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Thursday, Mar 28, 2024

Biosimilar Drugs Will Impact Amgen’s Future

Since the end of July, Amgen Inc.’s share price has dropped 14 percent – a slump that coincides with new competition the Thousand Oaks company is facing for one of its established drugs, as well as a period of increased turbulence in the overall stock market. In March, the Food and Drug Administration approved Zarxio, a copycat of Amgen’s Neupogen, a drug that brought in about $1.2 billion for the biotech giant last year. Amgen launched a legal battle to delay the introduction and sale of Zarxio, but a judge’s ruling Sept. 2 favored Novartis S.A., the Swiss maker of Zarxio. The company started selling Zarxio the next day. In a statement, Amgen said it will “promote the robust clinical data of Neupogen, 24 years of experience, and will utilize our capabilities to compete effectively.” Both drugs increase white blood cell counts to fight infection in cancer patients undergoing chemotherapy. Zarxio is known in the industry as a “biosimilar.” It’s made in the same way as Neupogen, which lost its patent protection last year. Because both are made of living cells, not simply combinations of chemicals, small changes in the environment or the manufacturing process can produce tiny differences in the final product – thus Zarxio and Neupogen are similar, not identical. Eric Schmidt, an analyst at Cowen Group Inc. in New York, said that while Zarxio’s debut and Amgen’s stock decline occurred simultaneously, he linked the drooping share price to overall market volatility and to a slump in biotech stocks in particular. Since the end of July, the S&P Biotechnology Index has declined about 10 percent, while the broader S&P 500 is down 7 percent. Nevertheless, the biosimilar issue will affect Amgen long term, and on both sides of the ledger. Zarxio was the first biosimilar to win FDA approval, but others are on the way – including several from Amgen. The company is working on biosimilars for Humira, a psoriasis drug from Abbott, and for breast cancer and colon cancer drugs from Genentech Inc. Amgen projects its first biosimilar will hit the market in 2017. Amgen has estimated that biosimilars could reap $3 billion in revenue for the company, more than offsetting lost revenues from biosimilar competition for its drugs. But Schmidt is not so sure. “I think it will be close, but I am not sure Amgen will succeed in fully offsetting lost sales,” he said. “Time lines for Amgen’s own biosimilars are still in flux, and we also don’t know how many other new biosimilar players will be competing for (market) share with Amgen.”

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