Biosimilars – Business Outlook driven by significant health cost savings

Biosimilars continue to hold significant business opportunity, driven by the significant potential savings in healthcare costs and patent expiries of blockbuster biological drugs. In the US, biosimilars are projected to save the healthcare system approximately $38.4 billion from 2021 to 2025 (Rand). While price differential between the innovator and biosimilar has been only about 15% to 30% (Rand) in US,  the overall size of the opportunity still implies significant merit in wider adoption, especially for biosimilars designed interchangeable. In the EU, the savings are even more pronounced due to broader contracting and more aggressive price negotiations. For example, adalimumab biosimilar launches in Germany and UK led to price reductions, transtuzumab biosimilars launches in Spain and Italy were at 30% to 40% discount to innovator price and infliximab in Norway and Denmark being the most stark with price rationalization of around 70%. These cost reductions not only make treatments more affordable for patients but also alleviate the financial burden on healthcare systems.

Ustekinumab approval – A recent development emphasizing continuing trends

This week, Biocon Biologics received approval from the U.S. FDA for its ustekinumab biosimilar, YESINTEK™ (ustekinumab-kfce), marking a significant milestone in the biosimilar landscape. This approval adds to the growing list of ustekinumab biosimilars, providing more treatment options for patients with autoimmune diseases.

Ustekinumab, a sizeable opportunity:

Ustekinumab, marketed as Stelara by Johnson & Johnson, is a blockbuster drug with annual sales of $10.85 billion in 2023. Stelara is approved for multiple indications, including moderate to severe plaque psoriasis, psoriatic arthritis, Crohn’s disease, and ulcerative colitis.

Robust portfolio of biosimilars waiting for the gates to open:

The USFDA has now approved six biosimilars for Ustekinumab.  While the first to cross the regulatory milestone was Amgen’s approval in October 2023, five other biosimilars have since been approved. The first approval clinched by Amgen also includes the interchangeability designation implying potential for pharmacy switching and relatively more rapid conversion from innovator to biosimilars.

Europe: As with most biosimilars, the European Medicines Agency (EMA) has also been active in approving ustekinumab biosimilars, often ahead of the USFDA, reflecting a trend of earlier launches in the EU. Amgen, Alvotech and Samsung biosimilars are approved in the EU as well.  Additionally, Celltrion has also snagged EMA approval for an usketinumab biosimilar and has already launched the product as well in EU:

• Uzpruvo: Developed by Alvotech and marketed by STADA Arzneimittel, Uzpruvo was approved by EMA on November 9, 2023.
• Pyzchiva: Developed and manufactured by Samsung Bioepis, Pyzchiva was approved by EMA on February 22, 2024.
• Wezenla: Developed by Amgen ABP, Wezenla was approved by EMA on April 25, 2024.
• Steqeyma: Developed by Celltrion, Steqeyma was approved by EMA on August 26, 2024.

Competition is only likely to intensify in the near future. Notable late stage candidates include Celltrion awaiting US approval, Biocon awaiting EU approval and Bio-Thera both US and EU approval.

The Ustekinumab story spotlights key continuing trends in biosimilars

1. Patent Litigation Led Delay in Launch: A patent for Stelara, the innovator brand from Johnson & Johnson (J&J), US patent 6,902,734 expired on September 25, 2023. Both the USFDA Purple Book and Information both J&J list five other patents on stelara that expire between 2032 to 2039. Biosimilar entry in the US was expected on expiry of the 2023 patent but has been significant delayed on account of litigation and settlement of biosimilar producers with the innovator J&J. Patent litigation has significantly delayed the launch of biosimilars. The table below summarizes the delays and highlights the long stretch of 14 months from date of first biosimilar approval to first biosimilar launch in US.

2. Marketing Partnerships: The Ustekinumab biosimilar pipeline highlights the continuing focus on marketing partnerships in biosimilars. Most biosimilars approved have been partnered.  Complexities around marketing products not necessarily designated interchangeable, patent litigation and settlements with innovators, payor engagement for triggering uptake and other drivers continue to emphasize merit in marketing partnerships.  These partnerships marry development and manufacturing capability for complex biological products and commercial capability to navigate the fluid biosimilar market landscape. Samsung Bioepis has collaborated with Sandoz, Alvotech has partnered with Teva for the US market and with Stada for EU, Dong-A with Indian company Intas’ US subsidiary Accord and Formycon with Fresenius Kabi.
3. Interchangeability: USFDA’s willingness to grant interchangeability designation was evident in the first approval with Amgen’s ustekinumab biosimilar Wezlana being approved with the interchangeability designation. This trend would need to further expand for commercial momentum to catch up with global pipeline and for market potential to be actualized. This continues to be important only in the US with interchangeability now being a given in the EU.  While certain member states even earlier exercised this position that biosimilars were interachangeble, the clarification from EMA and the Heads of Medicines Agencies in September 2022 laid heterogenous practices to rest and established interchangeability as the norm across EU.
4. Formulation Innovation – No more a bastion of the innovator: Transtuzumab is a stark example of where formulation innovation helped innovator retain market share in several markets. While biosimilar developers launched intravenous formulations, the subcutaneous formulation from the innovator implied lower overall cost of administration.  Health economics linked to formulation innovation enabled innovator to thus retain market share and served as a barrier for biosimilar uptake.  In this context, biosimilar developers embracing complexity of formulation innovation is a very notable trend.
   In the case of Ustekinumab, both Fresenious and Formycon’s Otulfi and Samsung and Sandoz’s Pyzchiva are both approved in the subcutaneous format in addition to the intravenous format. This is a significant development.  Additionally, FDA has also provisionally determined that Pyzchiva would be interchangeable with the reference medicine as it is currently subject to an unexpired period of exclusivity for the first interchangeable biosimilar biological product. This positions the biosimilars competitive to foster wider uptake on launch.
5. Earlier EU Launch of biosimilars: The EMA has often approved biosimilars earlier than the USFDA, leading to earlier market entry in the EU. For instance, Samsung Bioepis’ Pyzchiva was approved in the EU months before its US approval. Litigation and settlement impact has also resulted in long periods of gap between an earlier EU launch and a significantly later US launch for several biosimilars. The saga plays out in Ustekinumab again.  While the earliest US launch will be in January 2025, biosimilars are already launched in EU in the second half of 2024.  Notably, this also includes Celltrion’s biosimilar that was launched in Germany and Netherlands in November 2024 but is not yet even approved by USFDA.

Looking Ahead: Combination of niche as well as blockbuster opportunities

Biosimilars pipelines continue to be strengthened globally with near term opportunities such as denosumab as well as blockbusters such as pembrolizumab that are further away but too large to miss.  Patents on Amgen’s Prolia (denosumab) are expected to expire around 2025 – 2026 but market size remains moderate with a 2023 revenue of around $2.7 billion. Further ahead are blockbusters such as Merck’s Keytruda (pembrolizumab) whose patents are set to expire in 2028, a year when peak sales forecast are over $33Bn.

Approval of Biocon’s YESINTEK™ underscores the dynamic nature of the biosimilar market.  While the future is promising, it is not bereft of complexity and calls for deft navigation of the development and commercial landscape. Strategic choices around portfolio composition, partnerships and commercial roadmap will all have significant bearing on threshold of success.

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