J&J, AbbVie Shares Drop on Potential Drug Competition

Shares of AbbVie Inc. and Johnson & Johnson took a hit Friday after U.S. Food and Drug Administration briefing documents hinted a cheaper competitor for the drug companies' blockbuster anti-inflammatory treatments could be headed to market soon.

The FDA released the documents a week ahead of Celltrion Inc.'s panel meeting suggesting the Korean pharmaceutical's proposed biosimilar of Johnson & Johnson's Remicade is close enough to be used to treat the same conditions, including arthritis.

The drug, CT-P13, is already approved and sold outside the U.S. under trade names Inflectra and Remsima. It is licensed to Pfizer Inc.

Data show Celltrion's treatment is "highly similar" to U.S.-licensed Remicade and that "there are no clinically meaningful differences" in terms of the safety, purity and potency, according to the documents.

Shares of Johnson & Johnson fell 3.5% to $100.84. Global sales of Remicade already have started to slump as the drug has faced biosimilar competition in Europe. Investors fear that Celltrion's lower-cost biosimilar could dent those sales further.

Meanwhile, shares of AbbVie, which makes the arthritis drug Humira, sank 5.9% to $53.44. Humira had U.S. sales of $8.4 billion in 2015, representing 62% of AbbVie's U.S. revenue.

Credit Suisse Group AG analyst Vamil Divan said most notable is the FDA's apparent comfort with extrapolating the clinical data from studies of rheumatoid arthritis and ankylosing spondylitis to support approval for the biosimilar for all conditions where Remicade is currently approved.

"We believe this bodes well not just for CT-P13 but also future biosimilars that are in development for a variety of blockbuster branded products that are used across a range of indications," he said.

As Leerink Partners LLC analyst Jason Gerberry points out, the news is a positive for smaller biosimilar developers with battered stocks of late. Shares of Coherus BioSciences Inc., down 50% over the past three months, shot up 9% to $14.42 while shares of Epirus Biopharmaceuticals Inc., down 34% over the past three months, rose 5.1%.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

February 05, 2016 13:55 ET (18:55 GMT)

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