Merck to Spin Off Company That Will Include Its Biosimilar Marketing in 2021

On February 5, Merck announced that it will create a new spinoff that will include its biosimilar business with Samsung Bioepis as well as its legacy pharmaceuticals (e.g., Zetia®, Vytorin®, and other widely diversified brands). In its press release, Merck emphasized that the as-yet unnamed new company will also have a strong focus on women’s health.

Merck CEO Kenneth Frazier

Merck has an agreement with Samsung Bioepis to market the latter’s infliximab biosimilar Renflexis®, trastuzumab biosimilar Ontruzant®, and its etanercept biosimilar Brenzys®, which is available outside the US only.

This new firm will take the lessons learned from its commercialization experience with Samsung Bioepis to help it expand: The Merck spinoff will “pursue opportunities to partner with biopharmaceutical innovators looking to commercialize their products by leveraging [the new company’s] scale and presence in fast-growing international markets.” Merck expects that 75% of the revenues of the spinoff will come from the global markets.

The three Merck biosimilars reached global sales of $300 million, as reported by the Wall Street Journal. Interestingly, Merck earned $411 million in 2019 from sales of Remicade in the EU (which it markets as part of an agreement with Johnson & Johnson). This is down from $582 million for the previous year. Our call to Merck regarding whether Remicade marketing will be under the new entity was not immediately returned.

According to Chairman and Chief Executive Officer, Kenneth C. Frazier, this move will allow the parent company to focus its “key pillars of oncology, vaccines, hospital. and animal health,” including its highly profitable Keytruda® cancer brand and innovative research and development. Once the new organization is created in the first half of 2021, it will be based in New Jersey.

“Over the past several years, we have purposefully shifted the focus of our efforts and resources to our best opportunities for growth.” Mr. Frazier continued, “Given the opportunities now in front of us, we believe we can benefit from even greater focus.”

Samsung Bioepis Signals a Settlement With Genentech on Herceptin Biosimilar

And then there was one. Samsung Bioepis and Genentech filed a motion in District Court to drop all pending patent litigation regarding Ontruzant®, an approved Herceptin® biosimilar. A Joint Stipulation of Dismissal is usually the confirmation that a licensing agreement has been reached.

This leaves one remaining approved trastuzumab biosimilar maker that has not settled with Genentech (a subsidiary of Roche). Amgen’s product Kanjinti®, which was the last trastuzumab biosimilar approved (in June), is the last of 5 approved agents that is not yet subject to a Genentech agreement. The other manufacturers, Mylan/Biocon, Teva/Celltrion, Pfizer, and now Samsung Bioepis, will likely pay a royalty to Genentech whenever their products are launched.

Launch dates have not been announced (nor have the terms of these agreements) for any Herceptin biosimilar. However, the principal patent for Herceptin® has expired, so biosimilar competition should be available before the end of the year.

In other biosimilar news…Coherus Biosciences announced that it has manufactured its 400,000th dose of its pegfilgrastim biosimilar Udenyca®. Additionally, its unaudited second quarter earnings seem to indicate positive movement, as much as $84 million (more than doubling first-quarter earnings of $37 million).

Samsung Bioepis Scores FDA Approval of Ontruzant, the Third Biosimilar Trastuzumab

The US Food and Drug Administration (FDA) announced on January 18, 2019 the approval of a new biosimilar version of trastuzumab. Produced by Samsung Bioepis, this agent was dubbed Ontruzant (trastuzumab-dttb).

This is the third trastuzumab biosimilar approved by the FDA, following those by Mylan and Biocon in December 2017 (Ogivri®) and Teva and Celltrion last month (Herzuma®). As with biosimilars other than Herzuma and the reference biologic Herceptin®, this agent is approved for use in the treatment of HER2-overexpressing breast cancer and the treatment of HER2-overexpressing metastatic gastric or gastroesophageal junction adenocarcinoma. Herzuma is not approved for the latter indication.

As with Renflexis®, Samsung Bioepis’ first FDA-approved biosimilar, Merck will market the product in the US when launched. No launch date has yet been revealed.

Mylan and Biocon had signed a licensing agreement with Roche, the manufacturer of Herceptin, which ended their patent fight, but which delayed launch. Teva and Celltrion have not yet disclosed whether a similar deal has been reached with Roche. Pfizer has an investigational trastuzumab biosimilar, and they too have signed a licensing agreement with Roche.