Biosimilar Revolution Creating New Prospects for Investors
MINNEAPOLIS, April 29, 2015 /PRNewswire/ - A new class of medical products
designed to slash costs for patients and health care providers could
also hold some promise for investors seeking new investment
opportunities, according to a new report from RBC Wealth Management.
Biosimilars, the first of which was approved for use in the United
States in March 2015, are essentially replicas, or copycats, of
biologic drugs—the most complex, exotic, and expensive specialty drugs
on the market. RBC Wealth Management's special report, The Biosimilar Revolution, details how the burgeoning biosimilar market will create new
competition in the biotech and pharmaceutical industries and play a
large role in determining the health care industry's winners and losers
in the years ahead.
"The evolution of biosimilars should create significant revenue
opportunities for companies that can successfully develop and market
them," said Kelly Bogdanov, a portfolio analyst with RBC Wealth
Management and one of the authors of the report. "Investors would be
wise to pay attention to which companies emerge as leaders."
Given the ultra-competitive nature of the biosimilar market and the
early stage of development, large pharma and biotech companies with
substantial resources and know-how will likely be the near-term
winners, the report predicts.
Biosimilars are now available in all major developed nations and many
developing countries. The EU was at the forefront, approving its first
biosimilar in 2006, and has endorsed 20 others since then. But the U.S.
Food and Drug Administration's (FDA) green light of the country's first
biosimilar treatment in March 2015 was a watershed moment. It
dramatically expanded the global biosimilar market and changed the
scope of opportunities and challenges facing drug companies.
The U.S. currently accounts for nearly half of all biologics consumed
worldwide. Furthermore, biologics have the potential to reach 50% of
total U.S. drug expenditures by 2018, according to a University of
Minnesota study.
"In addition to greatly expanding the market, the introduction of
biosimilars in the U.S. should incentivize biologic companies to put
more resources toward developing drugs in categories that require the
greatest innovation and expense, which would make them more difficult
to replicate with a biosimilar," added Bogdanov. "We believe this could
spur a new wave of innovation in novel drug categories that have unmet
medical needs."
About RBC Wealth Management - U.S.
In the United States, RBC Wealth Management operates as a division of
RBC Capital Markets, LLC. Founded in 1909, RBC Capital Markets, LLC. is
a member of the New York Stock Exchange, the Financial Industry
Regulatory Authority, the Securities Investor Protection Corporation,
and other major securities exchanges. RBC Wealth Management has $270
billion in total client assets with 1,900 financial advisors operating
in 200 locations in 41 states.
SOURCE RBC