Merck returning Lantus biosimilar rights negative for Mylan, says Wells Fargo
Wells Fargo analyst David Maris sees a negative read-through for Mylan regarding yesterday's news of Merck Sharp & Dohme Research returning the rights to biosimilar Lantus to Samsung Bioepis. While some view this as a positive, as there will likely be one fewer competitor in the market if Mylan-Biocon make it to the U.S. market, that is a "simplistic and optimistic" take, Maris tells investors in a research note. The more important factor to consider is the "why" Merck dropped out, rather than the number of competitors, the analyst writes. He believes Merck returned the rights to Samsung Bioepis due to the deteriorating pricing environment and pricing outlook for insulin and Lantus biosimilars. Lilly's and Sanofi's manufacturing capacity, along with aggressive discounting, has created a "severe pricing environment," Maris contends. He believes that if Samsung Bioepis and Merck can't make the economics work, than one should be skeptical of Mylan and Biocon having substantial success. Maris has a Market Perform rating on Mylan shares.