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AbbVie Settles With Novartis to Delay Humira Biosimilar in US

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AbbVie, Inc. (ABBV - Free Report) announced that it has settled a litigation with Sandoz, the generic arm of Novartis (NVS - Free Report) , involving AbbVie’s blockbuster arthritis drug, Humira (adalimumab). The company has signed a non-exclusive licensing deal with Sandoz related to Novartis’ proposed biosimilar version of Humira, in the United States, Europe and other countries where AbbVie has intellectual property. Per the agreement, Sandoz will have the license to launch its biosimilar Humira in the United States on Sep 30, 2023. A launch can be scheduled in Europe on or after Oct 16, 2018.

Per the terms of the settlement, Sandoz will pay royalties to AbbVie for the license and all pending litigations between the companies will be dismissed. AbbVie will make no payments to Sandoz.

AbbVie’s stock has declined 6.2% this year so far against the industry’s rise of 5.5%.

AbbVie has similar licensing deals with Amgen, Inc. (AMGN - Free Report) , Mylan (MYL - Free Report) and Samsung Bioepis. Amgen can launch Amjevita, its biosimilar version of Humira in the United States on Jan 31, 2023; Samsung Bioepis can launch Imraldi, its biosimilar version on Jun 30, 2023 and Mylan can launch its biosimilar, Hulio, on Jul 31, 2023. While Amgen and Samsung Bioepis’ biosimilar versions are already approved by the FDA, Sandoz and Mylan are yet to gain FDA approval. Both Sandoz and Mylan have received approval for their biosimilars in Europe.  In most countries of Europe, Samsung Bioepis’ partner Biogen and Amgen have license to launch their biosimilar versions from Oct 16 this year.

AbbVie made it clear that Sandoz's U.S. license will not be accelerated by Amgen's, Mylan’s or Samsung Bioepis' biosimilar launch.

Humira is the key driver of AbbVie’s revenues, accounting for around 65% of its total sales. Currently approved for 13 indications, Humira sales have increased consistently — 11.7% in 2015, 16.1% in 2016 and 14.6% in 2017 — backed by robust demand trends. The product continues to see strong growth in the dermatology and gastroenterology markets. The company recorded sales of $9.9 billion from the drug in the first half of 2018 and expects Humira sales to approach $21 billion in 2020. The entry of biosimilars will have a huge impact on AbbVie’s financials as the drug generates a significant percentage of the company’s revenue.

Other than Amgen, Sandoz, Mylan and Samsung Bioepis, Coherus BioSciences, Boehringer Ingelheim and Pfizer are also looking to get approval for a biosimilar version of Humira. However, AbbVie has successfully struck licensing deals with four companies to protect its revenues from HumiraThis gives AbbVie more time to strengthen its pipeline with products that are capable of making up for the expected sales decline when Humira biosimilars are launched.

Zacks Rank

AbbVie currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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