Mylan, Biocon copy inches closer to challenging Sanofi's long-suffering Lantus

Sanofi’s Lantus is already facing off against generic competition from Eli Lilly and Boehringer’s Basaglar, but now Mylan is adding to the pressure by prevailing in a patent challenge at the U.S. Patent and Trademark Office. 

The PTO’s Patent Trial and Appeal Board invalidated two Lantus formulation patents, knocking down one barrier to market for Mylan and its partner Biocon as their generic awaits a decision at the FDA. The partners still face a patent fight with Sanofi in court; Lilly and Boehringer launched their copycat, Basaglar, in 2016 under a patent settlement with the French drugmaker.

Mylan's copy will be gunning for Sanofi’s billions in Lantus sales, but the once-dominant basal insulin has already been hit hard by Basaglar and other competition. Lantus revenue plummeted 31.7% in the third quarter to €419 million, thanks to lower net prices and coverage changes in Medicare Part D. 

In fact, the pricing pressure on Lantus and its fellow basal insulins—including still-on-patent brands—actually convinced Merck to discontinue development on its own copycat back in October. At the time, a Merck spokesperson said the company had assessed the market outlook, including "anticipated pricing and cost of production," before nixing the deal. 

Analysts weren’t exactly surprised by the news. Wells Fargo’s David Maris wrote that Merck dropped out due to a "deteriorating pricing environment." And while some market watchers thought the development was a positive for Mylan, Maris thought otherwise. 

"In our opinion, if Samsung Bioepis and Merck can't make the economics work, then one should be skeptical of Mylan and Biocon having substantial success," he added. 

While Maris was skeptical of the partners’ future success, Evercore ISI Analyst Umer Raffat wrote that Merck stepping aside may benefit Mylan. The company "will no longer have to compete with a diabetes giant" for sales, he wrote.

Pricing woes aside, Mylan and Biocon have already suffered a regulatory setback at the FDA after the agency documented manufacturing problems at a Biocon plant in Malaysia. Now, they've resubmitted their application. The partners have already secured European approval for the drug as Semglee.  

Meanwhile, as Mylan and Biocon work to advance their product, the FDA is making its own moves to boost insulin competition. This week, FDA commissioner Scott Gottlieb said insulin prices are unacceptably high and that the agency will reclassify them as biologics in 2020 to help support biosimilar development and boost competition.

Currently, insulins are classified as drugs; Gottlieb said this makes it difficult for companies to develop insulin copycats through the traditional generic pathway.

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