Bio Tech
The biotech sector is witnessing changing dynamics with the focus shifting from large caps to smaller companies with high growth potential. Several big biotech players are being weighed down by pricing pressure and are feeling the threat of biosimilars.
Pricing concerns in the biotech industry surfaced toward the end of last year after pharmacy benefit manager Express Scripts (ESRX - Analyst Report) entered into an agreement with AbbVie Inc. (ABBV - Analyst Report) adding the latter’s lower priced Viekira Pak to its formulary, as an exclusive option for patients suffering from genotype 1 hepatitis C virus (HCV) infection. With this move, the leading pharmacy benefit manager removed Gilead Sciences Inc.’s (GILD - Analyst Report) high-priced Sovaldi and Harvoni and Johnson & Johnson’s (JNJ - Analyst Report) HCV drug Olysio from its National Preferred Formulary.
Since then, Gilead has entered into agreements with several pharmacy benefit managers and health care service companies. It even went on to state on its fourth quarter earnings call that it is undertaking several pricing measures including an increase in discount, charge back and rebates.
In the mean time, the first biosimilar has been approved in the U.S. Sandoz - a Novartis company (NVS - Analyst Report) - gained approval for Zarxio, a biosimilar version of Amgen’s (AMGN - Analyst Report) blockbuster drug, Neupogen. Several other companies including Hospira (HSP - Analyst Report) are looking to introduce biosimilars in the U.S.
Earlier this year, Hospira announced that it has submitted a Biologics License Application looking to get Retacrit (a biosimilar to Epogen and Procrit) approved in the U.S. Hospira already markets several biosimilars in Europe including Retacrit and Nivestim (a biosimilar to Neupogen).
Attracted by its lucrative biosimilars portfolio and pipeline, which is potentially worth multi-billion dollars, Pfizer (PFE - Analyst Report) has entered into an agreement to acquire Hospira in a deal valued at approximately $17 billion.
According to Pfizer, the worldwide biosimilars market is expected to be worth approximately $20 billion by 2020. Introduction of biosimilars is expected to directly affect the market for branded biotech drugs and eat into their share.
In such a scenario, biotech companies with newer therapies or interesting pipeline candidates have been attracting a lot of attention. Big players are resorting to merger and acquisition (M&A) deals and licensing activity to bolster their beleaguered pipelines. Last month, AbbVie entered into an agreement to acquire Pharmacyclics in a deal valued at approximately $21 billion to gain partial rights to Imbruvica. Imbruvica is expected to generate U.S. net product revenues of approximately $1 billion in 2015.
Related video



![]() |
BioTech Pharmacal - D3-5 (5,000 IU) - 250 Count Health and Beauty (BioTech Pharmacal)
|



![]() |
BioTech Pharmacal - A-25 (Vitamin A) - 100 Count Health and Beauty (BioTech Pharmacal)
|
![]() |
BioTech Pharmacal - DIM (100mg) - 100 Count (FFP) Health and Beauty (BioTech Pharmacal)
|


