Johnson & Johnson (NYSE:JNJ) has so far avoided the worst from biosimilar competition to Remicade, but this could be about to change with a new US entrant from Merck & Co. (NYSE:MRK) and Samsung Bioepis. The companies have said the cost of their biosimilar, Renflexis, will be 35% below Remicade's list price, a much steeper discount than that for the other available copycat, Pfizer's (NYSE:PFE) Inflectra.
This is a statement of intent from Samsung. Renflexis is its first US biosimilar, but it has an extensive pipeline including a version of Sanofi's (NYSE:SNY) Lantus that was tentatively approved by the FDA last week (see table below). It seems that J&J is not the only company that will soon have some hard decisions to make on pricing for one of its big brands.
Only last week J&J was congratulating itself on second-quarter Remicade sales being down 5% year-on-year - when adjusted for rebates in the same period in 2016 - versus the 10-15% erosion the group had been expecting. Pfizer launched its biosimilar, Inflectra, at risk last November with a list price around 15% lower than Remicade's.
J&J appears to have been competing with Inflectra on cost, with its chief financial officer, Dominic Caruso, saying on the group's earnings call that some of the Remicade decline was down to price, with a "minor impact" from market share erosion and some contribution from patients switching from Remicade to J&J's newer product Stelara in Crohn's disease.
It will have a harder time fighting off Renflexis, which has a wholesale acquisition cost of $753.39 per vial. It seems Samsung is being as aggressive in the biosimilar arena as it once was in the smartphone market, where it is now the number-one player.
Samsung Bioepis has advanced quickly since forming in 2012 as a joint venture between Samsung Biologics and Biogen (NASDAQ:BIIB). Biogen initially paid around $45m for 15% of the venture, but its stake has more than halved since then, as a result of equity financings in which the US biotech did not participate.
Presumably this means that an option to increase its holding to 49.9%, which expires in 2018, will not be taken up. A separate licensing agreement, which gives Biogen European marketing rights for any anti-TNF biosimilars, remains in place.
Samsung Bioepis is still a private company, although there was speculation two years ago that it was planning to float on Nasdaq in the US for around $1bn.
Merck & Co. signed up as a Bioepis partner in 2013, taking on the responsibility of commercialising unnamed biosimilars for an undisclosed fee. Merck will sell Renflexis in the US while Biogen markets it in Europe, where it was approved in May 2016 and is known as Flixabi. Interestingly, Merck also markets branded Remicade in Europe, Russia and Turkey.
So far, Europe has been keener to embrace biosimilars, but this could change as pricing pressure in the US continues and biosimilars become more accepted.
Samsung Bioepis boasts of 13 biosimilar candidates in total, including the six "first-wave" products listed above. If the company's first foray into the US market is anything to go by, the developers of the other branded drugs on its hit list should brace themselves.