In my opinion, the biggest risk to the companys dividend isnt Humira but instead the debt load. And the list includes four other firms, already with regulatory approval for their Humira wannabes. The EU is a $4 billion market and accounts for two-thirds of AbbVies revenue. Within the resulting BPCIA litigations, AbbVie would put over 60 to 80 patents on the table. Copyright 2022 Pharma14. The Virginia lawsuit is duplicative to the first lawsuit AbbVie filed in Illinois 2 weeks ago. For those companies that are willing to give AbbVie a bit more exclusivity, say till 2023, they have proffered the carrot of out-of-court settlements, another way of describing payments to stay out of the market or face litigation. Today, the door opens for biosimilars, the generics of the biologics world, and they have been waiting in the wings. In October 2021 the company announced an 8.5% increase in the dividend. Any reliance on data provided herein is done solely at the discretion of the user. In 2020 it generated $19.8 billion worth of sales. Year of patent expiration for the last patent-protected variant of a drug has been considered for analysis.For example, if a drug is going off patent in the U.S. in 2022 and in Europe in 2023, it. In this manner, AbbVie had gained complete control over the adalimumab market, merging generics gradually into the market, allowing AbbVie to manipulate their prices and marketing strategies to suit the market they have constructed. The bottom line: All eyes are now focused on 2023. A biosimilar. Q4 earnings come out next month, so that will provide an opportunity to see where exactly the company stands with one year until competition. So it should be no surprise that AbbVies rebuttal is that, patients who are stable on their existing biologic therapy should not be switched to another product for non-medical reasons., Finally, in another attempt to enter the biosimilar market, Pfizer is suing J&J over their biologic, Remicade used in the treatment of rheumatoid arthritis. This thicket of 257 patents has enabled the company to control its competitions rollout of biosimilars. Why Target Opioids When Alcohol Is A Much Bigger Problem? They have a high certainty of blocking biosimilar entry. With revenue peaking at 20.8 billion dollars in 2021, Humira is considered to be the world's top selling drug and has held that status for the past 8 years. 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With each settlement closed, the release date was pushed back by a few months, guarantying the former settler a few months of market exclusivity, along with the companies who have made an agreement with AbbVie beforehand. Novartis press release Will they have to cut their dividend? In the earlier ruling, the U.S. Court of Appeals for the Federal Circuit decided that Erelzi infringed on two Enbrel patents related to the active ingredient and the manufacturing process. All Rights Reserved. Recently, Alvotech filed a declaratory judgement action against those same four patents in the Eastern District of Virginia. What we dont know yet is how fast competitors biosimilars will be able to gain market share, and how effective the remaining patents extending out to 2034 will be. This volley of dueling legal actions is merely the latest chapter in what has been a familiar story for AbbVie and its blockbuster TNF inhibitor, Humira. Ideally, Id want to see long term debt close to $50 billion by Q1 2023, but even mid-50s would probably be sufficient. The other thing thats happened and you can see this if you follow the process with Remicade is that Humira may continue to offer substantial discounts and rebates as long as they can squeeze water out of that rock, he said. Now, of course, how one determines value in another question entirely. This legal challenge alone serves as a signal for biosimilar developers to utilize the tools at their disposal to bring access and affordability to the forefront., We think that our product can bring savings to the system and to the patients quickly and we have tailored our strategy to ensure this, he added. The EU is ahead of the US in the adoption of biosimilars, the UKs National Health Service, always in the red, has stated: Our aim is that at least 90 percent of new patients will be prescribed the best value biological medicine within three months of launch of a biosimilar medicine, and at least 80 percent of existing patients within 12 months, or sooner if possible. They have already moved 80% of their patients to They will offer more than one alternative biosimilar and move patients to the best value medications. This is a good sign moving forward, as the companys dependence on the drug has been drastically reduced. Biologics are budget breakers, so the introduction of lower-priced alternatives is key in controlling costs. Beyond cosmetics, these segments included ophthalmology, gastroenterology and the central nervous system. Matching patents to biologic drugs is far more complicated than for small-molecule drugs. I think there will be more and more biosimilars available. At this point, the next question would be how much of AbbVies revenue comes from Humira? Still, given its current yield over 4% and potential for mid-single digit dividend growth, I think its still a respectable dividend growth choice. Additionally, there will be royalties and licensing agreements from competitors to help offset the losses. Alvotech is seeking a declaratory judgement that its biosimilar does not infringe on AbbVies patients and that said patents are invalid. Besides Cyltezo, they include Amjevita, with