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Novartis' Sandoz Progresses with Biosimilars

NVS PFE AMGN

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Novartis (NVS - Snapshot Report) recently announced that its generic arm, Sandoz, has initiated a phase III study for its biosimilar version of Amgen’s (AMGN - Analyst Report) Enbrel (etanercept).

We note that Enbrel is approved for several indications including the treatment of moderate to severe active rheumatoid arthritis and psoriasis.

The main aim of the phase III study is to establish biosimilarity on safety, efficacy and immunogenicity compared to Enbrel for the treatment of patients with moderate to severe chronic plaque-type psoriasis. Positive results from this study will support regulatory filings in the US and EU.

Amgen has a collaboration agreement with Pfizer, Inc. (PFE - Analyst Report) whereby the marketing rights for Enbrel outside the US and Canada is reserved with the latter.

We note that Enbrel was a key revenue generator for Amgen in 2012 with sales of $4.2 billion, up 14.4%.

Meanwhile, Sandoz is also developing biosimilar versions of Amgen's Neulasta (pegfilgrastim) and Neupogen (filgrastim).

Both drugs are approved for stimulating white blood cell production in the body.

According to IMS Health, Sandoz is a leader in the global biosimilars market. The company has three marketed products which account for about 50% of all biosimilars in the combined regions of North America, Europe, Japan and Australia.

Sandoz currently has seven phase III studies across five biosimilar molecules in its arena. We are encouraged by Sandoz’s efforts to broaden its portfolio which should boost sales in the coming years.

Novartis currently carries a Zacks Rank #3 (Hold). Right now, Simcere Pharmaceuticals looks attractive with a Zacks Rank #2 (Buy).

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