Mylan Rethinking Its US Business Strategy?

In reporting lower earnings on its second-quarter revenues, Mylan may have surprised industry observers by offering the possibility of some changes in strategic direction. Although Mylan executives sounded hopeful notes on the company’s biosimilar portfolio, the hints CEO Heather Bresch provided may affect the marketing of the biosimilars as well as its other pharmaceutical business.

Mylan CEO
Heather Bresch

Chief Executive Officer Heather Bresch said that Mylan’s generic drug business was the main reason for the declines in overall revenues, with adjusted gross profit from US business down 6% from the previous quarter last year. Sales revenues from North America as a whole were down 22% compared with an increase of 10% for the rest of the world.

On a conference call to announce the earnings, she noted that “our efforts to serve patients in the U.S. have been shaped by the industry’s transformation there, and our results and guidance for 2018 are directly correlated with the ongoing rebasing of the US healthcare environment.”

According to Rajiv Malik, President of Mylan, “This past quarter, Mylan continued to execute on its commitment to expand access to medicine through the advancement of our complex product portfolio across our global diversified platform. For example, we launched Fulphila™, our pegfilgrastim biosimilar, in the US, and CHMP issued a positive opinion for our biosimilar of Humira in Europe.”

The Board of Directors released its own statement, however, indicating that it may take a number of actions that could dramatically change the picture (though not specified, these could include selling off assets, seeking a merger, or restructuring the organization). In a press release, the Board said, “we believe that the US public markets continue to underappreciate and undervalue the durability, differentiation and strengths of Mylan’s global diversified business, especially when compared to our peers around the globe. Therefore, while we will continue to execute on our best-in-class, long-term focused sustainable strategy, the Board has formed a strategic review committee and is actively evaluating a wide range of alternatives to unlock the true value of our one-of-a-kind platform. The Board has not set a timetable for its evaluation of alternatives and there can be no assurance that any alternative will be implemented.”

Observers will be greatly interested in how Fulphila performs in the third quarter and beyond, particularly around the deep discount offered by Mylan. This could be a considerable shot in the arm to Mylan’s US revenues or simply a ratification of its opinion that the US health system is incentivized by higher prices.

 

Mylan’s Fulphila Pegfilgrastim Biosimilar Launches at Big Discount

The first pegfilgrastim biosimilar (Fulphila™) in the US has begun marketing, and Mylan/Biocon are offering a 33% discount to the wholesale acquisition cost (WAC) of the originator product Neulasta®. The Center for Biosimilars reported a communication from Mylan confirming the action. This is a watershed moment for the pegfilgrastim category and could signal the beginning of large savings opportunities for payers and patients.

At a WAC of $4,175 per syringe, the pegfilgrastim biosimilar may be very attractive to health plans and insurers. It is also assumed that this will effectively drive down the average sales price (ASP) of the category over time. The ASP includes the WAC as well as any rebates or discounts given by the manufacturers.

The pegfilgrastim biosimilar, like the reference drug, Amgen’s Neulasta, is approved to decrease the incidence of infection as manifested by febrile neutropenia in patients receiving myelosuppressive chemotherapy.

Although patent litigation between the partners and the maker of the originator product (Amgen), Mylan/Biocon have decided to launch at risk. This means that if the District Court sides with Amgen, Mylan’s could face large financial penalties, including profits on the sales of the biosimilar.

Pfizer Gets FDA’s Green Light on Its Filgrastim Biosimilar

Pfizer's Biosimilar Filgrastim
FILE PHOTO – The Pfizer logo is seen at their world headquarters in Manhattan, New York, U.S., August 1, 2016. REUTERS/Andrew Kelly/File Photo

On July 20, the US Food and Drug Administration (FDA) approved the second biosimilar version of filgrastim. Pfizer’s filgrastim biosimilar is named Nivestym™ (filgrastim-aafi).

The originator product, Amgen’s Neupogen®, has steep competition from two other products (Sandoz’s Zarxio® [filgrastim-sndz] and Teva’s Granix® (tbo-filgrastim]). Granix was approved as a follow-on biologic, before the biosimilar pathway was implemented.

