Teva VP Ika Abravanel resigns
Teva has marked biosimilars as a growth engine - and they will change the generics company.
There is a common denominator of biotechnology company Amgen Inc. (Nasdaq: AMGN), generics company Watson Pharmaceuticals Inc. (NYSE: WPI), medical equipment maker Baxter International Inc. (NYSE: BAX), and South Korean conglomerate Samsung Group Ltd: in the past few weeks, they have all taken measures to enter the biosimilars market, where they will compete against Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) and other companies.
Biosimilars are generic versions of biological drugs, in contrast to generic versions of chemical pharmaceuticals. Teva marked the biosimilars market as a growth engine several years ago. Following its acquisition of CoGenesys to establish a biosimilars platform, exactly three years ago, Teva announced a joint venture in the field with Switzerland’s Lonza Group AG (SWX: LONN) to develop, produce and market biosimilars. In its strategic plan announced two years ago, Teva set a biosimilars sales target of $830 million in 2015. Teva’s biosimilars sales in January-September 2011 totaled just $105 million less than 1% of its total sales - mostly in Europe. On the other hand, Teva’s biosimilars sales were 31% higher than in the corresponding period of 2010.
There has been an awakening in the biosimilars industry in the past few weeks. Biogen Idec Inc. (Nasdaq: BIIB) and Samsung Biologics Ltd. announced the establishment of a $300 million joint venture, which is planned to launch biosimilar products in 2016. Watson and Amgen also joined forced with the goal of reaching market in 2017. Momenta Pharmaceuticals Inc. (Nasdaq: MNTA) and Baxter have also joined forces to develop biosimilar products.
The new players are joining companies that are already active in the sector, or have announced plans to enter it.
A long and risky road
Meanwhile, it seems that Teva is unconcerned about the competing joint ventures, and it anticipates a market with few players. At last week’s JPMorgan Healthcare Conference, Teva CFO Eyal Desheh and Teva Americas president and CEO William Marth said that the way to develop biosimilars is long and risky. They believe that the biosimilars market will be a big one, but they noted the high entry barriers, including the complexity of developing and producing the drugs, and the high cost.
”The classic generics industry is not expected to enjoy strong growth rates in the near term, even as big pharma companies that produce brand drugs are also dealing with a wave of patent expirations. That is why everyone is looking for new growth engines, and looking at biosimilars as one of them,” said Leader Capital Markets analyst Sabina Podval.
Podval says that the biosimilars market is seen as having one of the markets with the greatest potential growth in the pharmaceuticals industry. Analysts project it will grow from the current few hundred million dollars to $2-2.5 billion within a few years. Patents for biological drugs with $54 billion in aggregate sales are due to expire by 2020.
However, the expected rapid growth is fraught with obstacles, in the form of regulations - or the lack thereof in this case. “The US has not yet formulated detailed regulations on this issue,” says Podval. “Europe is ahead on the issue, and there is a regulatory structure for some types of molecules.”
For example, analysts believe that regulations will require biosimilars to undergo clinical trials to obtain marketing approval, but the extent of these trials is still unclear, and whether there will be different requirements for different drugs.
First steps in the US market
Teva prefers not to wait for the regulations to catch up, and took its first steps in the US market two years ago, when it filed an application for a biosimilar with the FDA, under its Biologics License Application (BLA) protocol. The drug, XM02, increases the production of white blood cells for patients undergoing chemotherapy. XM02 is equivalent to Amgen’s Neupogen.
A few months ago, Teva settled a patent infringement case with Amgen over the drug, under which Teva can launch XM02 when Neupogen and Neulasta’s patents expire in November 2013.
The development and production of biosimilars are more complicated and expensive than for generics, and the approval process will likely be longer as well. These facts lead Podval to conclude that the biosimilars market will find itself in the space between brand drugs and generics. “Prices for biosimilars will presumably be closer to prices for brand drugs,” she says.
“Globes”: With all the new companies in the market, does Teva have an advantage?
