Sandoz, the generic arm of Novartis AG (NYSE:NVS), has received marketing authorization from the European Commission (EC) for Tyruko (natalizumab), a biosimilar of Biogen’s multiple sclerosis (MS) drug, Tysabri. This approval allows Tyruko to be used as a single disease-modifying therapy in adults with highly active relapsing-remitting MS, the same indication as the reference drug Tysabri.

Polpharma Biologics developed the biosimilar, with Sandoz entering into a global commercialization agreement for it in 2019. Under this agreement, Polpharma Biologics handles the medicine’s development, manufacturing, and drug substance supply, while Sandoz holds exclusive global licensing rights for commercialization and distribution across all markets.

Last month, the FDA also approved Tyruko as a monotherapy to treat all indications covered by Tysabri, including clinically isolated syndrome, relapsing-remitting MS, active secondary progressive disease, and Crohn’s disease in adults.

Tysabri is a cornerstone of Biogen’s MS drug portfolio, which includes Tecfidera, Vumerity, Avonex, Plegridy, and Fampyra. Tysabri sales reached $955.9 million in the first half of 2023. Consequently, the approval of this biosimilar in both the EU and the United States presents a significant opportunity for Sandoz.

Novartis shares have risen by 12.2% year-to-date, surpassing the industry’s 6.1% growth.

Sandoz’s Strong Position in the Biosimilars Market

Sandoz has been performing well recently, boasting a robust portfolio of eight marketed biosimilars and a pipeline of 25 compounds in various stages of development.

Previously, Sandoz announced that the Committee for Medicinal Products for Human Use of the European Medicines Agency had adopted a positive opinion, recommending marketing authorization for the biosimilar trastuzumab, developed by EirGenix, Inc., for breast and gastric cancer treatment.

Earlier this month, Sandoz entered into a development and commercialization agreement with Samsung Bioepis to commercialize biosimilar SB17, an investigational biosimilar of Johnson & Johnson’s Stelara (ustekinumab), which is used to treat autoimmune disorders such as Crohn’s disease, plaque psoriasis, psoriatic arthritis, and ulcerative colitis. Stelara sales reached $5.2 billion.

Per the terms of the agreement, Sandoz will have exclusive commercialization rights for biosimilar SB17 in the United States, Canada, the European Economic Area, Switzerland, and the U.K.

The deal is expected to strengthen Sandoz’s immunology franchise, particularly given J&J’s settlement with Amgen, delaying the launch of a biosimilar version of Stelara until January 2025.

Novartis to Spin Off Sandoz

Novartis has also confirmed plans for the complete spin-off of Sandoz, with the trading of new Sandoz Group AG shares and American Depositary Receipts (ADRs) set to begin on October 4, 2023. This spin-off will be achieved through a dividend-in-kind distribution by Novartis, with each Novartis shareholder receiving one Sandoz share for every five Novartis shares, and each Novartis ADR holder receiving one Sandoz ADR for every five Novartis ADRs. The spin-off is expected to be tax-neutral for Swiss tax and U.S. federal income tax purposes.

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