Analysts were quick to zero in on an 8.5% drop in J&J’s US Remicade revenue during the fourth quarter.
The pharma conglomerate has squared off against Pfizer’s biosimilar here, but sparked a lawsuit as its major league rival complained that J&J was using “exclusionary contracts” that barred them from reaching most patients. The contest between the two has become a test case for the way branded manufacturers plan to fight the wave of copycats coming into the market. And the results in the J&J/Pfizer match could put a chill on near-term expectations for the knockoffs.
J&J made clear this morning that it is protecting its market share by offering some big discounts to keep Pfizer at bay. Remicade earned about $5 billion a year at its peak in the US.
“The erosion was primarily driven by negative price,” offered J&J investor relations chief Joe Wolk in the Monday meeting call with analysts. Internationally, where J&J has faced knockoffs for years, the decline was more than 18%.
Pfizer got some good news on the battle front today, as a US appeals court upheld a ruling invalidating a key patent for Remicade. In fighting against the biosimilar, J&J highlighted Pfizer’s “at risk” position, noting that it would seek damages if its patents are upheld. So far, that case is going against them.
J&J CEO Alex Gorsky also suggested that the company would follow up aggressively on the $10.5 billion it spent on R&D last year and the $35 billion spent on M&A, which included the big buyout of Actelion.
J&J, he added, will be “aggressively pursuing transformational innovation” in 2018, while looking for late-stage advances on apalutamide — its next-gen prostate cancer drug that is also ironically in a clinical race with Pfizer’s Xtandi — the NMDA depression drug esketamine and following up on a slate of partnerships that included a standout, $350 million pact with China’s Legend Biotech on a new BCMA-targeting CAR-T.
The global company will need all the help it can get to meet Gorsky’s bullish revenue projections for 2018. And with the Zytiga franchise under generic pressure and the numbers under the microscope today, the pharma giant’s stock dropped more than 4%. J&J execs still have lots to do to convince analysts that it has everything under control.
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