Oncolytics Biotech Inc T.ONC

Pharma faces looming patent cliff - seller's market in bio

[Noteable]

As a result of the patent cliffs in 2023 and beyond, there will be an increasing pressure on large biopharma companies to replenish their pipelines, regardless of whether that comes from in-house R&D or new partnerships and acquisitions.

In 2023, several top drugs are set to lose U.S. exclusivity as patents expire or settlements allow for generic entry.

Starting in January 2023, Amgen will be the first competitor to produce a biosimilar of Humira thanks to a settlement reached between the parties in 2017, but this settlement is only the first. AbbVie has made deals with at least eight competitors, including Boehringer Ingelheim, Pfizer, Samsung Bioepis, Mylan, Sandoz, and others, which will allow these companies to follow closely on the heels of Amgen.

The entry of multiple Humira competitors to the market is expected to allow Merck’s Keytruda to dethrone Humira as the world’s most successful drug, and with at least five years left on the term of key patents protecting Keytruda, Merck may maintain the top spot for years to come. However, the details of the settlements between AbbVie and the companies poised to produce Humira biosimilars are unclear, but the terms will likely provide AbbVie with a softer landing than companies facing a more conventional patent cliff.

Another big pharma patent battle is underway. Amgen plans to take on Johnson & Johnson’s top-selling drug with a copycat version, seeking U.S. approval for its biosimilar of the psoriasis drug Stelara, which has been marketed in the U.S. since 2009.

But it may be held up by patents that didn’t exist when the drug was approved and that J&J had no hand in inventing.

The patents, which protect ways of controlling chemical changes to biologic drugs, were awarded about a decade ago to Momenta Pharmaceuticals, which was then an aspiring biosimilar manufacturer before later changing course to develop new drugs. J&J bought Momenta in 2020, ostensibly for the company’s rare disease drug nipocalimab. A side benefit, though, was the manufacturing know-how and intellectual property that Momenta had amassed during its years working on biosimilars.

 Drugmakers’ use of intellectual property to build so-called “patent thickets” around their top products is common practice with biologic drugs, which, because of their complex structure and manufacturing processes, offer many more patentable opportunities than older chemical drugs.

The recently passed Inflation Reduction Act (IRA) provides drugmakers with biological products, such as ONCY’s pelareorep, with 13 years of market exclusivity per indication upon FDA approval of the product for each indication.  

To bridge this innovation gap, pharma CEOs will need to expand their use of alliances to form stronger ecosystems that can foster innovation. These ecosystems can be used in tandem with mergers and acquisitions (M&A) as a pipeline development strategy.

While an alliance approach can help shrink the innovation deficit, pressure to do M&A will accelerate as patents expire in 2025-2026. The years 2020 and 2021 have seen the lowest M&A in terms of value in the last several years while firepower, a company's capacity to fund transactions based on the strength of its balance sheet, in biopharma has remained near record levels, exceeding US$1.1 trillion, according to Ernst & Young (EY).

In 2020 and 2021, biopharma companies had the luxury of employing a watchful, waiting approach. However, with pipeline replenishment diminishing beyond 2022 and the innovation deficit widening by 2025, companies need to increase their deal-making in the near-term to maintain and sustain long-term growth.

David Wainer of the Wall Street Journal (WSJ) recenty wrote that it's a "seller's market in biotech," thanks in part to the "diminishing list of desirable biotechs" and the fact that other pharma companies are in Pfizer's shoes: "About $200 billion in sales is going off patent this decade." In his view, it makes sense that Pfizer is emerging as "one of the most aggressive deal makers," citing those strong COVID earnings but also the patent cliff and waning COVID market. 
 

[fox7mf]

Wake me in 39 days...or in June...or whenever we get a whisper of a business development deal.

[Lesalpes29]

I'm with you Fox... do I have enough of this reposting in repetention... wake me up when we are at 1B market cap! 

[jimsenior]

Uber on yahoo has posed a question to independent shareholders, and as I do not own a cell phone and one is required to join yahoo, I shall answer the question here. The question: I would really love to know exactly what it would take to finally throw in the towel. My answer: NOTHING. My reasoning, and I do know I may be wrong. This is not currently a pretty picture if one is just looking at

[westcoast1000]

Thanks, jimsenior, for your comments. I share your views. The results are too good to ignore or give up on. Uber has driven me nuts for years. I think he is the former Vic, or runningman, who became the moderator of the Yahoo board in its current form. I called him out by name a few years ago for being so biased against the company and he said little in reply. His main arguments against ONCY are

[westcoast1000]

"laze"  should be lazy. 

[canadafan]

Uber , for some reason has a deep rooted hatred for Onc management. In addition I hear through the grape vine he is the moderator of the yahoo site/ chat board. In that perspective many of my posts have been removed, delayed or not allowed. Those who know me & my history on chat sites.  1. I don't hide under multiple names, as some do.  2. I make a strong effort to post

[fasttrack5]

Well written CF. I always look forward to your informative posts. I have also added shares at this way oversold level. yes the yahoo site is imo not even worth looking at recently. Hopefully great things ahead for holders of ONC. thanks again for your posts. RJ

[Noteable]

David Wainer of the Wall Street Journal (WSJ) recenty wrote that it's a "seller's market in biotech," thanks in part to the "diminishing list of desirable biotechs" and the fact that other pharma companies are in Pfizer's shoes: "About $200 billion in sales is going off patent this decade." In his view, it makes sense that Pfizer is emerging as "

[Noteable]

This challenging issue facing Big Pharma is not going away soon, and the way out is through M&A that will be utilizing the US$1.5 Trillion in firepower that Big Pharma presently has in reserve. And competition for late stage Phase 3-ready immuno-oncology assets will be fierce.

[Noteable]

In 2020 and 2021, biopharma companies had the luxury of employing a watchful, waiting approach. However, with pipeline replenishment diminishing beyond 2022 and the innovation deficit widening by 2025, companies need to increase their deal-making in the near-term to maintain and sustain long-term growth. David Wainer of the Wall Street Journal (WSJ) recenty wrote that it's a "seller

[Noteable]

" ... it's a "seller's market in biotech," thanks in part to the "diminishing list of desirable biotechs" and the fact that other pharma companies are in Pfizer's shoes: "About $200 billion in sales is going off patent this decade."