The patent agreement between Analysis and Stelara puts J&J back on track to a sales forecast of $57 billion in 2025

By Patrick Wingrove

(Reuters) – Johnson & Johnson's court settlement with Amgen Inc. to delay a biosimilar version of its blockbuster psoriasis drug Stelara to January 2025 could result in the drug making a larger contribution to J&J sales in 2024 and 2024 2025 performs as Wall Street forecast.

Launched in 2009, Stelara has been J&J's best-selling drug as of 2019, with sales of $9.7 billion in 2022. Its patents expire this year, opening the door for a cheaper biosimilar to enter the market and increasing the company's expectations need to drop Stelara's monthly price by $13,000.

The availability of biosimilars is likely to drive down the prices of older biotech drugs, although not to the extent that generics for traditional pills have. But legal agreements that have seen competing drugmakers delay entry to avoid protracted patent battles have delayed their launches and kept prices high.

Analysts currently expect J&J to generate average pharmaceutical sales of $54.5 billion in 2025 and that Stelara sales will grow to $7.5 billion in 2025 from $9.9 billion this year 2024 will drop after a key US patent expires in September, according to data from Refinitiv. Two analysts have valued Stelara at $5.4 billion in 2025.

J&J forecasts pharmaceutical sales of $57 billion by 2025 after the company lowered its previous guidance of $60 billion in April, citing currency dynamics that would hurt its pharmaceutical business in 2022.

Analysts told Reuters that the Stelara deal with Amgen could put the New Brunswick, New Jersey-based company on track to meet the revised revenue guidance, despite initial skepticism.

“I don't think they're going to hit the $57 billion mark with this deal, but now there may be a way for them to hit that number, where before there didn't seem to be a single one because it was several billion.” Dollars gone,” said Guggenheim analyst Vamil Divan.

He said the drug, which also treats Crohn's disease and other autoimmune diseases, could generate sales of about $10 billion in 2024, falling to $7.5 billion to $8.5 billion the following year. This would add around $4.6 billion to average drug sales estimates, assuming no biosimilars hit the market before 2025.

Amgen said last month that the confidential agreement signed with J&J will allow it to sell its Stelara biosimilar no later than January 1, 2025.

The company's use of the phrase “no later than” has cast doubt on Stelara's extended exclusivity. According to Credit Suisse analyst Trung Huynh, there's also a possibility that other drugmakers will launch their own biosimilars before Amgen, although J&J could sue to prevent that.

“If no Stelara biosimilars come to market in 2024, I think growth should continue at around 4% in 2023 and 2024,” Huynh said.

Alvotech and Teva Pharmaceutical's AVT04 could be the next Stelara biosimilar to receive U.S. approval in the second half of 2023, Divan said in an analyst note, pending compliance with the Food and Drug Administration's guidance related to the manufacturing facility address manufacturing issues raised by Alvotech in Reykjavik.

Neither Teva nor Alvotech responded to requests for comment.

A J&J spokesman said the company will continue to defend its intellectual property after the deal with Stelara and that the deal will not impact its 2023 financial outlook.

J&J is making “good progress” toward its 2025 guidance, the spokesman said, citing recent comments at an investor conference that the company is increasingly confident of being able to meet its target.

(Reporting by Patrick Wingrove; Editing by Caroline Humer and Bill Berkrot)

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