September 2018.

That's where Hospira (NYSE:HSP), a maker of injectable drugs and medical devices, comes in. Hospira is no stranger to biosimilars -- two of its newer drugs, Retacrit and Nivestim, are respective generic versions of J&J's (NYSE:JNJ) anemia drug Procrit/Eprex and Amgen's (NASDAQ:AMGN) neutropenia treatment Neupogen.

Hospira's (NYSE:HSP) biosimilar version of Remicade, known as Inflectra, last September became the first biosimilar monoclonal antibody ever approved in the European Union. Hospira (NYSE:HSP) co-developed the drug with South Korean company Celltrion, which will market the product as Remsima.

Hospira (NYSE:HSP) plans to launch Inflectra across Eastern Europe this year, and subsequently into larger Western European markets in 2015 as more of Remicade's patents expire. If patent litigation doesn't halt the early launch of Inflectra and Remsima, the drug could generate annual sales of $560 million in Europe, according to Barclays analyst Mark Purcell.

This could provide Hospira (NYSE:HSP), which generated $4 billion in 2013 sales, with a considerable boost in 2015 and beyond. More importantly, it could offset the double-digit decline of its medication management business, which was hurt by an FDA ban that prevented the company from importing several of its top-selling medical devices from Costa Rica.

Generic Enbrel: Amgen vs. Novartis
Amgen's (NASDAQ:AMGN) Enbrel, another blockbuster arthritis drug, could also soon be threatened by a biosimilar version developed by Novartis' generics unit Sandoz. Amgen and Pfizer ended their co-marketing agreement for the drug last October.


2013 Enbrel sales

YOY growth

Percentage of total revenue


$4.55 billion




(outside U.S. & Canada)

$3.78 billion



Source: Company annual reports.

Amgen's (NASDAQ:AMGN) patent on Enbrel will not expire in the U.S. until 2028, thanks to new patents issued in 2011 and 2012, but it already faces generic competition overseas.

However, Novartis is intent on challenging Amgen (NASDAQ:AMGN) in the U.S., and initiated a late-stage trial of its biosimilar version of Enbrel last June. Novartis then sued Amgen (NASDAQ:AMGN), claiming that the new patents were invalid and unenforceable. However, a court ruled that a biosimilar manufacturer couldn't sue a branded company unless a new drug application for the biosimilar had already been filed with the FDA. Novartis appealed the decision in December.

Regardless of the outcome of the appeal, Novartis has a steep uphill climb ahead. When Amgen (NASDAQ:AMGN) received those new patents, Merck (NYSE:MRK) completely abandoned its efforts to create a biosimilar version of Enbrel.

Despite these stateside challenges, Novartis could manufacture the biosimilar overseas, where generic versions of Enbrel are already available from Pfizer's Wyeth division and Indian company Taj Pharmaceuticals.

Either way, a market approval of Novartis' generic Enbrel could further boost sales at its Sandoz division, which posted a 5% year-over-year jump in sales in 2013. Sandoz accounts for 16% of Novartis' top line.

Generic Herceptin: Roche vs. Mylan and Biocon
Last but not least, we'll look at Mylan and Biocon's biosimilar version of Roche's (NASDAQOTH:RHHBY) blockbuster breast cancer drug Herceptin, which was approved last November. Herceptin, a targeted treatment for HER2+ breast cancer (25% of breast cancer cases), is one of the lead contributors to Roche's top line.

Roche Herceptin sales, 2013

YOY growth

Percentage of total revenue

6.08 billion CHF (about $6.84 billion)



Source: Roche 2013 annual report.

Roche's (NASDAQOTH:RHHBY) patents for Herceptin will expire in 2014 in Europe and 2019 in the U.S. However, it faces a unique situation in India, due to the Indian government's practice of pushing pharmaceutical companies to either lower their prices or allow local pharmaceutical companies to produce generic versions of their patented drugs. Those practices caused Roche (NASDAQOTH:RHHBY) to lower the price for Herceptin from $4,500 per month in the U.S. to $1,366 in India, and to abandon its patent altogether last August in India.

Mylan, the third largest generics maker by revenue in the world, and Indian biopharmaceutical company Biocon then pursued the market approval of Hertraz, their biosimilar version of Herceptin.

On Feb. 10, however, Roche (NASDAQOTH:RHHBY) secured an injunction in India against Mylan and Biocon to ban any direct comparisons between Hertraz and Herceptin. Roche's (NASDAQOTH:RHHBY) reasoning was that there were no public records for the phase 1 and 2 trials demonstrating that Hertraz was a valid biosimilar version of Herceptin. As long as the injunction is active, Hertraz can only be promoted as an alternative treatment for HER2+ breast cancer instead of a biosimilar version of Herceptin.

Biocon called Roche's (NASDAQOTH:RHHBY) strategy "shocking but not unexpected," and highlighted the challenges that generic-drug makers can face while developing biosimilars in developing countries.

The Foolish takeaway
The biosimilars market is a key one to watch in the health care industry as blockbuster biologic drugs start going off patent. Companies such as Hospira, Novartis, and Mylan are all poised to profit from these losses at Johnson & Johnson (NYSE:JNJ), Merck (NYSE:MRK), Amgen (NASDAQ:AMGN), and Roche (NASDAQOTH:RHHBY) over the next few years.

More growth opportunities with these 6 stocks
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.


Leo Sun has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers