Novartis spends on manufacturing, expecting big biosimilar payoff
Sandoz, the generics and biosimilars unit of Novartis ($NVS), has big ambitions when it comes to biosimilars. And the drugmaker is investing $1 billion in its manufacturing operations to realize them.
The Swiss drugmaker said on Monday that it is aiming to have 11 biosimilar regulatory filings in the can by the end of next year and 5 approvals in the U.S. and other “key geographies” by 2020. Those 5 are copies of megablockbusters Enbrel from Amgen ($AMGN) and Pfizer ($PFE), Humira from AbbVie ($ABBV), Remicade from Johnson & Johnson ($JNJ) and Merck ($MRK), Rituxan from Roche ($RHHBY), as well as Neulasta from Amgen, which was approved last year.
To have the capacity to produce those drugs, Novartis said it expects to have invested $1 billion in the decade between 2010 and 2020 in its biomanufacturing facilities in Schaftenau and Kundl, Austria.
The company opened a plant last year in Schaftenau to manufacture autoinjectors for its one approved biosimilar, Zarxio, a copy of Neupogen, as well as other drugs. Sandoz invested about €150 million ($170 million) in the BioInject facility, which opened with about 100 workers. It has the capacity to manufacture 18,000 and package 100 syringes a minute.
In an email a Novartis spokesperson Duncan Cantor said that with the new BioInject plant, Novartis has invested $400 million in its biosimilar production since 2010. “We have an additional $600 million investment planned over the next 5 years to contribute to securing delivery of the next wave of biosimilars and novel biologics for Sandoz and Novartis Pharmaceuticals respectively,” Cantor said.
The $1 billion to be invested is small compared to the potential payout if it gets its future biosimilars approved. The reference products for the 5 approved biosimilars it sees in its 2020 portfolio generated nearly $44 billion in 2015 global sales.
The $1 billion also equates the amount of savings that CEO Joseph Jimenez said in January the company expects to achieve by 2020 by pulling all of its manufacturing into one overreaching operation and also by changing up its R&D operations.