a settlement-enforced launch date of no earlier than Jan. 31, 2023; Hyrimoz (adalimumab-adaz, Novartis Sandoz), no earlier than Sept. 30, 2023; Hadlima (adalimumab-bwwd, Samsung Bioepis), no earlier than June 30, 2023; Abrilada (adalimumab-afzb, Pfizer), no earlier than Nov. 23, 2023; and Hulio (adalimumab-fkjp, Mylan), no earlier than July 31, 2023. Stephen B. Hanauer, MD, can be reached at 676 N. St Clair Street Suite 1400, Chicago IL, 60611; email: shanauer@northwestern.edu. Over the past several years the percentage of company revenue coming from the drug has declined significantly. Teflon and Human Health: Do the Charges Stick? A Retrospective On COVID Lockdowns, Why Do Books Smell? Champagne Stock: A slang term used to describe a stock that has appreciated dramatically. Ideally their sales growth needs to outpace (or at the very least match) the declines from Humira. Their claim that J&J used its market advantage to keep their less expensive biosimilar off insurance companys drug formularies by offering discounts and incentives. [1]. As a sum of parts, we can think of the Allegan catalog + Imbruvica as essentially being equal to Humira. . thinkBiotech LLC reserves the right to amend, extend or withdraw any part or all of the offered service without notice. This list may exclude some of the patents which block biosimilar launch, and some of these patents listed may not actually block biosimilar launch. And most important of all, Humira sales have declined as a percentage of total revenue, going from 65% of sales in 2017 to 37% in 2021. Although great care is taken in the proper and correct provision of this service, thinkBiotech LLC does not accept any responsibility for possible consequences of errors or omissions in the provided data. Barring any developments in the Alvotech case, that year will mark the official end of AbbVies exclusivity over the highest-grossing drug in the world, a product that netted the company $16 billion in U.S. revenue and $19.8 billion in global revenue in 2020 alone. patent expired in Europe, Japan and Australia in 2012, and as an indicator to what is to come for Pfizer in the United States; between 2012 and 2015, Pfizer's annual revenue from In order to protect Humira's largest market- the US, AbbVie had arranged settlements with 8 manufacturing companies, allowing them to release their biosimilars in the EU in 2018, yet restraining them from releasing in the US until a designated date in 2023. Their patent thicket, Allergan acquisition, up-and-coming drugs, and pipeline all signal they should be able to offset the impending decline in sales. On May 11, Icelandic-based drug developer Alvotech filed a lawsuit against AbbVie seeking to undo what it alleges is a minefield of invalid patents surrounding what is arguably the pharma giants most prized possession: Humira. While Humiras days of exclusivity are numbered, we need to consider that even after the 2023 patent expires sales arent suddenly going to zero. The $15 billion in revenue that management has guided for is promising in this regard. thinkBiotech performs no independent verification of facts as provided by public sources nor are attempts made to provide legal or investing advice. Some of the patents claimed Humira, its uses, or its manufacturing processes. They are staging their patent protection to protect them until they have new patented and more expensive agents. Dr. Charles Dinerstein, M.D., MBA, FACS is Director of Medicine at the American Council on Science and Health. Through Q3 2021 Humira has generated $15.4 billion in sales. In April, AbbVie submitted applications to the FDA and European Medicines Agency for Skyrizi in psoriatic arthritis. A total of six FDA-approved Humira biosimilars are now cleared for a 2023 release in the U.S. When Humira was introduced, it cost $19,000/annually. With revenue peaking at 20.8 billion dollars in 2021, Humira is considered to be the world's top selling drug and has held that status for the past 8 years. Mark Levick can be reached via Carolina Gamero: carolina.gamero@berlinrosen.com. These patents were identified from searching drug labels and other general disclosures from the brand-side company. We are pleased that the Supreme Court has declined to hear Sandozs appeal in the Enbrel patents case, finally bringing this dispute to an end, Amgen said in a statement to Healio Rheumatology. The newer up-and-comers like Skyrizi and Rinvoq are where the growth needs to come from for AbbVie to excel. Specifically, the Patent Office has rejected as baseless four separate validity attacks on one of the asserted patents.. The same month Alvotech announced its lawsuit against AbbVie, the U.S. Supreme Court denied a petition from Novartis Sandoz to review an earlier U.S. appeals court ruling in favor of Amgens Enbrel (etanercept), and against Sandozs biosimilar Erelzi (etanercept-szzs). The next closest drug was Mercks Keytruda at $14.4 billion. Alvotech press release BI actually took AbbVie to court after the Amgen settlement was completed, eventually ceding to the patent fortress and settling in 2019. AbbVie agreed not to settle with any other manufacturers on terms that would let them enter the market at the same time as Amgen, or for five months thereafter, thus ensuring Amgen with Humira biosimilar exclusivity for the first five months it is on the market. The first settlement closed was with Amgen regarding their biosimilar Amgevita. Through the first 3 quarters of 2021, it accounted for 37% of sales. Biosimilars are coming. They have a high certainty of blocking biosimilar entry.