Novartis and Amgen's dispute over biosimilar drug continues.
Amgen Inc. and Novartis AG have been facing a legal faceoff where both the company came forward in an appeal court in Washington. Novartis has been trying to defend its stance and get the ban lifted from its Zarxio, the biosimilar drug so that they can resume the sales of it. The company has been accused of replicating Amgen’s Neupogen in the United States market.Both the companies are dealing with a lawsuit since October 2014 which is getting intense each day. Amgen is devoted to block the launch of Zarxio which it claims to be an imitation drug. According to sources, Novartis is likely to price its drug relatively cheaper than what Neupogen is retailing at.The Food and Drug Administration authority in the United States gave approval to Novartis for the biosimilar drug in July FY14. Amgen is skeptical about the launch of this drug as the company believes that the launch of Zarxio will actually eat a great chunk of the sales of Neupogen. The sales of this drug are extremely important to Amgen as it contributed almost $1.2 billion to the accumulative revenue of the firm.Amgen came into action in February FY15 and filed a lawsuit against Sandoz, the generic drug division of Novartis in order to put a ban on its launch. The petition was overruled by the Attorney so the company started to file one case after another so that they could delay the launch as much as possible. Despite Amgen tried its best to block Zarxio, FDA approved the drug again on March 6, which then become the first biosimilar drug in the history of United States.This approval was a massive blow for Amgen but this is not it. With the launch of Zarxio many other health care providers business was at stake as many drugs these firms are selling are now relatively obsolete or are useless in front of biosimilar drugs. As analysts predict, these biosimilar drugs are likely to be 20-50 percent cheaper than the prices of branded drugs.After several efforts, Amgens initiatives proved fruitful and a ban was put on Novartis’s Zarxio. Novartis again filed a lawsuit claiming that the accusation on them is extremely baseless as the living cells used in the manufacture of such drugs are different from others so it cannot really be an imitation. However, the courts have not passed a final verdict and the decision is still pending. However, the case is on fast track now so a result might be expected in the coming weeks.
CVS Health Corp is all set to secure a purchase deal worth at $10.1 billion to acquire Omnicare Inc.
CVS Health Corp, the operator for drugstore stated recently that the company is all set to spend around $10.1 billion in order to buy Omnicare Inc. the company is known for supplying prescription along with medicines for the nursing department, health care facilities and assisted living.This initiative by the company makes it the second largest drugstore operator in United States. The company has the access to the older United States population and works on modifying the specialty pharmacy. The purpose of this is to provide drugs that are suffering from chronic diseases whose treatment is relatively expensive.CVS expects that this deal will help them in adding almost 20 cents to the adjusted earnings per share (EPS) in the fiscal year of 2016. The deal also comprises of a debt of almost 42.3 billion reported the firm.The health care sector has been currently consolidating while firms have worked on bargaining for competitive prices along with beefing up the drug manufacturing process along with the three largest drug distributors situated in United States."There's a lot of purchasing scale. There's a lot more volume. They could renegotiate their supply contracts given the volume," said Steven Halper the analyst at FBR.Apart from the sales of the mail order and drugstore chain, CVS also has the honor of being the second largest benefits manager in the US. This allows them to secure pricings for government plans and big employers.CVS has currently offered $98 for each share of Omnicare. This shows that a premium of 4% is visible on the closing price. Omnicare is a reliable name in the health care sector that offers pharmacy related services to the elderly masses.The company seeks to expand its pharmacy business with this deal and according to Reuters this offer is around 21 percent premium to Omnicare when they closed on April 21. It is a day before when Bloomberg mentioned that Omnicare is exploring a sale in the market. Furthermore, the shares of Omnicare in the market jumped to $96, an increase by 1.5 percent was noticed whereas CVS Health Corp shares rose 2.8 percent to $104.08. It was Bloomberg who broke the news regarding CVS’ plans to buy Omnicare in the coming times.Apart from this, CVS has secured a financing deal from Barclays for about $13 billion. It is believed that all pharmaceutical companies are looking for purchases and mergers to bolster their portfolios regardless of the industry they are in.
