How Pfizer, Bristol Myers Squibb and Johnson & Johnson Are Confronting Patent Cliffs

2024-06-26

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Pictured: Collage of papers, time, and money/Taylor Tieden for BioSpace The pharmaceutical industry is facing a sizable patent cliff, with hundreds of billions in sales at risk as more than 190 products lose exclusivity between 2022 and 2030. The industry has faced large-scale patent cliffs before, including in 2016, when many major sellers, such as Crestor (rosuvastatin) and Glivec (imatinib), went off-patent. However, while the 2016 patent cliff was projected to erode $100 billion in brand-name sales, the current expirations will put over $300 billion sales at risk between 2023 and 2028, Eduardo Schur, EY US health sciences & wellness commercial strategy and R&D lead, told BioSpace. Another factor that makes the coming patent expirations different is the presence of a number of biologic medicines among the products. Previous waves of products affected by loss of exclusivity (LOE) have been mainly small molecule medicines, and the higher levels of biologics could change how quickly and deeply sales drop, with biosimilars slower to gain market share in comparison to generic competition. AbbVie proved with its patent defense of Humira (adalimumab), a biologic, that it is possible to protect sales even as rival biosimilars look to take a share of the market. The extension of sales, such as through additional patents, is one method companies use to prepare for LOEs, but there are others in the pharma playbook. This year has seen some evidence of additional approaches to navigating the challenge, such as M&A activity and reductions in expenditure. BioSpace took a look at how three pharma companies facing serious patent cliffs appear to be preparing for these events. Company: Pfizer Products: Eliquis, Ibrance, Prevnar 13, Xtandi Pfizer faces a challenging situation where four of its products are facing patent expiration between now and 2027. Eliquis, an anticoagulant medication, and Ibrance, a treatment for some breast cancers, together represented 20% of total revenue generation for the company in its full-year 2023 results, and while sales of its pneumococcal vaccine Prevnar 13 and prostate cancer therapy Xtandi don’t rise to the same level, they are also blockbuster products. With such a chunk of sales set to be taken out of its earnings, and facing falling sales for its COVID-19 products, Pfizer took a larger-scale move to bolster its future revenue through the $43 billion acquisition of Seagen and its portfolio of antibody-drug conjugates (ADCs), announced early last year. Shortly after that deal was finalized, the company bolstered its ADC pipeline by entering into a licensing agreement with Nona Biosciences for its mesothelin-targeting ADC, HBM9033. Indeed, Brian Winne, life sciences senior analyst at RSM US, explained that the most “traditional way” for pharma companies to face patent cliffs is by moving forward with M&A. “We’ve had some pretty significant M&A activity in the fourth quarter of 2023 and the first quarter of 2024. I think we’ll definitely see more M&A and licensing because both of these give them an opportunity to bolster their pipeline without starting [R&D] from scratch,” Winne said. Company: Bristol Myers Squibb Products: Eliquis, Opdivo Pfizer’s partner on Eliquis, Bristol Myers Squibb, is also facing patent cliffs of its own, with one leading product, multiple myeloma therapy Revlimid, already facing a significant drop in revenue following the entry of generic competition onto the market in 2022. The product’s revenue fell from $12.9 billion in 2021 to $6 billion in 2023. In contrast to Revlimid, BMS may be able to hold onto more product sales of its cancer treatment Opdivo because of the differing circumstances when a biologic goes off-patent. Schur told BioSpace that due to the expense of developing a biosimilar, there are often fewer competitors looking to challenge originator sales. In addition, BMS may extend patent protection by developing alternative formulations of Opdivo, such as a subcutaneously delivered form of the drug. Schur also noted that some companies have been successful with multiple IP strategies. A notable example of this strategy was AbbVie’s efforts to apply for or obtain 250 patents for Humira. However, Winne noted that this approach of building a “patent thicket” has become politically unpopular on both sides of the aisle in the U.S., and this may limit its efficacy on a widespread basis. In April, the Federal Trade Commission announced an “expanded campaign” against manufacturers’ “improper or inaccurate listing of patents,” specifically mentioning Novo Nordisk’ blockbuster weight-loss drug Ozempic (semaglutide), due to the potential for delaying cheaper generic alternatives from entering the market. In addition, at the beginning of the year, BMS’s CEO was called to testify in front of the Senate health committee to defend high prices paid for drugs. In the hearing, committee members accused BMS and other companies of taking advantage of the patent system to delay the entry of competitors onto the market after LOE. Company: Johnson & Johnson Product: Stelara Johnson & Johnson is facing one major patent expiration—but it’s a big one. Stelara, approved to treat plaque psoriasis, psoriatic arthritis, Crohn’s disease and ulcerative colitis, earned the company $10.9 billion in sales in 2023, but the product officially came off-patent in September of that year. Despite this, no rival products have so far entered the market. Competitors, namely Amgen and Alvotech/Teva, have signed agreements with the company stating that their biosimilars will not be sold until 2025. Regardless of any potential reprieve on sales, J&J is pursuing strategies to cushion the blow when it comes. The company is developing alternative treatments for Stelara, recently boasting early Phase II/III data showing that its IL-23 blocker Tremfya outperformed Stelara in the treatment of moderately to severely active Crohn’s disease. In addition, J&J has cut back on expenditures and reorganized its business. In 2021, the company spun off its consumer business as Kenvue and, in May, it emerged that J&J would sell its remaining stake in the company. J&J also engaged in a series of job cuts in 2023 and reduced investment into certain R&D development projects as part of an overhaul of its pipeline, Fierce Pharma reported. Winne noted that cost-cutting techniques, particularly layoffs, represent the opposite approach to maximizing sales and expenditure on M&A. This approach is not unique to J&J, with both Pfizer and BMS engaging in large-scale job cuts. Ben Hargreaves is a freelance science journalist based in Tosse, France. Reach him on LinkedIn.