On Sept. 19, Novartis (NVS -0.45%) shared positive news with investors regarding the clinical trial results for its biosimilar drug candidate to Amgen's (AMGN -1.46%) osteoporosis medicine Prolia. These results suggest that the U.S. Food and Drug Administration (FDA) will ultimately approve the drug.

With Prolia set to lose exclusivity in the U.S. in 2025, Novartis could be close to booking some revenue from its biosimilar drug. But how much of a lift could it provide to the company's revenue? Let's go over the outcome of the clinical trial and the U.S. osteoporosis market to figure this out. 

No discernable differences between Prolia and the biosimilar

Osteoporosis is a bone disease which manifests itself when the body doesn't make enough bone and/or loses too much bone. This can result in brittle bones and increase the risk of fractures from a fall or minor bump.

Biosimilar drugs seeking approval from the FDA are required to demonstrate that they are basically no different in several ways from the branded drug. And Novartis' biosimilar for Prolia did just that in its phase 3 clinical trial.

The study of a drug's impact on the body of a patient is referred to as pharmacodynamics. When given to patients, Novartis' biosimilar had the same reaction within the body as Prolia. This isn't surprising given that the drug is almost a mirror image in terms of composition to the reference drug Prolia. Given this information, it makes sense that the observed safety and efficacy of the biosimilar drug was essentially the same as Prolia during Novartis' clinical trial. 

A doctor and patient talk during an appointment.

Image source: Getty Images.

The boost to revenue would be decent

Novartis' Prolia biosimilar will likely be ready to roll out in the United States in 2025. And it looks like it could provide a nice lift to the company's annual revenue base.

It's estimated that approximately 54 million Americans aged 50 and older are affected by osteoporosis and low bone mass. It's no wonder that Prolia is on track to record around $2.5 billion in U.S. revenue in 2022 for Amgen.

There are several competitors with biosimilars in clinical trials at this time, including South Korea-based drugmaker Samsung Bioepis and Taiwanese drugmaker JHL Biotech. But since Novartis is the largest and thus has the most reach, I believe that it will be able to eventually siphon off 20% of Prolia's overall sales volume. Adjusting for the fact that biosimilars are around 30% cheaper than branded drugs, this would equate to $350 million in total annual revenue.

Stacked against the $52.4 billion in revenue that analysts anticipate from Novartis in 2022, this would be a 0.7% bump up. By itself, that's hardly Earth shattering. But with Novartis having a total of more than 150 projects currently in clinical development, its future is arguably bright. That's why analysts believe that Novartis will deliver 4.1% annual earnings growth through the next five years.

A solid business at a fair price

Novartis is a quality pharmaceutical company. And the valuation of the stock isn't unreasonable.

This is backed up by a forward price-to-earnings (P/E) ratio of 12.5 that is in line with the 12.5 forward P/E ratio of the pharmaceutical industry. As an added bonus, income investors will like the well-covered 4.3% dividend yield that Novartis offers.