Insulin glargine is a biosimilar of French drug maker Sanofi's top selling Lantus that had sales of around $5.3 billion in 2017, of which US constitutes around 55 percent.
Biocon and its partner Mylan who are in the race to sell insulin glargine in the US market will have one less competitor with Merck deciding to exit the product.
Merck’s partner Samsung Bioepis told stock exchanges earlier that the former had terminated the development and commercialisation agreement for a follow-on insulin glargine product. Merck said it had to pull the plug after assessing the current and future market for the product, including pricing pressure and the product’s cost.
The exit is only for the US market, the company didn’t specify its plan for Europe, where it markets the product.
Insulin glargine is a biosimilar version of French drug maker Sanofi's top selling Lantus that had sales of around $5.3 billion in 2017, of which the US constitutes around 55 percent. Insulin glargine is a long acting insulin that removes diabetic patients from administering multiple injections a day.
Merck had got tentative approval from the US FDA in July last year. A tentative approval means Merck either has to wait till the expiration of Lantus patents or has to legally invalidate the patents. But Merck chose the latter option triggering patent infringement litigation brought by Sanofi, leading to an automatic 30-month stay on launch.
Insulin glargine is a two player market in the US with innovator Sanofi and Eli Lilly-Boehringer Ingelheim’s biosimilar Basaglar competing with each other. Basaglar was launched in December, 2016 under a settlement with Sanofi.
While Lantus is the market leader, Basaglar has emerged as serious contender undercutting Sanofi domination with steep price cuts and replacing Lantus in formularies of major distributors like CVS and UnitedHealthcare.Will Merck’s exit benefit Biocon?
Biocon-Mylan’s Lantus biosimilar Semeglee was approved in the EU and Australia in March and were getting rolled out in those markets. Biocon has already launched the product in Japan through partner FUJIFILM Pharma and made the insulin glargine available in several emerging markets.
However, in the US the company has still some way to go. Sanofi responded to Biocon’s partner Mylan’s New Drug Application (NDA) with the FDA by filing patent infringement lawsuit. Mylan has challenged the petition.
The lawsuit isn’t the only challenge, Mylan-Biocon have received a Complete Response Letter (CRL) from the US FDA in June about a change in the manufacturing site for Glargine from Bengaluru to a new facility in Malaysia.
Analysts expect the pullout of Merck to be positive for Biocon, as the competition will be limited to three players in the US market.
“Unlike Merck-Samsung Bioepis, Biocon-Mylan with approvals in Europe, Australia, Japan, and emerging markets are better placed to withstand pricing pressure,” said an analyst who didn’t want to be named.
“But the analyst says, Mylan-Biocon success in the US depends on how aggressive they play on pricing and getting the product on drug formulary to be covered by the insurance payers,” the analyst said.Shares of Biocon rose 2.67 percent to close at Rs 624.15 on BSE, the benchmark Sensex gained 0.38 percent to end 34,865.10 points.