Fitch: Biosimilar developers forging ahead

August 6, 2013 2:41 PM

The foundations of the biosimilar drug market continue to take shape as drugmakers move forward with their varied and evolving strategies for biosimilar pharmaceutical development, according to a new Fitch Ratings report.

The opportunities afforded by the nascent biosimilars market are significant as eight of the 20 best-selling pharmaceutical products in the world are biologics set to lose patent protection by 2020. Fitch expects the market for biosimilars to accelerate rapidly, particularly once the first of these products are launched in the U.S. — likely in 2015.

To date, few firms have demonstrated that they have sufficient financial resources, risk tolerance, and unique capabilities necessary to develop and commercialize biosimilars on their own. Consequently, many firms have partnered in their development of biosimilar drug development in order to share costs, mitigate risk, and leverage core competencies. Fitch expects most firms to continue the strategy of developing biosimilars within the context of corporate partnerships, at least through the early stages of the market’s formation.

Fitch expects market dynamics to materially benefit the first companies to successfully launch a biosimilar for a particular reference drug. Biosimilar drug products could conceivably capture 20%-40% of the market at a price only 20%-30% less than that of a particular reference drug.

These figures compare to a near-100% market share gain and pricing discount of 70%-90% for traditional small molecule generics. However, first movers will bear costs and risks on behalf of all future biosimilar developers, including fleshing out the untested application process, educating physicians and payors, and resolving potential patent litigation.


Source: Fitch Ratings press release

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