Source: Amgen.
In preparation for a new era of generic competition, biotech companies are doubling down on research programs to protect their market share. In Amgen's (AMGN -0.19%) case, the company is also jumping into the generic biosimilars market to go after sales of their competitors.
Last week, Amgen submitted a biologics license application for its generic biosimilar to AbbVie Inc.'s (ABBV -1.03%) best-selling drug, Humira. If that application leads to an approval, it could shift billions of dollars to Amgen from AbbVie.
What's at stake?
Humira is used to treat a variety of autoimmune diseases, including rheumatoid arthritis, which affects more than 1 million people in the United States alone. Because autoimmune diseases are common, and Humira is a complex biologic that commands a premium price of about $60,000 per year, the drug generates billions of dollars in sales for AbbVie every year, including $12.5 billion last year alone.
Source: AbbVie.
Brewing battle
Amgen's application follows its filing of two inter partes reviews (IPRs) this past summer challenging the validity of AbbVie patents that could blunt the threat of its biosimilar. The patents that Amgen is targeting were awarded last year and relate to new formulations of Humira that combine Humira with "well-known and commonly used liquid formulation components" to reduce dosing reactions.
A decision on whether to review AbbVie's patents is expected from the patent approval board by the end of 2015. If they eventually rescind the patents, it could tear down a key defense strategy that AbbVie is hoping will protect Humira's market share. If the patent board sides with AbbVie, then the company may be better positioned to leverage patents to transition traditional Humira patients to new Humira formulations offering patient benefits, such as less injection-site pain.
A similar strategy was successfully employed by Teva Pharmaceutical (TEVA) to protect its multi-billion dollar multiple sclerosis drug, Copaxone. Teva Pharmaceutical used litigation to delay the entry of Copaxone copycats, buying it time to convert roughly two-thirds of its Copaxone patients to a next-generation formulation that reduced the number of monthly injections. In the process, it's protecting billions of dollars in sales.
AbbVie is also developing new drugs for autoimmune diseases that may offer advantages to Humira, including the potential Humira successor, ABT-494. In Phase 2 trials, 82% of patients taking ABT-494 as a once-daily pill achieved a 20% or greater improvement in ACR criteria, or ACR20, and 71% of patients who fail on anti-TNF inhibiting drugs, such as Humira twice daily, achieved ACR20.
Following that mid-stage success, AbbVie plans to launch a phase 3 study by the end of 2015. If that upcoming study confirms the previous findings, AbbVie could have a new best-in-class treatment option available to patients that makes challenges to Humira less threatening.
Looking forward
AbbVie's efforts to protect Humira are critical because Humira represented 61% of AbbVie's sales in the third quarter. Amgen, however, isn't likely to give up easily; neither will other well-heeled competitors, including Novartis, which are also working on their own Humira biosimilars.
Since billions of dollars are at stake, and healthcare payers, including insurers, are desperate for low-cost alternatives to expensive biologics, AbbVie has its work cut out for it if it hopes to fend off biosimilars. Because the risk of biosimilars to the majority of AbbVie's sales is high in spite of its plans, investing in biosimilar drugmakers, rather than AbbVie, may be the better choice.
