Analyst: 'Mess Continues' With Amgen Neupogen Competitor

Amgen, Inc. (NASDAQ: AMGN) will face competition for its Neupogen chemotherapy treatment from biotechnology, but exactly when a newly approved rival comes to market, and at what price, remains uncertain, an analyst said Monday.

Novartis AG's (NYSE: NVS) Sandoz unit obtained U.S. regulatory approval Friday for its biosimilar Zarxio treatment in an unsurprising development.

But Morgan Stanley's Matthew Harrison noted a key March 13 court hearing on Amgen's request for an injunction against Sandoz for an alleged patent violation concerning Zarxio.

"Our conclusion: The mess continues," said Harrison, who maintained an Equal-Weight rating on Amgen. "It's still a a wait-and-see game."

Moreover, Harrison cited material from Amgen's lawsuit suggesting it may cut the price of Neupogen to maintain market share.

Sandoz "could actually price above Neupogen" while offering physician rebates, according to Harrison.

Sandoz hasn't commented on pricing plans except to note a 20 percent to 30 percent biosimilar price discount in Europe, Harrison said.

Neupogen accounted for $840 million of Amgen's 2014 sales of $20.06 billion.

Sandoz has agreed to refrain from launching Zarxio until either April 10, or until a ruling on the case is made; whichever is earlier.

Zarxio is heralded as the first-ever biosimilar drug to win U.S. marketing approval.

In contrast with generic drugs, biosimilars are manufactured from living organisms, and market clearance requires that it be "highly similar to an already-approved biological product," rather than an exact copy.

Harrison said a regulatory requirement that biosimilar developers share the content of their applications with the original patent holder has opened the doors to significant litigation.

Similar pending cases include Sandoz versus Pfizer Inc. (NYSE: PFE) related to its Enbrel arthritis treatment and South Korea's Celltrion Inc. versus Johnson & Johnson (NYSE: JNJ) concerning JNJ's Remicaide drug for arthritis and other ailments.