(This version of the story corrects that Zarzio is a version of Amgen's Neupogen, not Neulasta, and that Zarzio was priced at a discount to Neupogen, not Neulasta, in final two paragraphs)
By Ransdell Pierson
U.S. Food and Drug Administration staff members on Friday said Celltrion Inc's biosimilar form of Johnson & Johnson's Remicade arthritis drug appeared "highly similar" to the widely used branded product.
The news sent shares of J&J, whose annual Remicade sales of $6.5 billion are mostly in the United States, down almost 4 percent. It also hit AbbVie Inc and Amgen Inc, whose arthritis treatments work the same way.
AbbVie, whose Humira is the world's top-selling drug, fell nearly 6 percent, and Amgen, maker of Enbrel, was down 3 percent. Pfizer Inc, which has teamed up with South Korea's Celltrion in marketing the biosimilar, rose nearly 1 percent.
FDA scientists released their favorable report ahead of a meeting Tuesday of an independent medical advisory panel to the agency. The panel will decide whether to recommend approval of Remsima to treat rheumatoid arthritis and inflammatory bowel conditions like Crohn's disease.
Celltrion and Pfizer want to sell Remsima in the United States as a cut-price copy of Remicade, or infliximab. Some analysts expect it to sell for a 25 percent discount.
"The data submitted by Celltrion show that (Remsima) is highly similar to U.S.-licensed Remicade" in treating rheumatoid arthritis and a related condition called ankylosing spondylitis, the FDA briefing paper said. It cited only "minor differences in clinically inactive components."
Celltrion presented the FDA with clinical data on the use of Remsima against rheumatoid arthritis and ankylosing spondylitis, but the FDA's staff said it is likely also safe and effective for other conditions Remicade treats, including Crohn's and ulcerative colitis.
Raymond James analyst Chris Raymond said that broad interpretation of Remsima's likely effectiveness could signal its approval as a treatment for all diseases for which Remicade can now be marketed.
"As such, we remain cautious on Amgen shares," Raymond said.
Morningstar analyst Damien Conover said Remsima and one other Remicade biosimilar may be introduced in the United States in 2018. The branded J&J drug could lose half its sales by 2020, he added.
"The biggest potential damage could be to J&J, which has U.S. rights to Remicade," said Conover. He predicted Pfizer would capture about $500 million in annual Remsima sales.
The FDA report did not hurt shares of Merck & Co, which sells Remicade overseas. But the stock slumped Wednesday after the company said biosimilar competition in Europe helped drive its fourth-quarter sales of Remicade down almost 30 percent to $396 million.
Celltrion already sells Remsima in dozens of other countries. Remicade, Humira and Enbrel work by blocking an inflammation-causing protein called Tumor Necrosis factor (TNF). Raymond said more than 60 other anti-TNF biosimilars are in development and could commoditize the drug class much sooner than thought.
Remsima would become the second approved biosimilar in the United States, following Novartis AG's September introduction of Zarzio. That drug is a version of Amgen's Neupogen, which boosts infection-fighting white blood cells in patients who have undergone chemotherapy.
Novartis priced Zarzio at a 15 percent discount to Neupogen.
(Reporting by Ransdell Pierson; Editing by Lisa Von Ahn, Chizu Nomiyama and Bill Trott)