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Roche braces for 2020 biosimilar impact of almost €4 billion

Country : France, Japan, U.S., Europe

Keywords :
LONDON, 31 Jan (APM) - Roche's sales took a hit of around 1.5 billion Swiss francs (€1.4 billion) thanks to biosimilar impact in 2019, said chief executive Severin Schwan - but the worst is yet to come, with the firm bracing for a 4 billion Swiss francs (€3.7 billion impact) in 2020 as U.S. copycats take off.
Still, despite the big blow to come, the Swiss pharma predicted rising sales in the low-to-mid single digit range at constant exchange rates for 2020 thanks to new products such as Ocrevus (ocrelizumab) and Hemlibra (emicizumab) (APMHE 66045).
The guidance "looks even more ambitious when you take into account that we expect a biosimilar impact in 2020 off roughly 4 billion Swiss francs negatively", Chief financial and IT office Alan Hippe said at the Swiss pharma's fourth quarter results call on Thursday according to Seeking Alpha's transcript.
Though most of the biosimilar erosion for 2019 came from Europe, where biosimilar versions of Roche's biologics have been on the market for some time, as well as from Japan, Schwan said that around 300 million Swiss francs (€281 million) came from the "first impact" in the U.S..
"We think the impact ex-U.S. will probably be similar this year as last year", which was about 1.2 billion Swiss francs (€1.1 billion), with "roughly" the rest coming from the U.S., Roche Pharmaceuticals' chief executive Bill Anderson added on the same call.
Andersen conceded that this figure could change since "it's still early days," stressing that late July saw the U.S. launch of one biosimilar version of Herceptin (trastuzumab) and one of Avastin (bevacizumab) - both by Amgen/ Allergan (APMHE 63764) - and "they didn't really get momentums with contracts and all that sort of thing, really until the fourth quarter".
"There have been several other launches since that time, just in like, November, December, there's additional launches happening kind of in Q1, so it's still pretty early," he added. "I think what we would say is, [U.S. biosimilar erosion] consistent what we've said all along. We expect the impact in the U.S. to be similar to Europe, maybe a little better, maybe a little slower."

Biggest impact over the next two years

Anderson added that Roche is expecting to feel the "maximum impact" from biosimilar competition in 2020 or 2021.
Asked if Roche expects the impact to largely come from reduced prices paid for its originators in light of biosimilars or if it will come from the "volume" sold of competitors, Anderson said: "The impact will be primarily on volume impact not price, because we don't have major changes on our prices. And so the main impact is that we lose the business."
However, he did note that price reductions will be imposed on Roche's originator in some countries when a biosimilar launches. France is one such country.
"There some countries where statutorily they force a price cut when a biosimilar launches or when the patent expires and so some of that has already happened," Anderson said. He added that this often comes with a double impact since biosimilar competitors entering the market tend to "come in with big discounts" and "we lose the volume".
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