Source: Biogen.

The launch of a biosimilar to Johnson & Johnson's (JNJ 0.03%) top-selling Remicade this year is a key goal of a joint venture between Biogen Inc. (BIIB 1.39%) and South Korea-based Samsung. And if that happens, then it could mean billions of dollars in Remicade revenue will soon be up for grabs.

Targeting biologics
Because biologics are created within living organisms, they can't be copied identically. As a result, biologics have mostly remained insulated from the threat of generic competition.

That's about to change.

Following the passage of the Affordable Care Act, the FDA created a pathway that allows for the approval of generic alternatives that work similarly to, but aren't precise copies of, biologics. The first of these biosimilars, an alternative to Amgen's (AMGN -0.86%) Neupogen made by Novartis, won approval in the U.S. last year.

Because biologics with combined annual sales of $67 billion will lose patent protection over the next five years, drugmakers, including Biogen, are lining up to get a piece of the action.

Biogen is especially interested in targeting biologics known as anti-TNFs, including Johnson & Johnson's Remicade, that are widely used to treat autoimmune diseases. Anti-TNFs carry price tags in the tens of thousands of dollars per year, so they're among the planet's best selling drugs. Last year, Johnson & Johnson's Remicade posted sales of $6.5 billion alone.

Source: Biogen inc.

Establishing a footprint
Biogen is one of the globe's biggest biotech companies and currently, it gets the lion's share of its sales from multiple sclerosis drugs, including Avonex and Tecfidera. Last year, Biogen's sales totaled $10.8 billion.

Multiple sclerosis will probably remain a big driver of Biogen's revenue going forward, but the company's management is diversifying it into new indications. As part of that effort, Biogen inked a joint venture with Samsung in 2011 to develop biosimilars.

In January, that joint venture -- Samsung Bioepis -- notched it's first big win when EU regulators gave the green light to Benepali, a biosimilar to Amgen's anti-TNF Enbrel. A second big win for Samsung Bioepis could come later this year if EU regulators approve SB4, the company's Remicade biosimilar.

Remicade lost patent protection in the EU last year and biosimilars launched by other drugmakers are already beginning to dent Remicade's overseas sales. In Johnson & Johnson's fourth quarter report, management blamed biosimilars in part for Remicade's U.S. export revenue declining 27.5% to $782 million and its ex-currency international Remicade sales falling 4.7% to $1.3 billion in 2015.

Remicade's patents in the United States, however, protect it against biosimilars until 2018. Last year, the U.S. accounted for 67% of Remicade's global sales. 

Fool-worthy bottom line
Historically, small-molecule generic drugs capture up to 80% of the market from their branded counterparts, and if biosimilars follow a similar path, then they could eventually move the needle for Biogen, because Biogen splits Samsung Bioepis' profit with Samsung.

However, there are reasons a ramp-up in biosimilars may be slower than some hope, and for that reason, Johnson & Johnson investors may not want to panic yet. Patients benefiting from Remicade may be hesitant to switch to biosimilars, and because biologics are tough to make, their price advantage may not be as big as some expect.

Regardless, investors shouldn't discount biosimilars' potential tailwinds for Biogen, nor should they ignore the risk to Johnson & Johnson's financials. After all, it took years for traditional generic drugs to win over prescribers, and that could mean that it's only a matter of time before biosimilars come out on top.