FDA vote sets stage for J&J and Pfizer battle over Remicade's $6.5B in sales

Pfizer's ($PFE) biosimilar of blockbuster Remicade looks to be headed to the U.S. market this year after getting very favorable treatment from an FDA advisory committee. Most importantly, Inflectra was recommended for all indications, a key to the drug maxing out its sales potential, as it goes head-to-head with Johnson & Johnson's ($JNJ) Remicade, a drug that brought in more than $6.5 billion in the U.S. last year.

While the FDA does not have to accept the recommendation, the one-sided 21-3 vote is a good indicator that it will and Pfizer said it's prepping with that expectation. After the vote, Jenny Alltoft, global biosimilars lead at Pfizer, said the company looks "forward to the FDA's continued review and, while awaiting its decision and certain other factors, we are moving ahead with the preparation of our launch plans for 2016."

The committee not only recommended Inflectra's approval for rheumatoid arthritis and ankylosing spondylitis, for which it was found similar, but over J&J's objection, also for Remicade's other approved indications. Those include psoriatic arthritis, Crohn's disease, ulcerative colitis and psoriasis.

Bernstein analyst Ronny Gal in a note to investors explained the importance of that move.

"Commercially, the importance of extrapolation can't be understated," Gal said. Without it, a biosimilar is likely to struggle to get traction. Doctors might worry about quality and payers would still have to keep the original drug in their formularies for the other indications. They also would "lose their rebates if they prefer the biosimilar for part of the market," Gal said.

J&J still has some more cards to play in fighting off the competition for Remicade, one of the world's top-selling drugs. The med's key patent is under review and if the company loses, it will certainly appeal that decision. Gal points out J&J is also suing Celltrion, which developed the biosimilar with Pfizer's Hospira, over the cell culture media patents.

J&J is well aware of the success that the biosimilar has had in Europe where Merck & Co. ($MRK) sells Remicade. Merck reported in its year-end earnings that Remicade sales were $1.79 billion, down 10% on an exchange-adjusted basis for the year. But the erosion was accelerating with sales falling 18% on the same basis in Q4.

The situation there, however, is different than in the U.S. market because both Hospira and Celltrion versions are sold there. Distributors handling Celltrion's version got into a price war with Hospira as both sought to tie up government tenders. In the U.S., Pfizer has exclusive rights to the biosimilar so will have the market to itself until other companies get their knockoffs approved.

And Gal thinks the vote Tuesday really heralds the opening of the floodgates for biosimilars in the U.S. He told investors the vote "strongly supports the argument that most biologicals drugs will eventually face biosimilar competition."

- here's the approval statement
- here's Pfizer's statement
- read FierceBiotech's take

Special Report: The 10 best-selling drugs of 2013 - Remicade

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