The FDA granted Nivestym the following indications:

  • To decrease the incidence of infection, as manifested by febrile neutropenia, in patients with nonmyeloid malignancies receiving myelosuppressive anti-cancer drugs associated with a significant incidence of severe neutropenia with fever.
  • For reducing the time to neutrophil recovery and the duration of fever, following induction or consolidation chemotherapy treatment of patients with acute myeloid leukemia (AML).
  • To reduce the duration of neutropenia and neutropenia-related clinical sequelae, e.g., febrile neutropenia, in patients with nonmyeloid malignancies undergoing myeloablative chemotherapy followed by bone marrow transplantation (BMT).
  • For the mobilization of autologous hematopoietic progenitor cells into the peripheral blood for collection by leukapheresis.
  • For chronic administration to reduce the incidence and duration of sequelae of severe neutropenia (e.g., fever, infections, oropharyngeal ulcers) in symptomatic patients with congenital neutropenia, cyclic neutropenia, or idiopathic neutropenia.

Although a launch date was not announced for Pfizer’s filgrastim biosimilar, the company’s press release stated that “Nivestym is expected to be available in the US at a significant discount to the current wholesale acquisition cost (WAC) of Neupogen.”

Rather than competing aggressively for the filgrastim market, Amgen seems to be focusing its efforts on its pegfilgrastim brand, a longer-lasting version. Specifically, it is seeking to move its utilization to the Onpro formulation of Neulasta®. The first biosimilar to pegfilgrastim was approved in June (Mylan and Biocon’s Fulphila™).

Mylan and Biocon Land First Pegfilgrastim Biosimilar Approval

The race to bring a pegfilgrastim biosimilar to market officially started on December 17, 2014. The checkered flag fluttered 3½ years later on June 4, 2018, with the Mylan/Biocon team winning on a slow track. The partners earned approval from the US Food and Drug Administration (FDA), becoming the first biosimilar to challenge for this $4 billion market.

Mylan will market the product in the US, and it is assumed that the product will be launched shortly,= to take advantage of their window of opportunity. The drug will be called Fulphila™, and the FDA assigned a formal name of pegfilgrastim-jmdb. The next likely competitor, Coherus, is expected to receive word from the FDA by November 2. Mylan will have the chance to quickly grab marketshare if they produce attractive deals for payers.

Convincing Two Main Providers the Key to Pfizer’s Retacrit® Success

An unusual market situation awaits Pfizer’s new biosimilar epoetin, one that few approved medications has to face. Not only does Retacrit® need to pass muster with payers like health plans and insurers, which we assume it will, but Retacrit will need to be accepted by the two 800-pound gorillas of the kidney dialysis field as well.

epoetin use in kidney centersRetacrit and Dialysis Centers

The different part of this discussion is that providers are not usually so concentrated except in the treatment of the rarest diseases. Cancer medications are utilized by independent treatment centers throughout the country. Biosimilar agents like infliximab are also used throughout the nation by hospitals, large medical groups, and solo practices. In the case of epoetin, its primary use is in anemia related to kidney dialysis. The vast majority (85%) of kidney dialysis centers are owned by one of two networks, Fresenius Medical Care North America and DaVita Kidney Care. According to a report by Healio, Fresenius accounted for 42.6% of the total patient market in 2017, and DaVita is just behind, with 42.0% of the 453,000 patients receiving dialysis services. In other words, get buy-in from these companies and the payers, and Pfizer would have a chance to gain significant share of the epoetin market.

kidney dialysis centers
Source: https://www.healio.com/nephrology/practice-management/news/online/%7Bd894132b-b577-435e-8dec-401cd89d1b1e%7D/the-largest-dialysis-providers-in-2017-more-jump-on-integrated-care-bandwagon

Nephrologists seem to be onboard, in general. The results of national survey of nephrologists conducted in March 2018 confirm this. According to the research, only one in five respondents would be averse to switching to the biosimilar. One barrier to use may exist, however, on the provider side. The long-acting agents may be preferred by some. These include Amgen’s darbepoetin alfa (Aranesp®) and Roche’s Mircera® (methoxy polyethylene glycol-epoetin beta). To the extent that nephrologists may be less willing to use short-acting biosimilar instead of the more expensive long-acting brand may define Pfizer’s success with Retacrit. This is somewhat similar to the situation brewing with the use of injectable biosimilar pegfilgrastim (once approved and available) and the Neulasta® Onpro® delivery system. The share of use of the long-acting erythrocyte-stimulating agents has been increasing.

