• Bone Health
  • Immunology
  • Hematology
  • Respiratory
  • Dermatology
  • Diabetes
  • Gastroenterology
  • Neurology
  • Oncology
  • Ophthalmology
  • Rare Disease
  • Rheumatology

Biosimilar Spinoffs: Organon Earnings and Sandoz' "Strategic Review"


In its first quarter of independence from Pfizer, Organon saw growth in biosimilars revenue; Sandoz' biosimilar portfolio has been touted as a growth driver amid talk of a spinoff from Novartis.

Organon, a Merck spinoff that officially started life in June 2021, reported $140 million in biosimilars revenue for the just-ended quarter, up 41% from the comparable 2020 third quarter. During the spinoff, Organon assumed Merck’s biosimilars portfolio and women’s health brand products, along with various other established brands.

In total, Organon had revenues of $1.6 billion in the quarter just ended, down 1% from the comparable year-ago quarter. Of that amount, net income from continuing operations was $323 million.

The company said results were in line with expectations. The double-digit growth in biosimilar revenue was driven by increased sales of the company’s infliximab product (Renflexis), which launched in 2017 and has seen sales growth in Canada in particular, Organon reported.

Ongoing sales of the trastuzumab biosimilar Ontruzant in the United States (launched July 2020) and Brazil were offset by sales declines in the European Union, which the company said were the result of competitive pressure and failure to maintain “tenders,” or contracts with health authorities in the European Union. Tenders are generally awarded through a competitive bidding process.

Organon, based in Jersey City, New Jersey, has a portfolio of more than 60 medicines and products. Eighty percent of its sales is derived from non-US sources. The company prefers to partner with originator drug companies to market their products, rather than developing its own. Organon has partnered with Samsung Bioepis (Republic of Korea) for the marketing of Renflexis, etanercept (Brenzys, Eticovo), bevacizumab (Aybintio), trastuzumab (Ontruzant), and adalimumab (Hadlima) biosimilars.

Although when it started life in June, Organon said it was not a research and development company, in tandem with its earnings announcement this week the company reported the acquisition of Forendo, a clinical-stage drug development company with a focus on novel medications for women’s health. “Forendo is pioneering the science of intracrinology, addressing disease through a novel, tissue-specific approach,” Organon said.

The company’s lead pipeline product is a treatment for endometriosis, a chronic condition that affects 1 out of 10 women of reproductive age, causing abdominal pain. The disease is associated with infertility.

Decision Time for Novartis

Another potential spinoff is in the works. Novartis announced late last month that it was considering its options related to the Sandoz brand, which encompasses a broad generic medicines portfolio, a number of launched biosimilars, and a pipeline of new biosimilars under development.

The announcement came with the third-quarter earnings report for Novartis, which revealed continuing earnings pressure for Sandoz. Novartis reported net sales of $13 billion, up 6%, for the third quarter of 2021, vs $2.4 billion for Sandoz, down 1%. With that announcement, Novartis said it had commenced a “strategic review” of its Sandoz holdings.

“We had stated that we wanted to create a more autonomous Sandoz within Novartis that would give us the optionality to ultimately determine whether Sandoz is best owned by Novartis or by our shareholders or another party,” Vas Narasimhan, CEO, stated in the company’s third quarter earnings call.

“We think Sandoz is well placed to capitalize on its growth drivers over the next decade, and we think Sandoz is also well placed to really be a leader in the next wave of biosimilars launches,” Narasimhan said.

He touted the division’s biosimilars pipeline of 15 product candidates, which he said could potentially achieve $3 billion in sales by 2025 and $5 billion by 2030. A completion of the strategic review is anticipated prior to the end of 2022.

Sandoz has 8 biosimilars launched globally: Omnitrope (somatropin; endocrinology), Erelzi (etanercept; rheumatology, dermatology), binocrit (epoetin alfa; oncology), Zarzio (filgrastim; oncology), Ziextenzo (pegfilgrastim; oncology), Rixathon (rituximab; oncology), Hyrimoz (adalimumab; rheumatology, gastroenterology, dermatology), and Zessly (infliximab; rheumatology, gastroenterology, dermatology).

In its earnings presentation, Novartis predicted a compound annual growth rate of 9% for its biosimilars portfolio and boasted that its biosimilars held global leadership shares. The company expects to launch 6 biosimilars in the United States and European Union “over the next few years,” which Richard Saynor, CEO of Sandoz, said would “start rapidly accelerating our business.”

Narasimhan said he believes that increasing interest in biosimilars in the United States will put a tail wind on Sandoz’ attempts to launch these products. “I think it’s a tremendous opportunity for the Sandoz business,” he said.

Related Videos
Lakesha Farmer from Cencora
Prerakkumar Parikh, PharmD
Cencora's Corey Ford
Brian Biehn
Chelsee Jensen, PharmD, BCPS
GBW 2023 webinar
Ryan Haumschild, PharmD, MS, MBA
Stephen Hanauer, MD, professor of medicine, Feinberg School of Medicine, Northwestern University,
Stephen Hanauer, MD, professor of medicine, Feinberg School of Medicine, Northwestern University,
Stephen Hanauer, MD
Related Content
© 2024 MJH Life Sciences

All rights reserved.