Merck KGaA Close to Selling Biosimilars Division to Undisclosed Buyer

German pharmaceutical company Merck KGaA has confirmed that it is far along in talks to sell off its biosimilars unit, which has not yet brought any drugs to the market.

Rumors began swirling in October, amid reports that Merck was seeking a buyer for its biosimilars unit. Chief executive Stefan Oschmann confirmed the reports at a press conference today, saying that Merck is in “deep talks” to sell off the division. He did not reveal the identity of the buyer or the selling price of the unit, but its worth is estimated at around $1 billion.

The prospective buyer to gain the division has not yet put a product on the market, but has built solid foundations for eventually becoming competitive. According to Merck’s website, the biosimilar portfolio is focused on therapies for cancers and inflammatory disorders. Last year, it began a phase 3 study of its proposed adalimumab biosimilar to compete with the branded drug, Humira, made by AbbVie. The trial results have not yet been released.

In 2015, Humira cost an average of $27,665 per year after discounts, an increase of almost 50% from its cost 3 years prior. Due to these high prices, it has become a popular target for drug companies hoping to market a less expensive biosimilar to patients with chronic plaque psoriasis. This opportunity means that a number of Merck’s competitors have already gotten a head start on developing a biosimilar for adalimumab.

Amgen’s Amjevita is the only adalimumab biosimilar to be approved by the FDA, but its launch has been delayed by legal roadblocks from AbbVie. Recently, Sandoz released data from phase 3 trials that showed its adalimumab biosimilar achieved the endpoints for demonstrating efficacy. Coherus had touted successful bioequivalence trial results in an announcement the week before.

According to Reuters, Merck began collaborating with India-based Dr. Reddy’s in 2012 to develop a host of potential biosimilars, including ones for adalimumab, rituximab (sold as Rituxan by Roche), and pegfilgrastim (sold as Neulasta by Amgen). The FDA has not yet approved biosimilars for the latter 2 drugs, although its European counterpart granted authorization to Celltrion’s rituximab biosimilar, Truxima, this February. Mylan and Biocon’s pegfilgrastim biosimilar application is currently under review by the FDA.

As Merck departs the increasingly crowded biosimilar market, it will likely concentrate its development efforts on multiple sclerosis to capitalize on the success of its interferon beta-1a injection, sold as Rebif.