NEW YORK--(BUSINESS WIRE)--The U.S. Food and Drug Administration has approved the first drug in the U.S. that was developed through the recently established biosimilar regulatory pathway, clearing the way for competition in that arena to commence, according to Fitch Ratings.
The drug Zarxio is a similar version of the reference biologic, Neupogen (filgrastam) and was approved last week for all of the same indications as Neupogen. This will allow Zarxio to compete with Neupogen on all therapeutic fronts, providing the broadest market opportunity possible. Neupogen generated roughly $839 million in U.S. sales for Amgen during 2014.
Zarxio's approval marks the beginning of a relatively new competitive dynamic in the U.S. biologics market, with the most notable exception being the domestic human insulin market. Fitch expects other firms to pursue biosimilar versions of Neupogen and other biological therapeutics. However, given the costs of marketing and manufacturing biosimilars, the likely reservation of some physicians to prescribe them, and the expected moderately discounted pricing, Fitch believes market share shifts will be less rapid than in the traditional small molecule generic markets at the outset.
Sandoz has widely marketed Zarxio outside of the U.S. market as "Zarzio," so it has significant clinical and marketing experience with this product. In addition, of the many biologics currently marketed, filgrastam has a relatively straightforward chemical structure when compared to others biotherapeutics.
Pharmacists in the U.S. will not be able to automatically substitute Zarxio for Neupogen, so physicians will have to specifically prescribe Zarxio for a patient to receive it. Fitch expects that Zarxio will be priced competitively, relative to Neupogen, but not at the steep discounts that mark the traditional small molecule generic market. As such, Sandoz will have to make its case to physicians as well as third-party payors to prescribe and pay for Zarxio rather than Neupogen.
Fitch expects a relatively moderate but steady ramp of the U.S. biosimilar market during the next few years as acceptance in the medical community grows and competition expands. Both generic and branded pharmaceutical manufacturers are pursuing opportunities in this area, suggesting that there are above-average profitability opportunities in the near to intermediate term.
Additional information is available on www.fitchratings.com.
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