Competition Hots Up For Biocon In $3.6-Billion Neulasta Biosimilar Market
Tablets are arranged for a photograph in Tokyo, Japan. (Photographer: Kiyoshi Ota/Bloomberg)

Competition Hots Up For Biocon In $3.6-Billion Neulasta Biosimilar Market

The U.S. drug regulator has approved the third biosimilar for a key drug to fight infection from chemotherapy. And that may toughen competition for Biocon Ltd. in one of the biggest markets for Indian pharmaceutical companies.

Sandoz in a media statement said it has received the U.S. Food and Drug Administration’s approval for Ziextenzo—a biosimilar of Amgen’s Neulasta (pegfilgrastim) that’s used to lower the incidence of infection, manifested by low white blood cell count and associated with fever in patients with non-myeloid cancer. The subsidiary of Novartis had resubmitted the biologics licence application to the U.S. FDA in April 2019 after receiving a complete response letter—issued if the regulator determines it won’t approve the drug application in its present form for one or more reasons—in 2016.

Sandoz has been selling Ziextenzo in Europe since last year and it intends to launch the drug in the U.S. “as soon as possible this year”. The other two biosimilars were launched by Biocon in July 2018 and Coherus BioSciences Inc. in January 2019 under the brand names Fulphila and Udenyca, respectively. IMS estimates the overall market size for the Neulasta biosimilar at $3.6 billion in the U.S.

Biocon sells the biosimilar—which is a cheaper copy of biologic drug — under its partnership with Mylan. Though the Indian drugmaker was the first to launch its product in the U.S., it couldn’t maintain its first-mover advantage over Coherus.

Morgan Stanley expects Sandoz’s entry to lead to price cuts. Currently, the biosimilars are being sold at a discount of 50-55 percent to Amgen’s price, that may widen to 60 percent according to the brokerage. Biocon has been constrained to improve its market share due to capacity constraints, which are likely to get addressed in ensuing months, Sameer Baisiwala, executive director at Morgan Stanley said in a note.

Agreed Girish Bakhru, pharma analyst at Bank of America Merrill Lynch. While there’s a risk of increasing discounts, he said the overall market switching to biosimilars could potentially increase sales. Bakhru estimated Biocon’s market share in this drug to be in the range of 15-18 percent in the next two years at a 40 percent average price discount. But he had already assumed the biosimilar to be a three-player market by the end of 2019 and hence, made no changes to Biocon’s estimates.

While Biocon doesn’t provide revenue contribution from individual drug, three analysts BloombergQuint spoke to said Fulphila contributes 8-10 percent to the company’s top line. The other companies that are awaiting approval for a similar drug are Dr. Reddy’s Laboratories Ltd., Apotex Inc. and Kashiv BioSciences.

HSBC said Sandoz’s approval raises hurdles for Biocon’s Fulphila. Expanding capacity by Biocon is critical to recover market share, according to Damayanti Kerai, healthcare analyst at the research firm. “Sandoz is expected to utilise its well established network of doctors and reimbursement channels to quickly ramp-up market uptake of the drug,” she said in a note. “Sandoz is the only company to have FDA approval for both short- and long-acting filgrastim and it will use a wider offering as a key selling point.”

Biocon, however, said the approval of Sandoz’s biosimilar doesn’t come as a surprise.

“We believe there is a robust demand for affordable alternatives and the market is big enough to accommodate multiple players for a $4-billion product. Biocon and Mylan are scaling up to expand to additional customer segments in the U.S. and for global markets on the back of availability of increased capacities in the near term,” Christiane Hamacher, chief executive officer at Biocon Biologics, told BloombergQuint in an emailed statement.

With less than 25 percent of the total pegfilgrastim market been captured by biosimilars so far in the U.S., Hamacher said there’s still a substantial untapped market with a lot of scope for further growth in the coming quarters/years.

The company declined to comment on product-specific revenue contributions.

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