OREANDA-NEWS. Despite the approval earned by one biosimilar via the 351(k) pathway and the relatively large number of companies that intend to enter the market, their impact on sponsor companies remains uncertain, Fitch Ratings says. Patent and naming disputes, as well as pricing, physician and patient acceptance and actual clinical effectiveness and other issues must all be cleared before certainty about the financial impact can be understood.

The approval of Zarxio (filgrastam-sndz) under the new pathway was a positive step for biosimilars. However, other companies and drugs may face more challenges if they use 351(k). The larger the molecule, the greater the chance there is for clinical variance relative to the reference product. Zarxio is a relatively simple molecule. Sandoz has significant experience with developing, manufacturing and gaining regulatory approvals for biosimilars in other countries. Other companies may find this path more difficult.

A relatively large number of companies have signaled their intention to get into the market. Merck, Pfizer and Amgen, however, did not publicly commit to biosimilars until a U.S. pathway was nearly finished. Companies with portfolios of biological drugs that are likely to face biosimilar competition, like Amgen, will likely make more investments into the development of biosimilars. Other firms without a significant portfolio exposure to biologics are also likely to enter the market. Many firms will likely look at international opportunities as a means to leverage their investments.

Fitch expects patent litigation to continue. The legal process, "the patent dance," has slowed the market's progress for Zarxio. We believe clearer guidance, likely to come from court decisions on existing disputes, will speed the process. Furthermore, the naming methodology for biosimilars could affect their ability to gain market share. Assigning a nonproprietary name to a biosimilar that is identical to that of the reference product would likely simplify matters.

Going forward, while the U.S. market holds significant potential for biosimilars, the prospects remain uncertain. The European market for biosimilars is far more developed than the U.S. market. Some insights into pricing and market share may be gleaned from it. However, their actual success in the U.S. will hinge on their ease of substitution and real world clinical experience.

The report, "U.S. Biosimilars Making Progress (Competitive Landscape Remains Uncertain)," is available at www.fitchratings.com