Novartis (NVS) Gets FDA Nod For Biosimilar Version Of Enbrel

Novartis AG (NYSE:NVS) received a major boost when its generic arm, Sandoz obtained FDA approval for Erelzi, the biosimilar version of Amgen’s (NASDAQ:AMGN) blockbuster drug Enbrel (etanercept).

The FDA has approved Erelzi for all indications stated in Enbrel’s label – rheumatoid arthritis (RA), plaque psoriasis (PsO), psoriatic arthritis (PsA), ankylosing spondylitis (AS) and polyarticular juvenile idiopathic arthritis (JIA).

However, the decision was not unexpected as the FDA’s Arthritis Advisory Committee (AAC) had unanimously voted (20-0) in favor of Erelzi’s approval in Jul 2016.

We remind investors that Erelzi is Sandoz’s second biosimilar to be approved through the FDA biosimilars pathway established under the Biologics Price Competition and Innovation Act.

In Sep 2015, Sandoz launched Zarxio in the U.S., the biosimilar version of Amgen’s blockbuster drug, Neupogen. Zarxio became the first FDA-approved biosimilar to be launched in the country. Zarxio was followed by the FDA approval for Pfizer’s (NYSE:PFE) Inflectra, a biosimilar version of Remicade in Apr 2016. It was approved for multiple indications including AS (arthritis of the spine), PsA and chronic severe PsO among others.

Meanwhile, a regulatory application for Erelzi was accepted by the European Medicines Agency in 2015 and is currently under review.

Sandoz is a global leader in biosimilars and currently markets three products – Omnitrope, a human growth hormone; Binocrit, an erythropoiesis-stimulating agent; and Zarxio – in the U.S. Backed by its deep pipeline of biosimilars, the company plans to make 11 regulatory filings over the 2015–2017 time frame, of which six applications have already been submitted. Further, Sandoz plans to launch five biosimilars of major oncology and immunology biologics across key geographies by 2020.

Enbrel generated sales of $2.9 billion in the first half of 2016, up 16% from the year-ago period. The entry of biosimilar will adversely impact Amgen’s sales, although both the companies are presently involved in a lawsuit for the same.

Novartis currently carries a Zacks Rank #3 (Hold). Investors interested in the healthcare sector may consider Actelion Ltd (OTC:ALIOF) with a Zacks Rank #1 (Strong Buy).

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