Credit Suisse
Biosimilars is a "must understand" theme that will have very
significant impact on the global biotechnology and pharmaceutical
sectors. Biosimilars pose both a threat and an opportunity for the
biotechnology and pharmaceutical sectors, and even with some
read-through to other multinational companies.
Public companies most exposed to biosimilar [near-copies of
proteins and antibodies] impact include AbbVie (ticker: ABBV),
Amgen ( AMGN), Cipla [of India], LG Chem [of South Korea], Merck
Serono [of Germany], Momenta Pharmaceuticals ( MNTA), Novartis (
NVS), Pfizer ( PFE) and Samsung [of South Korea].
We note that the size of the biosimilar opportunity -- just
entering a near-term $70 billion land-grab -- antitumor necrosis
factors (TNFs) are the primary focus. Biologics have become a very
significant part of the global drugs market. This market grew from
just $20 billion (or 10% of the global drugs market) in 2000 to
$159 billion or 29% in 2014, and $276 billion and 32% by 2020.
Biologics dominance of the top 10 drugs is even greater with
biologics representing about 70% of the value by 2015. By 2018, $69
billion of biologics will have undergone patent expiries in major
markets ($35 billion in the U.S. and $34 billion in the rest of the
world).
By far, the anti-TNFs represent the biggest near-term biosimilar
opportunity as they make up the largest single component of the
global biologics market ($30 billion or 35% of 2015 total biologics
sales) and is potentially catalyzed by the December 2016 U.S.
patent expiry of [AbbVie's] Humira (although there is debate around
this effective date due to the likely Nov. 18 issuance of the '657
application/'135 patent -- with expiry on Jan. 4, 2025).
Implications for stocks; AbbVie and to a lesser extent Amgen and
Merck ( MRK)/Johnson & Johnson ( JNJ) are the most negatively
exposed to the "first wave of biosimilar" anti-TNFs. In contrast,
Amgen, Coherus Biosciences [not yet public], Novartis, Boehringer
Ingelheim [of Germany], Pfizer and Samsung are most positively
exposed to "first wave of biosimilar" anti-TNFs.
-- Ravi Mehrotra
-- European Pharma Team
-- Vamil Divan
-- Anubhav Aggarwal
-- Fumiyoshi Sakai
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