Merck Steps Out Of Insulin Glargine Market, But Says It Remains Committed To Biosimilars
Executive Summary
The company will not commercialize an insulin glargine copy already tentatively approved by FDA as Lusduna, but says it remains committed to biosimilars in oncology and immunology.
Merck & Co. Inc. has decided that it will not commercialize its own version of Sanofi's Lantus (insulin glargine) in the US, even though the product was already tentatively approved by the US FDA in 2017.
"After a comprehensive assessment of the current and future market environment for insulin glargine, which included an assessment of anticipated pricing and cost of production, we made the business decision to terminate our agreement on the commercialization of Lusduna pen and vial," Merck said in a statement to Scrip. The firm said it will reallocate resources including commercial and manufacturing capacity to other products.
The decision is surprising since the product was tentatively approved by FDA in July 2017, though it had not launched. Tentative approval is used by the FDA when a drug is permitted to enter the market pending the resolution of ongoing patent litigation. Sanofi filed a patent infringement suit against Merck in August 2017, triggering a 30-month stay of action.
Merck is already a strong player in the diabetes market with the blockbuster Januvia (sitagliptin), so the company would presumably already have the commercial structure in place to market an insulin copy. However, the insulin market has become highly competitive with difficult dynamics.
The follow-on product, developed with partner Samsung Bioepis Co. Ltd., would have been the third Lantus version on the market in the US behind Sanofi's original product and Eli Lilly & Co.'s Basaglar, which launched in December 2015 after Lilly reached a patent settlement agreement with Sanofi. (Also see "FDA Makes It Official With Basaglar Approval For Diabetes" - Pink Sheet, 16 Dec, 2015.)
Both copies are technically approved under the 505(b)(2) regulatory pathway for NDAs, rather than through the biosimilar pathway, based on the way insulin is categorized at FDA, but the agency is recategorizing insulins as biologics in a transition that will go into effect in 2020.
Another Setback For Biosimilars?
Merck's decision could be another sign that the US biosimilar market isn't living up to the early hype. A handful of initial lackluster launches have raised questions about the commercial potential for biosimilars in the US in the near-term. Even FDA Commissioner Scott Gottlieb has expressed concern that slow launches could lead drug manufacturers to curtail biosimilar R&D. (Also see "FDA's Gottlieb: 'Pricing And Reimbursement Mischief' Holding Back Biosimilar Market" - Scrip, 7 Mar, 2018.)
Momenta announced Oct. 1 that it is exiting most biosimilar development to focus on a novel pipeline of drugs after a lengthy strategic review under which it failed to find a buyer for the business. CEO Craig Wheeler said the patent delays and market uncertainty partly contributed to the decision (see sidebar).
Merck is one of just a few drug makers that has experienced the challenging US biosimilar market first-hand. The company's Renflexis (infliximab-abda) was the second biosimilar version of Johnson & Johnson's Remicade (inifliximab) to launch in July 2017, behind Pfizer Inc.'s Inflectra (infliximab-dyyb).
Renflexis launched at a discount to the list prices of both other infliximabs but failed to gain traction in the market. Branded Remicade has maintained a 94% share of the infliximab market two years after the first biosimilar launch, largely because of J&J's successful defensive contracting strategy. (Also see "Exclusive Remicade Contracts Are Slowing Biosimilar Uptake" - Scrip, 1 Aug, 2017.) Merck hasn't broken out sales of Renflexis, a sign the drug is not material to the top-line.
Nevertheless, Merck and partner Samsung Bioepis did get a recent commercial victory when the Department of Veterans Affairs picked Renflexis as its preferred infliximab. (see sidebar).
The insulin glargine decision aside, Merck said it remains committed to biosimilars. "This decision does not affect the other biosimilar assets currently in development with Samsung Bioepsis," Merck said. "Both Merck and Samsung Bioepsis remain committed to other biosimilar assets in oncology and immunology."
Lilly and partner Boehringer Ingelheim GMBH have had more success with Basaglar, which launched in late 2016 and has been a strong contributor to revenue. Basaglar generated $368.8m in the first half of 2018.
News that Merck will not now enter the market is a positive for Lilly and other biosimilar developers working on insulin glargine formulations. Mylan NV is one. The company's version of insulin glargine was hit by an FDA complete response letter earlier this year, but the timeline for launching is uncertain in any event due to patent issues.