Schering Looks Ahead To Simponi Launch In Canada, Europe After Sluggish Q1

Canadian launch of the once-monthly anti-TNF is targeted for the second half; the market represents the first approval for the biologic.

Schering-Plough plans to launch Simponi (golimumab), a once-a-month treatment, in Canada during the second half of the year, now that regulatory authorities have approved the tumor necrosis factor inhibitor for three inflammatory disease indications.

Health Canada's recent approval marks the first regulatory clearance for the drug, which will join a crowded field that already includes Schering and Johnson & Johnson's Remicade , Abbott's Humira and Amgen and Wyeth's Enbrel . Schering, partnered with J&J on the drug, owns the rights to market it outside the U.S.

During a first-quarter conference call on April 21, Schering execs talked up the pending Simponi launch in Canada, as well as in Europe, where a marketing authorization application was submitted in March 2008. The Canadian approval, announced April 13, was one of the highlights in an otherwise lackluster quarterly earnings release in which the drug maker reported that net sales declined 6 percent to $4.4 billion. The culprits? The negative impact of foreign exchange from the strengthening dollar and lower sales of its Vytorin and Zetia cholesterol joint venture with Merck.

Merck also reported lower quarterly sales the same day, further highlighting the reasons behind the decision by the drug makers to merge ( ¹ (Also see "Merck Delays Migraine Drug Filing; Q1 Sales Fall Short of Analyst Expectations" - Pink Sheet, 21 Apr, 2009.) ). Merck announced plans to acquire Schering in March for $41.1 billion, a mega-deal that highlights the R&D and health care challenges facing big pharma (² (Also see "Merck/Schering: The Next Wave Of Consolidation" - Pink Sheet, 9 Mar, 2009.)).

Simponi, along with Remicade, has taken a leading role in the mega-merger story. Schering's partnership with Johnson & Johnson includes a change of control provision that could return ownership rights to the drugs to J&J in the event of an acquisition. Merck orchestrated a complicated reverse-merger buyout structure in an attempt to thwart any effort by J&J to regain full control, but it is expected that J&J will do its share of legal maneuvering or negotiating to hash out some kind of deal with Merck.

So far, no updates have been given by any of the companies involved on how those negotiations are proceeding.

Drug offers dosing benefit over other anti-TNFs

Simponi, which was granted Canadian regulatory approval for the treatment of moderately to severely active rheumatoid arthritis, active psoriatic arthritis and active ankylosing spondylitis, offers a once-monthly dosing benefit over the other leading anti-TNFs on the market.

It also is administered subcutaneously, which differentiates the medication from Remicade (infliximab), which is administered by intravenous infusion bi-monthly, and positions it to compete more effectively against Enbrel (etanercept) and Humira (adalimumab), which also are administered as subcutaneous injections.

But while discussing the marketing opportunity ahead for Simponi in Europe during Schering's quarterly conference call, Carrie Cox, Schering-Plough's Global Pharmaceutical president, maintained there is room for both Simponi and Remicade in the market.

"In many countries, Remicade is really considered more of a hospital product, so its budgeting and reimbursement is sometimes treated differently than subcutaneous products," she said. "We think that is also a benefit for us in being able to bring both Remicade and Simponi into the marketplace."

"In many cases, these will be different prescribers who will now be the primary prescribers in Europe for each of the products, though we think most physicians who prescribe in this category will have use for both products," she added.

Simponi to be positioned in outpatient market

For example, she explained, the long marketing history of Remicade and physician awareness of its efficacy will continue to drive growth of the brand, while in contrast, Simponi will help Schering to compete more broadly in the outpatient setting, where Humira and Enbrel dominate the market.

Approval of the biologic also is anticipated in the near term in the U.S. J&J filed a Biologic License Application with FDA in June 2008.

Growth among the anti-TNFs was booming but recently has slowed, particularly in the U.S., possibly because the current economic environment is making it difficult for patients to cover the out-of-pocket costs for the drugs.

Abbott reported sales of Humira below expectations April 15, although still growing. Sales of Humira were up 16.7 percent globally year over year to $1.02 billion; U.S. sales were up 2 percent to $410 million.

Schering-Plough reported 2 percent growth in Remicade sales to $518 million in the first quarter. Overall, sales growth in the quarter was down 20 percent due to the effects of foreign exchange. On April 15, J&J reported that U.S. sales of Remicade in the first quarter rose 9 percent to $737 million. Wyeth and Amgen have yet to report first-quarter results.

-Jessica Merrill ([email protected])