(Reuters) - Amgen Inc has reached a settlement with AbbVie Inc that will delay the U.S. launch of Amgen’s cheaper biosimilar version of AbbVie’s cash cow, the blockbuster rheumatoid arthritis drug Humira, until Jan. 31, 2023, the companies said on Thursday.
Humira, known chemically as adalimumab, is by far the world’s top-selling prescription medicine with second-quarter global sales of $4.7 billion, putting it on track for annual sales exceeding $18 billion.
The settlement, which removes a major overhang for AbbVie given its dependence on Humira, sent its shares to an all-time high of $90.95 before settling back to $89.87, up 6 percent.
Under terms of the settlement, which ends all pending patent litigation between the companies, AbbVie said it will be entitled to unspecified royalties on sales of Amgen’s biosimilar of Humira.
The Humira settlement “adds unexpected royalties during the biosimilar years and indicates that AbbVie’s patents ... are defensible,” BMO Capital Markets analyst Alex Arfaei said in a research note.
The settlement also allows Amgen to begin selling its biosimilar of Humira in Europe on Oct. 16, 2018.
”This agreement will allow us to secure a strong foothold in the $4 billion European adalimumab market,” Scott
Foraker, head of biosimilars for Amgen, said in a statement.
Amgen shares were up 0.7 percent at $186.19.
Amgen was the first company to win U.S. approval for a Humira biosimilar, but delayed selling it until the patent situation was resolved. Other companies that also intend to market their own biosimilar versions of Humira are still challenging its patents.
“We believe that this could be a leading indicator for other ongoing litigation with adalimumab biosimilar manufacturers,” Barclays analyst Geoff Meacham said.
Biosimilars are intended to be less costly versions of expensive biotechnology medicines. Because biotech drugs are made from living cells it is not possible to produce exact copies, which differentiates them from generic copies of simple pills that tend to be much cheaper.
(The story refiles to add Thursday in lead paragraph.)
Reporting by Bill Berkrot; editing by Susan Thomas