On May 15, 2018, Pfizer’s epoetin biosimilar Retacrit was approved by the Food and Drug Administration (FDA), the first biosimilar competitor to Epogen® and Procrit®. Retacrit is not officially available yet.

In other related biosimilar newsPfizer announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has recommended marketing approval for its biosimilar version of trastuzumab.

Apotex and its Apobiologix division has claimed a significant prize—the first pegfilgrastim biosimilar approval in Western markets. None have been approved in the US or EU to date. Health Canada granted marketing authorization to the company on June 1. The new drug will be called Lapelga™.

What Is the Biosimilar Pegfilgrastim Market Opportunity?

We’ve covered the contest to bring a biosimilar pegfilgrastim to market, with considerable depth. The progress and setbacks of Mylan/Biocon, Coherus Biosciences, Sandoz, and Apotex have been tracked. Other drug makers are also working on plans towards 351(k) applications for approval. Eventually—likely sooner than later—one or two will hit the market.

Biosimilar Pegfilgrastim, Neulasta®, and Onpro®

Amgen, maker of the originator product Neulasta®, disclosed in its first-quarter financial report that the total sales for the product in the US is $1.0 billion, $146 million for the rest of the world, for a total of $1.15 billion. This means a US market of approximately $4 billion for one year of sales. Amgen also noted that 62% of its first-quarter Neulasta sales are associated with its Onpro® kit. Although the major patents for pegfilgrastim have expired, Onpro is still protected by patent. Onpro does have some significant advantages in that the patient does not need to go to the doctor’s office for an injection after receiving chemotherapy. The sales figures indicate that doctors prescribe it in preference to the injectable form of pegfilgrastim.

Neulasta OnproAt a current 62% marketshare for Neulasta Onpro, the initial total slice of the pie available for biosimilars may only be $1.5 billion (not considering WAC discounts). If we assume a 20% discount, this may be closer to $1.2 billion. It may not seem logical for Amgen to make great efforts to defend its share of injectable pegfilgrastim because of its successful conversion to Onpro. Also, Onpro does have marketable advantages over the injectable form.

The list price of Neulasta is upwards of $7000 per injection, and Amgen does not charge additionally for the Onpro kit. This stance may prove an incentive to health plans and insurers to not encourage biosimilar use over Onpro.

Will Physicians Resist Moving From Onpro to a Biosimilar Pegfilgrastim Injection?

The $1.2 billion to $1.5 billion estimate also assumes that Amgen cannot convert more patients to Onpro prior to approval of a new biosimilar. That would further shrink the revenue opportunity. Physicians may also resist payer efforts and not prescribe the injectable form if they favor the Onpro kit. To the extent that payers may prefer the biosimilar (or otherwise restrict the use of a more expensive originator agent) when it becomes available, that slice of the pie could increase quite a bit. Furthermore, the picture could also change in a few years as biosimilar manufacturers develop delivery systems that gain the same advantages as Onpro.

In its earnings report, Amgen indicated the sales of Neulasta have been decreasing, by 5% from the same quarter last year. This may be the result of movement to other, less-toxic cancer chemotherapies or other treatments to prevent neutropenia and its related infections.

The Onpro market for the rest of the world may be given a boost soon, as Amgen also announced that the European Medicines Agency issued a positive opinion for the drug maker to include the Onpro Kit in its EU label.

As reported in BR&R, Coherus CEO Denny Lanfear thought the pegfilgrastim market may be split in a manner similar to that for filgrastim (i.e., 30%/30%/40% shares for 2 biosimilar makers and the originator). That may possibly mean 30% of a $1.2 billion US market (not $4 billion), if payers do not emphasize the use of the biosimilar over Onpro.

