Merck KGaA in advanced talks to sell off biosims unit—and others could follow

Merck kgaa
Merck KGaA is in advanced but complex talks to sell its biosimilars unit, its CEO said Thursday.

The rumors are true: When it comes to biosimilars, Merck KGaA has had enough.

The German drugmaker is in advanced negotiations to sell its unit of biologic copycats, it said in its 2016 annual report (PDF).

The confirmation follows an October report from Reuters that the company had brought on JPMorgan Chase & Co. to help it scout potential buyers for the business. Sources at the time said it could fetch up to $1 billion.

Merck has been collaborating with Indian generics maker Dr. Reddy’s on biosimilars development since 2012, but the team has yet to bring a product to market. Its pipeline includes a copy of AbbVie’s Humira currently in phase 3 testing.

Many of the company’s rivals are further along: Novartis’ Sandoz and Pfizer already have biosimilars on the scene in the U.S., and Amgen’s Humira copy is awaiting launch following a September FDA approval. And as the market begins to crowd, companies still playing catch-up may have to slash prices to nab a piece of the pie. That wouldn't be good for the latecomers and their revenue prospects—and it would drag down the sales potential for earlier-to-market meds, too.

Merck KGaA isn’t the only drugmaker trying to bail on biosims. Late last month, Allergan CEO Brent Saunders told Bloomberg his company would likely do the same after it wraps up the four cancer-drug copies it’s currently developing with Amgen.

Meanwhile, biosimilars may not be the only unit Merck bids farewell in the near future. Each of the company’s divisions is under an ongoing review, CEO Stefan Oschmann told reporters Thursday, according to Reuters.   

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