First Copy of J&J’s $6 Billion Remicade Wins EMA Backing
(Corrects 11th paragraph to clarify that Hospira’s biosimilar is called Inflectra in story published June 28.)
Celltrion Inc. (068270) and Hospira Inc. (HSP) won European backing to sell the first copies of Johnson & Johnson (JNJ)’s Remicade, a $6 billion arthritis therapy, as regulators open the door to cheaper versions of the world’s best-selling medicines.
The European Commission should give the two companies approval to market their versions, called Remsima and Inflectra, for the same medical conditions for which Remicade is marketed, the European Medicines Agency said in a statement today.
Remsima and Inflectra are the first biosimilar versions of a monoclonal antibody, a biotechnology medicine produced using the body’s own cells, to be recommended in a major market, according to Bloomberg Industries. Remicade is New Brunswick, New Jersey-based J&J’s top-selling product. The decision clears the way for biosimilar versions of other monoclonal antibodies, which account for some of the world’s best-selling medicines.
“This is a landmark occasion, not just for Celltrion, but also for others developing biosimilar monoclonal antibodies,” said Asthika Goonewardene, an analyst for Bloomberg Industries in London.
Shares of Incheon, South Korea-based Celltrion rose 6.8 percent to close at 41,800 won in Seoul before the EMA announcement. Hospira rose 3.5 percent to $37.42 as of 9:53 a.m. in New York.
Remsima and Inflectra are recommended as treatments for rheumatoid arthritis, ulcerative colitis, ankylosing spondylitis, Crohn’s disease, psoriasis, and psoriatic arthritis, the EMA said.
“The price of Remsima will be more than 30 percent cheaper than those of the original drugs,” Kim Hyoung Ki, senior vice president and chief financial officer at Celltrion, told reporters in Seoul today. “We’re confident in Remsima as it has price competitiveness, while it has the same effect as the original drugs.”
Even with regulatory approval, doctors may resist using the untested biosimilars, Ronny Gal, an analyst at Sanford C. Bernstein & Co., said in a note to investors today.
“The task is now at hand to convince skeptical physicians to change their mind,” Gal said, citing conversations with gastroenterologists.
J&J has extended Remicade’s patent protection to February 2015 in the majority of European Union countries, meaning that Celltrion and Lake Forest, Illinois-based Hospira will introduce Remsima in a limited number of markets in 2014, Mark Purcell, an analyst at Barclays Plc, said in a note to investors yesterday. Remicade has U.S. patent protection until September 2018, according to J&J.
Remicade is also protected by secondary patents, and J&J and partner Merck & Co. (MRK) may initiate a patent infringement case against Hospira and Celltrion should they introduce Inflectra and Remsima in Europe, Purcell said. Under an optimistic scenario, the biosimilar could generate $560 million in Europe sales, he said.
Other biologics manufacturers have taken steps to block approval of biosimilars. AbbVie Inc. (ABBV) asked the U.S. Food and Drug Administration last year to reject any biosimilar of its rheumatoid arthritis drug Humira because approving a copy would require the FDA to disclose Humira-related trade secrets. The drug had $9.27 billion in sales last year, making it the world’s best-selling medicine.
Celltrion is also developing a biosimilar version of Roche Holding AG’s best-selling Rituxan drug for rheumatoid arthritis. Other companies working on Rituxan copies are Boehringer Ingelheim GmbH and Novartis AG.
The EMA’s recommendations are the final stage before the European Commission, the European Union’s executive arm, approves or rejects a drug for sale to patients in the 27-nation region.
To contact the editor responsible for this story: Phil Serafino at email@example.com