Shares of Novartis (NVS) remained relatively flat Tuesday as the company announced second-quarter earnings hadn’t fallen as much as expected. But in a blow, the Swiss pharma giant also revealed that regulators have rejected one of its experimental drugs, a copycat version of Amgen’s (AMGN) cancer patient white blood cell-booster Neulasta.
The Food and Drug Administration’s (FDA) rejection of Novartis’ biosimilar therapy is welcome news for Amgen, whose treatments have been in Novartis generics unit Sandoz’s crosshairs for a while now. The FDA’s first-ever approval for a biosimilar (which are generic versions of biologically-derived drugs) came in 2015 for Zarxio, a different Sandoz copycat of an Amgen bone marrow drug called Neupogen.
Advisers to the FDA also gave unanimous backing last week for approval of Novartis’ biosimilar of Amgen’s Enbrel—an anti-inflammatory for conditions like rheumatoid arthritis that’s one of the best-selling drugs in the world and a flagship product for the U.S. Biotech. (Another panel last week gave unanimous recommendation for an Amgen biosimilar of AbbVie’s (ABBV) Humira, which is the world’s top treatment by sales.)
Click hereto subscribe to our new Brainstorm Health Daily Newsletter.
The threat of biosimilar competition has been looming large for U.S. Branded drug manufacturers. Biosimilars have been around in European and Asian markets for a decade but are only now arriving in the U.S.
That’s why companies are battling each other to develop biosimilars of expensive, popular products for the American market while also launching patent disputes with other firms which are creating copycats of their own drugs. Novartis said during its earnings calls that it would continue to work with the FDA on the application process for biosimilar Neulasta.
Novartis’ bottom lines is also being dragged down by competition from generics, as outlined in the firm’s Q2 financials. Its revenues declined by 2% and core net profit dropped 5% to $2.93 billion, in part driven by patent expiration of its best-selling cancer drug Gleevec.
The company is also trying to boost sales of Entresto, a highly-anticipated heart failure therapy whose sales have unexpectedly struggled. Novartis hopes to buck that trend since public health officials in Europe and the U.S. Strongly endorsed use of Entresto in heart failure patients in May.