J&J invests in experimental drugs as competitive threats loom

New York

JOHNSON & JOHNSON is investing in a collection of experimental drugs with blockbuster potential, treating widespread illnesses such as blood cancer and Alzheimer's disease, to help rise above looming competitive threats to its pharmaceutical business.

The world's biggest maker of health products said on Wednesday it plans to seek regulatory approval for more than 10 new drugs by 2019 with potential annual sales of more than US$1 billion apiece. That would help J&J regain some momentum in what has become its biggest division, whose drugs approved in the last few years are projected to lag behind its biggest rivals.

Already, J&J's blockbuster hepatitis C treatment Olysio is being eclipsed by competing products from Gilead Sciences Inc and AbbVie Inc. And the company's top-selling medication, biotech arthritis drug Remicade, will soon be contending with imitations sold for cheaper prices.

Those copycat drugs - known as biosimilars - have been a dark cloud forming in the distance, and J&J said on Wednesday that the threat is still years away. The company believes it can enforce its Remicade patents through the third quarter of 2018, chief financial officer Dominic Caruso said. Even after that, the impact won't be dramatic, he said.

"Whatever evolves with biosimilars, it will be gradual," Mr Caruso said in New Brunswick, New Jersey, where J&J held a meeting with investors. "The dynamics in the US will be different from what's happened outside the US."

In Europe, where Remicade is marketed by Merck & Co, biosimilars have undercut the brand-name drug's price by as much as 69 per cent. In the US, the Food and Drug Administration (FDA) is weighing rules on how and when doctors can substitute biosimilars for the brand-name drugs.

As it prepares for biosimilar competition, J&J is investing in treatments where it has previously been a leader - or at least shown promise. The company announced a deal on Tuesday to develop and market Achillion Pharmaceuticals Inc's drugs for hepatitis C, potentially putting it back in the race against Gilead and AbbVie.

And in Alzheimer's, J&J is discussing with partner Pfizer Inc whether to move forward with AAB-003 based on results from an early-stage trial. The experimental drug is a follow-on to bapineuzumab, a medication that failed in a late-stage trial in 2012. AAB-003 will go into patients in earlier stages of the disease, said Husseini Manji, J&J's global head of neuroscience.

Among the drugs J&J has under development are daratumumab, a treatment for the blood cancer multiple myeloma that is on the FDA's fast track for approval. Esketamine, for depression, and ARN-509, for prostate cancer, are in clinical trials.

In addition to neuroscience, infectious diseases and oncology, J&J's new drug lineup will focus on immunology, cardiovascular and metabolism, the company said.

Those are markets with big populations of patients, so a successful drug could lead to faster growth for a company that has been trailing the pack. BLOOMBERG