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Closing In on Year End and Reviewing Pfizer as an Investment

PART:
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Part 8
Closing In on Year End and Reviewing Pfizer as an Investment PART 8 OF 10

Enbrel Facing Competition from Biosimilar Versions of the Drug

Enbrel growth prospects

According to its collaboration agreement, Pfizer (PFE) currently markets Enbrel in markets outside the US and Canada while Amgen (AMGN) offers the drug in the North American markets. According to Pfizer’s 10Q, Enbrel is indicated for the “treatment of moderate-to-severe rheumatoid arthritis, polyarticular juvenile rheumatoid arthritis, psoriatic arthritis, plaque psoriasis, ankylosing spondylitis and nonradiographic axial spondyloarthritis.”

To learn more about Enbrel, please read Enbrel and Neulasta Expect Falling Sales in 4Q15.

Enbrel Facing Competition from Biosimilar Versions of the Drug

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Wall Street analysts estimate that Enbrel’s sales in 2016 will reach approximately $3.0 billion, which would be a year-over-year (or YoY) decline of ~9.1%. In 2015, Enbrel accounted for approximately 6.8% of Pfizer’s total revenues.

If Enbrel can surpass its revenue targets, it may boost Pfizer’s share price as well as that of the iShares S&P 500 Growth ETF (IVW). Pfizer makes up about 1.1% of IVW’s total portfolio holdings.

Biosimilar competition

In addition to competition from branded drugs from AbbVie (ABBV), Johnson & Johnson (JNJ), and Celgene (CELG), Enbrel also faces competition from a biosimilar version of the drug, Benepali. Benepali was launched in Europe by Samsung Bioepis, a joint venture between Biogen and Samsung.

Due to limited efficacy and safety data related to Benepali, Pfizer does not expect a major portion of Enbrel’s existing patients to switch to the biosimilar drug. However, lower prices of biosimilars may attract new patients. Although Enbrel’s revenues may not take a major hit, a biosimilar entry may affect Enbrel’s market share in 2016.

In the next article, we’ll analyze the growth prospects of Pfizer’s JAK inhibitor drug, Xeljanz.

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