Credit Suisse Sees $70 Billion Biosimilars Land Grab

By Chris Lange Published Nov 4, 10:10AM EST

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Biosimilars is a becoming a “must understand” theme that has the potential to largely impact the global biotechnology and pharmaceutical sectors. Biosimilars pose both a threat and an opportunity for the biotechnology and pharmaceutical sectors. Ravi Mehrotra was the Credit Suisse analyst on call for the report.

Credit Suisse released its first edition of the “Credit Suisse Biosimilars 101” series of notes, wherein the firm’s biotech and pharma teams have coordinated in the analysis and impact of biosimilars. Following editions will focus on specific elements of biosimilars, continually building to the key reference source for investors. The key and common analytical tool that Credit Suisse will use in these editions is its “PharmaValues” database.

The first edition focuses on the size of the biosimilar opportunity, which is looking like “a near term $70 billion land grab.” Also this edition looks into the main targets for biosimilars: anti-tumor necrosis factors (anti-TNFs). The public companies most exposed to this biosimilar impact include AbbVie, Amgen, Cipla, LG, Merck Serono, Momenta, Novartis, Pfizer and Samsung.

The implications for these stocks can be seen as AbbVie, and to a lesser extent Amgen, Merck and Johnson & Johnson, are the most negatively exposed to the “1st wave of biosimilar” anti-TNFs. In contrast, Amgen, Coherus, Novartis, Boehringer Ingelheim, Pfizer and Samsung are most positively exposed to “1st wave of biosimilar” anti-TNFs.

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Mehrotra detailed in this first report:

Biologics have become a very significant part of the global drugs market. This market grew from just $20B … (or 10% of the global drugs market) in 2000 to $159B/29% in 2014E, and $276B/32% by 2020E. Biologics dominance of the “Top 10” drugs is even greater with biologics representing ca70% of the value by 2015E. By 2018, $69B of biologics will have undergone patent expiries in major markets ($35B in US and $34B in ROW). By far, the anti-TNF’s represent the biggest near term biosimilar opportunity as they make up the largest single component of the global biologics market ($30B or 35% of 2015E total biologics sales) and is potentially catalyzed by the Dec 2016 US patent expiry of Humira (although there is debate around this effective date due to the likely November 18th issuance of the ‘657 application/’135 patent – expiry 4th Jan 2025).

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.