Podval: “On the one hand, it has major advantages as a large, veteran company with a global production network. Teva is preparing for the day when there will be extensive use of biosimilars, and it has a cooperation agreement with Lonza, one of the largest producers of active pharmaceutical ingredients (APIs) for biologics.
”But beyond Teva’s R&D and production capabilities, the more important question is whether it is ready to enter this market. These drugs are more similar to world of innovative drugs, which requires a much larger sales and marketing network. It’s true that Teva has several innovative drugs, but until now it has acted more like a generics company. The question is how ready it is to make the transition.”
It just might be possible that the difficult transition is a natural part of the evolution of Teva, which has always been identified as a generics company. The company’s recent measures indicate movement in the direction of innovative drugs, and its incoming CEO Dr. Jeremy Levin comes from this business. Biosimilars, which more closely resemble brand drugs than generics, are part of this general trend.
Published by Globes [online], Israel business news - www.globes-online.com - on January 17, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012
You comment was recieved and soon will be published.
Load more comments
Abravanel's is the first senior departure from Teva since Erez Vigodman became CEO.
FDA approves Pluristem cell production facility
Pluristem's Haifa plant can produce 150,000 doses of PLX cells annually.
Desheh: Splitting Teva will not create value
Teva CFO Eyal Desheh says Teva's tight integration means that a split makes no sense.
InsuLine expanding in Europe
24Care will distribute the company's InsuPad product in the Netherlands and Belgium.
Teva launches generic breast cancer, osteoporosis drug
Teva has 180 days of marketing exclusivity for generic Evista, which had 2013 US sales of $824 million.
BiolineRX raising $21m in Nasdaq secondary offering
The company will use the proceeds to develop leukemia and celiac disease drugs.
MediWound sets terms for $92m Nasdaq IPO
The burns and wounds treatment developer's offering is at a value of $350-370 million.
Opko losses triple
CEO Phillip Frost: From an R&D perspective, all our programs are progressing.
D-Pharm doubles on good interim stroke study results
The Phase IIa trial interim results found the company's drug was safe for cerebral strokes.
Perrigo selling OTC drugs through Amazon
Perrigo: It is also a platform for obtaining good information about consumer behavior.
Teva launches bipolar, schizophrenia treatment
Adasuve is the first orally inhaled medicine for the acute treatment of agitation in schizophrenia and bipolar I disorder.
Perrigo acquires Aspen Global products for $51m
Perrigo bought value-brand OTC products sold in Australia and New Zealand.
Galmed updates $30m Nasdaq IPO prospectus
The liver disease drug developer will issue shares at a company value of $132 million.
Enzymotec shareholders raise $131m in offer to sell
Kibbutz Ma'anit's Galam reportedly sold shares for $46 million.
Compugen raises $63m, Magic $51m
The two companies held secondary offerings on Nasdaq on the basis of shelf prospectuses.
If Rose Fostanes played basketball
Reforms in regulations for foreign caregivers are welcome, but don't go far enough.
Private treatment kills public healthcare
If the German Committee validates private healthcare, it will be the last nail in public healthcare's coffin, argues Prof Dani Filc.
Reducing the number of polyps that colonoscopies miss
EndoChoice's Israel development center has devised an endoscope with a 330-degree arc.
Neopharm moves into orphan drugs
The company, better known for marketing others' products, has been quietly building up its innovative capacity, as VP Tal Fuhrer relates..
Merck Serono Israel incubator nurtures early stage projects
Merck Germany head of pharmaceuticals Dr. Stefan Oschmann says R&D is enjoying a renaissance at big pharma companies.
Israeli biomed cos bring in US CEOs
"Globes" speaks to 3 US CEOs appointed to boost marketing at TASE traded medical device companies.
Alcobra has had two successful Nasdaq offerings this year as it develops an ADHD treatment with fewer side effects.
Restructuring can help Teva's Copaxone woes
Avishai Ovadia argues that Teva can offset falling Copaxone sales by reducing overall company costs.
Enabling diabetes patients to sleep soundly
Excess insulin levels can be fatal when they occur at night. NightSense aims to remove the fear.