AbbVie Inc. (NYSE:ABBV) been hard at work diversifying itself away from Humira, its best-selling drug. But, Humira still represents about two-thirds of AbbVie's revenue, and that makes its pending patent expiration in Europe concerning. With biosimilars prepped and ready to launch in Europe later this year, should investors be worried?

A megablockbuster coming to an end

Humira is a widely used therapy in a myriad of autoimmune diseases and, thanks to steady prescription volume growth and annual price increases, it's become the top-selling medicine in the world.

A row of European country flags flying in front of a building.

IMAGE SOURCE: GETTY IMAGES.

Last year alone, growing use of Humira in conditions including rheumatoid arthritis resulted in $18.4 billion in sales worldwide. With annual sales that are bigger than many commercial-stage biotech companies' market caps, replacing any revenue that shifts to biosimilars once Humira's patents expire won't be easy 

In the U.S., biosimilars won't begin challenging Humira for a few more years, but in Europe, Humira will lose its exclusivity this year. Amgen (NASDAQ:AMGN) and Biogen (NASDAQ:BIIB) will be among the first to launch Humira biosimilars in the EU in 2018, and while the stakes are lower in Europe than in the U.S., they're still high.

International sales accounted for $6 billion of Humira's haul in 2017, up 6.7% year over year. Companywide, Germany and the U.K. contributed $2 billion to AbbVie's global sales last year. You can bet Humira represented a good chunk of those sales.

Europe's ahead of the game

The U.S. biosimilar market is only in the early innings, but Europe's biosimilars market is much more mature. As a result, biosimilars are winning significantly greater market share away from their reference biologics there than they are in America. For instance, thanks to discounts of 50% or more, Novartis (NYSE:NVS) and Celltrion's Rituxan biosimilars have captured 80% of Rituxan's prescription volume in Britain in just a little over one year.

Amgen and Biogen are likely hoping for a similarly strong start. Last fall, Amgen inked a deal with AbbVie that clears the way for it to launch its Humira biosimilar, Amjevita, in the EU this year. Earlier this week, Biogen and codeveloper Samsung Bioepis announced a similar deal that delays their biosimilar, Imraldi, until 2023 in the U.S., but allows it to launch in Europe in October 2018.

If everything goes according to plan, Biogen will become the first biopharma to have biosimilars on the market in Europe for each of the major anti-TNF autoimmune disease therapies: Remicade, Enbrel, and Humira. Since Biogen's already marketing two anti-TNFs in the EU and its biosimilars are already selling at a $500 million annualized pace, it should be able to hit the ground running with Imraldi.

What's the takeaway

AbbVie is conceding the market in Europe, but its deals with Amgen and Biogen will protect Humira's U.S. sales for about five more years, which is critical given that the U.S. market accounts for the lion's share of Humira revenue.  

I expect that Humira biosimilars will catch on quickly in Europe, accelerating throughout next year as Amgen and Biogen agree to pricing arrangements with individual EU member countries. If I'm right, then AbbVie could see similar market share losses for Humira to what's been seen with Rituxan.

Nevertheless, we're not talking about an insurmountable amount of money in terms of lost sales. AbbVie's pipeline boasts multiple blockbuster drugs that could win approval over the next year or two, and revenue from those drugs could more than offset any decline in European Humira revenue. Obviously, the U.S. market will be a different story, but I think we're still far enough away from a U.S. biosimilar launch to give AbbVie time to blunt that threat.

Todd Campbell owns shares of Amgen. His clients may have positions in the companies mentioned. The Motley Fool recommends Biogen. The Motley Fool has a disclosure policy.