Novartis AG (ADR) (NVS) announced yesterday that the Food and Drug Administration (FDA) had accepted the Biologics License Application for filgrastim by Sandoz – the generics arm of Novartis. The acceptance is the first step towards ensuring that the drug which is similar to Amgen, Inc.’s (AMGN) Neupogen will be marketed in the US. The biosimilar version of Neupogen will serve as a cheaper alternative for cancer patients.
Neupogen is expected to generate about $1.17 billion or 6% of the company’s overall revenues for fiscal year 2014 (FY14). Amgen generated almost 77% of its revenues from the US in FY13. On the other hand, Novartis brings in 0.7% of its revenues from sales of biosimilars. Sandoz, with a 50% market share, leads the biosimilars market
Filgrastim is used to decrease the risk of infection in cancer patients undergoing chemotherapy.
Novartis has been selling its biosimilar, under the name of Zarzio, in 40 countries outside the US. The drug is a leading biosimilar worldwide, and is also the leading daily granulocyte colony-stimulating factor drug in Europe with a 30% market share. However, the US has been slow in devising approval processes for biosimilars as far as manufacturing of generics is concerned. This is because new regulations have to be drawn up for reproduction of biotech drugs, which can never be replicated exactly as their manufacturing requires the use of living cells. Hence, regulators have had to come up with new processes.
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