Pfizer Gets Green Light From the FDA on Epogen® Biosimilar

It has taken a long time, but Pfizer finally earned approval from the U.S. Food and Drug Administration (FDA) on the first biosimilar version of Epogen®. The drug, Retacrit® (epoetin alfa-epbx), had originally been submitted for approval in December 2014. Its much stalled road to approval is finally at an end.

After an initial rejection, the FDA’s Advisory Committee voted overwhelmingly (14–1) in May 2017 to give the product a green light. However, the FDA changed the traffic light to red, issued a second complete response letter in June 2017, citing issues with its manufacturing plant in McPherson, Kansas (a plant Pfizer inherited with its acquisition of Hospira).

Retacrit is approved for the treatment of anemia caused by chemotherapy or chronic kidney disease, for use in patients taking zidovudine for the treatment of HIV infection, and to reduce the need for red-cell blood transfusions before, during, or after surgery.

This is the 10th biosimilar approved by the FDA, and Pfizer is expected to shortly launch only the fourth biosimilar agent. Epogen’s patent has long expired, and it was one of the first biosimilars approved in Europe (in 2007). Retacrit has been marketed in the EU for over 10 years. It is one of four biosimilar epoetin products available overseas.

In other biosimilar news… Mylan’s earnings call on May 9 produced little clarity on the fate of its upcoming FDA decision on its pegfilgrastim biosimilar. Although CEO Heather Bresch believes that its product will represent one of its most important launches of the year, she could not shed any light on partner Biocon’s response to the FDA’s critical review of its manufacturing facility. The PDUFA date is June 4; a positive decision means that Mylan/Biocon will have beaten the competition to the market for this important biosimilar product.

Coherus Biosciences Reaffirms Its Pegfilgrastim Biosimilar Hopes

Coherus Biosciences expects to have an approval decision on its pegfilgrastim biosimilar from the Food and Drug Administration by November 3, 2018. On a quarterly investor call on May 10, Chief Executive Officer Denny Lanfear also related that an approval decision from the European Medicines Agency (EMA) on this product is expected by June 28, 2018. “In the meantime, he said, we will continue building product inventory and establishing our commercial infrastructure to ensure a successful product launch.”

Biosimilars Review & Report; BR&R; pegfilgrastim biosimilarsThe conference call highlighted several notable items, including a distinct focus on the US market over the EU, primarily because of the latter’s reliance on a tender system. James Hassard, Senior Vice President, Market Access, explained that the tender system magnifies the competitive nature of biosimilar pricing. Individual countries, he said, because of their specific systems and environments can still be attractive. Mr. Hassard pointed to Scandinavia as a potential European target.

In addition, Mr. Lanfear noted that the $4 billion US market for pegfilgrastim in the US is far larger than that in Europe (< $1 billion). As a result, Coherus will likely seek a partner to help commercialize its biosimilars outside of the US, while tackling the American market itself.

The executives announced another hopeful sign for actual approval of CHS-1701—the FDA and EMA have already passed preapproval inspections of the manufacturing facilities. This could address some of the issues that have tripped up other biosimilar drug makers.

Mr. Hassard believes that Mylan will also receive approval for its delayed pegfilgrastim biosimilar around the same time as Coherus. Rather than plan for a first-to-market launch, he said they were anticipating a launch in a competitive space. “There’s a great deal of room for both us and multiple players. Our plans have always incorporated multiple players. A good example is Zarxio® and Granix®,” he said. “They’ve experienced significant success and have taken about 30% market share each.,” he said. Nonetheless, “We have plans in place to enable us to meet that level of demand even if we are the only biosimilar on the market.”

In addition, Coherus reported progress on the phase 3 clinical development of its adalimumab (CHS-1420) and etanercept (CHS-0214) biosimilars, although timing of its 351(k) submissions are not anticipated soon. The company pointed to extended patent life (adalimumab and etanercept) and lack of commercialization partners (etanercept) for delaying these filings.

Coherus Biosciences Shows Major Stock Gain Upon BLA Resubmission

When it received a June 2017 complete response letter from the Food and Drug Administration (FDA), the outlook for Coherus Biosciences was cloudy. Its lead product, a biosimilar for pegfilgrastim (CHS-1701), had been cited for the way the drug maker evaluated immunogenicity and for manufacturing plant issues. Upon receiving the news, it cut 30% of its workforce.

