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Merck KGaA and Dr Reddy’s to develop cancer biosimilars

Attempt to tap expanding market as company restructuring continues

Merck KGgA is to partner with India-based generics company Dr Reddy's to develop and commercialise biosimilar drugs to treat cancer.

The deal signals Merck's first venture into the expanding biosimilars market as it prepares to restructure its business to cope with expected revenue losses for some of its biggest selling pharmaceutical products.

As part of the agreement, Dr Reddy's will lead development of the products, which are comparable versions of off-patent biologic drugs, up until the completion of the phase I stage.

Merck's pharmaceutical division Merck Serono would then take over manufacturing of the compounds at phase II and will lead phase III development.

Commercially, Merck will hold the rights to market any biosimilars developed as part of the agreement in all markets outside the US with the exception of several unspecified emerging markets. In return Dr Reddy's also be eligible to receive royalty payments from Merck.

In the US, which is on course to implement a Biosimilars User Fee Act similar to the PDUFA to get companies to cover regulatory costs, both Merck and Dr Reddy's will co-market any developed products and will share profits.

“Sharing know-how, risks and rewards is the right approach to enter the emergent biosimilars market and will be a win-win for both parties,” said Stefan Oschmann, head of Merck Serono.

“It further strengthens Merck Serono's promise to live science and transform lives, by increasing access to quality medicines for patients and physicians, while also broadening the value offered to payers.”

The biosimilars market is seen as one of growth for the industry, with patent expiries for biologic products making the products an increasingly viable alternative to branded products. The complex nature of biologics means that traditional generic copies are almost impossible to manufacture, while the capabilities required for developing biosimilars makes it a harder market to enter, with less competition than is seen in the generic arena.

Other companies to move into the biosimilars market in recent months include Amgen, which in December, 2011, announced a collaboration  with Watson Pharmaceuticals to develop several cancer biosimilars.

Meanwhile, regulatory agencies on both sides of the Atlantic have also been reacting to the increased interest in biosimilars, with the European Medicines Agency (EMA) revising its guidance while the US Food and Drug Administration (FDA) published its own development pathway earlier this year.

6th June 2012

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