Patent: How Pfizer, Bristol Myers Squibb, and Johnson & Johnson Are Addressing Patent 2024 Expirations

Patent: The pharmaceutical industry is confronting a significant patent cliff, with the potential loss of hundreds of billions in sales as more than 190 products are set to lose exclusivity between 2022 and 2030. This isn’t the first time the industry has faced such a challenge; for example, in 2016, major products like Crestor (rosuvastatin) and Glivec (imatinib) went off-patent. However, while the 2016 patent expirations were expected to reduce brand-name sales by $100 billion, the upcoming expirations could jeopardize over $300 billion in sales between 2023 and 2028, according to Eduardo Schur, EY US health sciences & wellness commercial strategy and R&D lead,.

What sets the forthcoming patent expirations apart is the inclusion of numerous biologic medicines. Previous loss of exclusivity (LOE) waves mainly involved small molecule medicines, but the higher proportion of biologics this time could alter the speed and extent of sales declines. Biosimilars tend to gain market share more slowly than generic drugs. AbbVie’s defense of Humira (adalimumab), a biologic, demonstrated that it is possible to maintain sales despite competition from biosimilars.

Pharmaceutical companies employ various strategies to mitigate the impact of LOEs, such as extending sales through additional patents. This year, there has been evidence of other tactics, including mergers and acquisitions (M&A) and cost reductions.reviewed how three pharmaceutical companies facing substantial patent cliffs are preparing for these challenges.

Company: Pfizer Patent

Products: Eliquis, Ibrance, Prevnar 13, Xtandi

Pfizer is currently navigating a difficult period as the patents for four of its key products are set to expire between now and 2027. Eliquis, a blood thinner, and Ibrance, a breast cancer treatment, accounted for 20% of the company’s revenue in 2023. Although the sales of the pneumococcal vaccine Prevnar 13 and the prostate cancer therapy Xtandi are not as high, they are still significant contributors to the company’s earnings.

To counteract the anticipated drop in sales from these products and declining revenue from its COVID-19 offerings, Pfizer made a strategic move to secure its future earnings. The company announced a $43 billion acquisition of Seagen, a leader in antibody-drug conjugates (ADCs), early last year. Following this acquisition, Pfizer expanded its ADC portfolio by entering into a licensing agreement with Nona Biosciences for HBM9033, an ADC targeting mesothelin.

Brian Winne, a senior life sciences analyst at RSM US, noted that mergers and acquisitions (M&A) are a common strategy for pharmaceutical companies facing patent expirations. “We’ve seen significant M&A activity in the fourth quarter of 2023 and the first quarter of 2024. More M&A and licensing deals are likely, as they allow companies to strengthen their pipelines without starting research and development from scratch,” Winne said.

Company: Bristol Myers Squibb Products : Eliquis, Opdivo Patent

Bristol Myers Squibb, which collaborates with Pfizer on Eliquis, is encountering its own patent expiration challenges. One major product, the multiple myeloma treatment Revlimid, has seen a significant decline in revenue due to generic competition entering the market in 2022, with revenue dropping from $12.9 billion in 2021 to $6 billion in 2023.

Unlike Revlimid, Bristol Myers Squibb may maintain higher sales for its cancer therapy Opdivo because the circumstances for biologics losing patent protection differ. According to Schur, the high costs associated with developing biosimilars often result in fewer competitors challenging the original product. Furthermore, Bristol Myers Squibb might extend Opdivo’s patent life by creating new formulations, such as a subcutaneous version of the drug.

Schur also highlighted that some companies have succeeded with various intellectual property strategies. AbbVie’s approach with Humira, where they sought or secured 250 patents, serves as a prominent example.

However, Winne pointed out that this strategy of constructing a “patent thicket” is politically contentious in the U.S., potentially limiting its widespread effectiveness. In April, the Federal Trade Commission launched an “expanded campaign” against manufacturers’ “improper or inaccurate listing of patents,” citing Novo Nordisk’s weight-loss drug Ozempic (semaglutide) as a case in point, due to concerns over delaying cheaper generics. Additionally, at the beginning of the year, Bristol Myers Squibb’s CEO was summoned to testify before the Senate health committee regarding high drug prices. During the hearing, committee members accused Bristol Myers Squibb and other companies of exploiting the patent system to delay market entry of competitors following the loss of exclusivity.

Patent Company: Johnson & Johnson

Product: Stelara

Johnson & Johnson is grappling with a significant patent expiration concerning its blockbuster product, Stelara. Stelara, which treats conditions like plaque psoriasis and Crohn’s disease, generated $10.9 billion in revenue for the company in 2023. Despite it

s patent expiring in September of that year, no competitors have yet entered the market. Agreements with Amgen and Alvotech/Teva ensure their biosimilars won’t be sold until 2025.

To offset potential sales declines, J&J is pursuing several strategies. They are developing alternative treatments such as Tremfya, an IL-23 blocker, which has shown promising results in Phase II/III trials for Crohn’s disease, outperforming Stelara. Additionally, J&J has streamlined its operations by reducing expenses and restructuring. This includes spinning off its consumer business as Kenvue in 2021 and planning to divest its remaining stake. Job cuts and reduced investment in R&D projects are also part of their efforts to overhaul their pipeline and control costs, a move echoed by other pharmaceutical giants like Pfizer and BMS.