2 drug giants are feuding over a highly successful new migraine drug, and court documents reveal how profitable the $10 billion market could be
- Two drugmakers, Amgen and Novartis, have worked together for years on a new type of cutting-edge migraine drug, Aimovig.
- Now, though, they're involved in a bitter fight. Amgen is trying to get out of the collaboration, while Novartis is now suing Amgen to keep it in place.
- Aimovig costs roughly $7,000 a year and was the first of a new category of migraine drugs to get to market. The lawsuit provides a window into how successful it has been, and how much Novartis stands to lose in the disagreement.
Years ago, two big drugmakers partnered to bring a new kind of cutting-edge migraine medication to patients.
The collaboration was wildly successful. Maybe too successful.
But Novartis isn't taking it lying down. The drug giant just sued Amgen, arguing that its partner doesn't have a legitimate reason to end the collaboration. Novartis even accuses Amgen of trying to keep all the profits from the migraine drug for itself.
The squabble, now poised to play out in court, comes as their product, Aimovig, leads a new and competitive category of migraine drugs that could be worth as much as $10 billion.
The drugs cost roughly $7,000 a year in the US, and about 210,000 American patients have taken Aimovig so far, with about 20,000 patients outside the US, according to the Novartis complaint.
"In the short time since it has been launched in the US, the product has become a runaway success and the number of patients being treated has vastly exceeded what Amgen and Novartis Pharma projected," the complaint, which was filed on Thursday, says.
Millions of Americans suffer from migraines, and about three to seven million have chronic, debilitating migraines each month. Though many think of migraines as simply head pain, those who get them also often experience vomiting, dizziness and sensitivity to lights, smells and sounds.
A new class of migraine drugs aim to offer relief to those who experience migraines more frequently. Aimovig was the first to get approved in the US, and others quickly followed.
(The companies will work to make sure the disagreement won't affect patient access, Amgen told Business Insider in a statement.)
A yearslong collaboration, now threatened by a dispute
The collaboration between Novartis and Amgen on Aimovig dates back to 2015.
The origins of their quarrel also started that year, when a unit of Novartis called Sandoz began working with another migraine company, the biotech Alder Biopharmaceuticals. Sandoz was manufacturing the experimental migraine drug ALD403 at a factory in Austria.
Novartis says it only found out about the agreement this past summer, and, in the interest of being a good partner, gave Amgen a heads up.
Amgen objected, and the two companies have been going back and forth about it since then. On Tuesday, Amgen gave Novartis notice that it wanted to terminate their collaboration.
Alder's ALD403 has indeed been positioned as a rival product to Aimovig and other, already-approved drugs from generic drugmaker Teva and pharma Eli Lilly. They all use a similar scientific approach to treating migraines preventatively, or before they happen.
Novartis says it risks losing more than $500 million
But in the complaint, which was filed in the Southern District of New York, Novartis argues that ALD403 isn't really a threat to Aimovig.
The experimental drug, which hasn't currently been approved anywhere, "differs significantly from, and will not fully compete with, Aimovig," Novartis's complaint says. That's because it will be the fourth type of new migraine product and has to be injected by a doctor at their office, while patients can self-inject Aimovig.
The Swiss drug giant also says it's invested too much in Aimovig to get cut out now, having spent about $530 million to help out with the US launch last May.
Amgen gets the bulk of US sales for Aimovig, which amounted to roughly $120 million last year, and pays royalties to Novartis. Novartis, meanwhile, under their agreement gets commercial rights outside of the US.
And though the companies haven't really disclosed how that breaks down, most assume they're roughly splitting profits, Mizuho analyst Salim Syed said.
Ending the agreement now would mean doing so "before Novartis Pharma has come close to earning a return on its investment," Novartis says.
"Amgen's purpose is all too apparent," the complaint continues. "On the heels of Aimovig's successful launch, Amgen wants to cut Novartis Pharma out of the future sales of Aimovig in the U.S."
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