Who Profits When Patents Expire? The Billion-Euro Race Between Formycon, Fresenius and Pfizer

Formycon: Gamechanger?

The biosimilar developer's latest announcement sparked a share price rally, sending shares up more than 10%. The US Food and Drug Administration (FDA) has accepted the marketing authorisation application for FYB206, a biosimilar candidate to the cancer drug Keytruda, for review. According to the company, this is the first publicly known application of this kind the FDA has accepted. The cancer treatment from US pharmaceutical giant Merck & Co. most recently generated worldwide revenue of USD 31.7 billion. Formycon expects an approval decision in the third quarter of 2027.

Speed has emerged as a key success factor. According to the company, the FDA-agreed waiver of the Phase III trial is a major reason FYB206 reached the FDA review stage so quickly. Formycon expects this to save investment in the high double-digit millions of euros. Generally, the first biosimilars on the market benefit before price competition sets in.

Last December, Formycon and Zydus agreed an exclusive licensing and supply agreement for FYB206 in the United States and Canada. Formycon's role covers development, the preparation and submission of the marketing authorisation documents and the supply of the product. The FDA's acceptance of the application now entitles Formycon to a milestone payment from Zydus.

Formycon currently has three internally developed biosimilars commercially available on the market. FYB201, a biosimilar to Lucentis (ranibizumab), addresses retinal diseases. FYB202 is based on the anti-inflammatory drug Stelara (ustekinumab). FYB203 is a biosimilar to the eye medication Eylea (active ingredient: aflibercept). FYB203 has complemented the European offering since May 2026, with the US market launch scheduled for the fourth quarter of 2026.

The company recently announced measures to improve development efficiency. A central platform is intended to simplify the extensive trial documentation, while additional AI tools support the analysis of manufacturing data. Formycon expects the new documentation system to deliver internal efficiency gains of around 20%.

For the current financial year, management has indicated revenue in the target range of EUR 60 to 70 million and an operating result (EBITDA) of EUR 0 to 10 million. Analysts have set an average price target of around EUR 40 per share, implying potential to almost double. Following the latest milestone, experts will likely raise their price targets soon.

Pfizer: High Dividend, Moderate Valuation, but Limited Upside?

Pfizer is a major global pharmaceutical group that develops, manufactures and markets prescription medicines and vaccines, including those for cancer and infectious diseases. Patent expiries and a declining COVID business are weighing on performance. An additional US approval for the cancer drug Tukysa recently stood out as a positive development. The extension applies in combination with two antibodies as maintenance therapy after initial treatment for certain advanced HER2-positive breast cancers, significantly expanding the addressable market.

In the second quarter, the pharmaceutical giant beat market expectations, posting revenue of USD 15.03 billion and adjusted earnings of USD 0.77 per share. The reported loss per share of USD 0.04 was caused by write-downs of intangible assets of USD 4.3 billion. At the half-year mark, the company had around USD 63.2 billion in short- and long-term financial debt against USD 11.7 billion in cash and short-term investments.

The US group confirmed its 2026 guidance for adjusted EPS in the range of USD 2.80 to 3.00. This implies a P/E ratio of around 10, representing a moderate valuation. An annualised dividend yield of around 6% is also appealing. Nevertheless, most analysts view the shares as fully valued.

Fresenius: Expansion in Biosimilars

The healthcare group divides its business into two operating pillars. Kabi offers medicines including biosimilars, which also include Formycon's ustekinumab biosimilar Otulfi, clinical nutrition and medical technology. The Helios division is positioned as a hospital operator, particularly in Germany and Spain.

As recently announced, Fresenius is acquiring the remaining 45% stake in the biosimilars platform mAbxience for up to EUR 750 million. Fresenius CEO Michael Sen commented: „With the completion of the acquisition of mAbxience, we are reaching the next milestone in building a leading, vertically integrated biopharmaceutical business of significant scale."

In the summer, the group reduced its stake in dialysis specialist Fresenius Medical Care (FMC) to 25% plus one share. At current prices, the holding has a market value of around EUR 2.5 billion. Overall, the operating business is running smoothly. In the second quarter, Fresenius generated revenue of EUR 5.86 billion, with disproportionately strong growth in EBIT before special items of 10% to EUR 719 million.

In this context, the group raised its 2026 earnings forecast. Core earnings per share, adjusted for special items, are now expected to rise by 10 to 15% at constant exchange rates, up from the previously indicated 5 to 10%.

At a share price of EUR 43, the company is valued at EUR 24 billion; its 2027 P/E ratio of 11.2 points to an attractive valuation. Analysts see around 30% upside over the next 12 months. On November 4, the healthcare group will publish its third-quarter figures.

Conclusion

Formycon has reached a decisive milestone. Analysts believe the share price could almost double over the next 12 months. The stock can also be classified as a pure play in the biosimilars sector. The acquisition by Fresenius underlines the attractiveness of this business. According to analysts, the healthcare group's stock offers considerable upside. Pfizer is attractive due to its low valuation and high dividend yield, but faces innovation and debt pressures.