Truxima Fires The Starting Gun In Biosimilar Race To The Bottom

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Includes: AMGN, BIIB, CHRS, LLY, PFE, RHHBF, RHHBY, TEVA
by: EP Vantage

With no patent dance or odd nomenclature requirements, and more potential for switching, Europe's first cancer biosimilar is a go. Celltrion's Truxima, a version of Roche's (OTCQX:RHHBF, OTCQX:RHHBY) Rituxan, was recommended for EU approval in December, and yesterday the marketing partner Mundipharma said it was launching it in its first seven markets.

This offers a stark contrast with the US, where biosimilar launches are proceeding at snail's pace, and the relatively straightforward EU introduction will allow government payers to force through massive discounts to rituximab's price. Little wonder that Truxima could quickly become one of the best-selling biosimilars (see table below).

The keys to Celltrion's success are obvious: Truxima has been approved in all of Rituxan/Mabthera's indications, in line with prior EU biosimilars; unlike the US, the EU appears more comfortable with switching from and interchangeability with the brand; and government tendering is driving biosimilar adoption faster than expected, with deep discounts versus the brand.

For now Truxima's pricing is a matter between Celltrion's licensees and reimbursement authorities, but Mundipharma points out that biosimilars tend to be 10-30% cheaper than their corresponding brands. Biosimilars of Remicade, meanwhile, are running discounts as high as 30-60%.

Truxima will set a particularly interesting precedent, being the first biosimilar of an oncology drug. Already, in the UK the British Oncology Pharmacy Association has drawn up guidelines to ensure fast adoption of anticancer biosimilars, highlighting the resulting savings as a safeguard for NHS budgets and for funding novel cancer drugs.

And the EU regulatory pathway is deliberately biosimilar-friendly, for instance extrapolating approval to other indications as long as similarity has been demonstrated in one. It is unclear whether the US will allow indication expansion: so far it has for Zarxio and Pfizer's (NYSE:PFE) Inflectra (minus one paediatric indication), while Canada has refused to accept all uses of the latter.

Switching is another hot issue, being driven in the EU by the big Nor-Switch study, the first to show that switching from Remicade to biosimilar infliximab was not inferior to continued Remicade. Meanwhile, the US FDA has set a high bar to interchangeability (FDA baits biosimilar makers with switching guidance, January 19, 2017).

Government tailwind

Adoption of EU biosimilars has been fastest where there are government tenders: biosimilars account for 90% of Norway's infliximab market. Bernstein analysts reckon that by the end of this year Remicade will have lost 50% of its EU market to biosimilars, and Enbrel 33%.

With such a tailwind, Celltrion has all to play for. Roche's branded Rituxan/Mabthera sold $7.4bn last year, slightly below its 2014 peak, and the sellside now expects revenues to fall off more quickly, though the decline will be nothing like that following patent expiry on a small molecule.

Mundipharma says it is launching Truxima in the UK, Germany, Italy, Netherlands, Belgium, Ireland and Luxembourg. Last year Wells Fargo analysts estimated that the Celltrion drug would become the fifth-best selling biosimilar, with 2020 sales of $214m, behind Lilly's Basaglar, Amgen's ABP 501 and Pfizer's Inflectra and CT-P17.

Consensus across the sellside, as compiled by EvaluatePharma, is rather more bullish on Truxima's competitors, though by now Celltrion's success can be in no doubt.

Top 10 biosmilars by 2022 sales
Product
Company
Reference product
2022 sales ($m)
Basaglar
Lilly (NYSE:LLY)
Lantus
1,361
Inflectra
Pfizer
Remicade
988
Benepali
Biogen (NASDAQ:BIIB)
Enbrel
596
Amjevita
Amgen (NASDAQ:AMGN)
Humira
582
CHS-1701
Coherus (NASDAQ:CHRS)
Neulasta
465
PF-05280586
Pfizer
Rituxan
357
PF-05280014
Pfizer
Herceptin
336
Truxima
Celltrion
Rituxan
335
Granix
Teva (NYSE:TEVA)
Granix
298
PF-06439535
Pfizer
Avastin
29
Source: EvaluatePharma sellside consensus.

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