The uncertainty surrounding the fate of Merck KGaA’s biosimilars unit has been resolved, as Germany-based Fresenius Kabi will buy the division for up to €670 million ($729 million).
At a press conference in March, Merck chief executive officer Stefan Oschmann confirmed that the company was in “deep talks” to sell the division to a then-undisclosed buyer. At the time, he suggested the biosimilars arm was worth around $1 billion due to a robust pipeline of drugs in various stages of trials, although none have yet reached the market.
This pipeline, along with the biosimilars division’s approximately 70 employees based in Switzerland, will be acquired with the newly announced purchase, according to a press release from Fresenius Kabi. The development portfolio is focused on biosimilar versions of drugs used to treat cancers and autoimmune disorders, the branded reference drugs of which currently sell for about $30 billion annually.
“The acquired biosimilars assets are an attractive opportunity for Fresenius Kabi to enter this strongly growing and highly profitable segment,” said CEO Stephan Sturm in the press release. Chief executive Mats Henriksson added that the deal will allow the company to “enhance its position as a leading player in the injectables pharmaceutical market and further diversifies its product portfolio.”
Looking to the future, the company anticipates sales to begin by the end of 2019 and grow to the “high triple-digit million” range from 2023 onwards. It will pay Merck single-digit percentage royalties determined by sales of the acquired drugs. Upon closing the deal, Merck will receive €170 million in cash, while the remaining €500 million will be distributed as “milestone payments strictly tied to achievements of development targets.”
Citing the high costs of clinical trials and regulatory requirements, Fresenius Kabi indicated that it does not expect to break even on its €1.4 billion purchase and investment ceiling until 2022, but hopes it will become profitable for the company and its shareholders by the following year.
A statement from Merck KGaA described the divestment as a “major step towards strategic alignment of [research and development] resources to healthcare priorities.” It also mentioned that the deal included agreements to ensure continuity through development support and manufacturing services.
“We have increasing confidence in our Biopharma pipeline and this transaction will help prioritize innovative drug development of high quality and first-to-market best-in-disease assets,” said executive board member Belén Garijo in the statement. “The partnership with Fresenius will allow us to exploit our biosimilars portfolio to full potential while granting us a substantial return on prior investments.”
The press release from Fresenius Kabi also announced its impending acquisition of Akorn, Inc, which sells prescription and over-the-counter products in the United States, at a price tag of $4.3 billion.
Julie Reed: Why 2024 Is Important for Biosimilars
April 17th 2024Julie Reed, executive director of the Biosimilars Forum, showcases how the biosimilar industry is expected to develop throughout 2024, including major policy changes and hope for continued improvement in market share for adalimumab biosimilars.
Alvotech’s Stelara Biosimilar, Selarsdi, Receives FDA Approval
April 16th 2024Alvotech’s Selarsdi (ustekinumab-aekn), a biosimilar referencing Stelara (ustekinumab), gained FDA approval, making it the second ustekinumab biosimilar and second for the company to be given the green light for the American market.
Decoding the Patent Puzzle: Navigating the Legal Landscape of Biosimilars
March 17th 2024On this episode of Not So Different, Ha Kung Wong, JD, an intellectual patent attorney and partner at Venable LLP, details the confusing landscape that is the US patent system and how it can be improved to help companies overcome barriers to biosimilar competition.
BioRationality: Removing the Misconceptions Surrounding Interchangeability
April 15th 2024Sarfaraz K. Niazi, PhD, outlines the current state of interchangeable biosimilars in the US and policy changes needed to clear up misconceptions surrounding the meaning behind interchangeability designations.
Sintilimab, Bevacizumab Biosimilar, HAIC Improves Survival in Patients With Unresectable HCC
April 14th 2024Positive results of sintilimab, IBI305, and hepatic arterial infusion chemotherapy (HAIC) treatment showed shrinking tumors and previously converting inoperable hepatocellular carcinoma (HCC) to resectable HCC with manageable adverse effects.