Furthermore, Coherus has had little luck in challenging the existing patents of originator products. It was denied inter partes review on a key patent held by Abbvie on Humira® as well as a patent on Enbrel® by Amgen.

Today, Coherus may be on the verge of a turnaround in fortunes

Armed with new immunogenicity data, Coherus resubmitted its 351(k) application with the FDA on May 3, and investors reacted strongly to its new prospects. The company’s stock price soared 17.3% for the dCoherus Biosciencesay, closing at $14.90. Its previous 52-week low was $8.05. Coherus is a U.S. manufacturer that is focused solely on biosimilar development (a “pure-play” biosimilar maker).

In the company’s announcement, Coherus reported that the new FDA application is “supported by similarity data from analytical, pharmacokinetic, pharmacodynamics, and immunogenicity studies comparing CHS-1701 and Neulasta and integrates new immunogenicity data obtained from using a more revised immunogenicity assay.” Mr. Lanfear said, “The CHS-1701 BLA resubmission marks a significant milestone in our ongoing transition to a commercial company as we tightly focus on execution of our strategic plan.”

In April, Coherus filed for a rehearing of the etanercept inter partes review.

Coherus originally filed its pegfilgrastim biosimilar application with the European Medicines Agency November 29, 2016. According to a report from early in 2018, Chief Executive Officer Denny Lanfear asserted that he hoped to receive EMA approval in the second half of 2018.

Is Physician Resistance to Biosimilars Dissipating?

We tend to think of challenges to uptake of approved and marketed biosimilars coming from three areas: (1) the reference product manufacturers, (2) the physicians, and (3) the patients. The patent mazes and rebating strategies characterize the first, and patient advocates’ questions about nonmedical switching describe the last. Physician resistance, however, seems to be on the wane.

I was pleasantly surprised by conversations with health system chief medical officers and medical group administrators speaking about biosimilar implementation and adoption at the annual meeting of the American Medical Group Association last week in Phoenix. If this is any indication, the iPhysician resistance to biosimilars decreasingnitial trepidation of US physicians in using biosimilars in treatment-naïve patients is melting away. Medical society endorsement of the effectiveness of biosimilars and promises of significant cost savings seem to be convincing arguments on physician side. Of course, switching of a reference medication for a biosimilar in a patient established on treatment with the reference product remains another story.

Some of the physicians came to learn about biosimilars rather than share their experiences. They may or may not have been aware of the extensive European experience with specific biosimilar agents and drug classes, but they were willing to accept that (1) if the Food and Drug Administration (FDA) had approved the biosimilar, they expect it to be safe and effective and (2) that extrapolation would not be an issue if FDA approved the label. The use of biosimilars for nonapproved indications would be left up to individual physicians (and payers’ prior authorization systems).

It was clear that the potential of biosimilars to save their patients money was of paramount importance. This may signal a changing view that issues regarding safety and efficacy of approved biosimilars will be preempted by the need to address economic needs in initial prescribing for new patients.

There is also an indication that large medical groups and some health systems are willing to leave the decision making to the Pharmacy and Therapeutics Committee. If the P&T Committee places the biosimilar on the formulary, and it is a savings for their new patients, the biosimilar will be used. That also means that biosimilar adoption at this level will be seriously aided by the use of lower cost-sharing tiers for biosimilars. In other words, a separate biosimilar tier that requires less copayment or coinsurance than the reference product could be a real boost to patient use.

In other biosimilar news…Michigan’s governor has signed legislation making it the 37th state to expand its pharmacy laws to allow interchangeable biosimilar substitution. Now if there were only an interchangeable biosimilar to substitute!

Coherus Biosciences announced that it believes that it will obtain FDA approval and commercial launch for its delayed pegfilgrastim biosimilar in the second half of 2018, along with European approval during the same timeframe.

Pfenex disclosed that it is seeking partners for its own pegfilgrastim biosimilar, in addition to its biosimilar candidate to Lucentis®. Its stock price has taken a steep jump in recent weeks, rising to over $6 a share (from $4) since the beginning of March.