Market Strengths and Weaknesses in Biosimilars - Pharmaceutical Technology

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Market Strengths and Weaknesses in Biosimilars
An examination of the current and projected market for biosimilars, development costs for biosimilars compared with small-molecule generic drug, and partnerships in biosimilars. This article is part of a special issue on outsourcing.

Pharmaceutical Technology
Volume 36, Issue 8, pp. s34-s38, s60

Strategic partnerships in biosimilars

Table I: Select partnerships in biosimilars among contract service providers, generic-drug companies, and innovator-drug companies.
The biosimilars market has engendered several strategic partnerships among innovator biopharmaceutical companies, traditional generic-drug companies, new players to the biopharmaceutical market, and contract service providers (see Table I). For example, in February 2012, Biogen Idec and Samsung launched a joint venture, Samsung Bioepis to develop, manufacture, and market biosimilars following their December 2011 announcement to form such a partnership. Under the agreement, Samsung is contributing $255 million of the $300 million for an 85% stake, and Biogen Idec is contributing $45 million for a 15% stake in the joint venture. The joint venture, which will be based in Korea, will contract with Biogen Idec and Samsung Biologics for technical development and manufacturing services. Samsung Biologics is a Samsung business formed in April 2011 to specialize in biopharmaceutical manufacturing. The joint venture will not pursue biosimilars of Biogen Idec's proprietary products.

In February 2011, Samsung Electronics entered into a strategic partnership with the CRO Quintiles as part of Samsung's entry into the biopharmaceuticals market. The companies formed a new joint-venture company to provide biopharmaceutical contract manufacturing services in South Korea, with Samsung owning 90% and Quintiles 10%. At the time of the announcement in February, Samsung said it plans to commercialize biosimilars by 2016 and to expand into innovative biologics in the future. The joint-venture company plans to construct a biopharmaceutical manufacturing plant in South Korea with the goal of beginning full-scale operations in April 2013.

Fujfilm began building its biosimilars business in 2011. In November 2011, it agreed to form a 50–50 joint venture for biosimilars with the biopharmaceutical company Kyowa Hakko Kiron. The joint venture was launched in late March 2012, with an initial focus on a biosimilar version of adalimumab. In April 2011, Fujifilm completed its acquisition of the former Merck Biomanufacturing Network, which provides contract biologics manufacturing. The acquisition included facilities in Research Triangle Park, North Carolina, and Billingham, United Kingdom. Merck & Co. had acquired the Billingham facilities through its 2009 acquisition of the contract manufacturer Avecia and the Research Triangle Park facilities as part of its acquisition of Schering-Plough in 2009. Diosynth was the former contract manufacturing activities of Organon, the pharmaceutical business of the Dutch chemical company Akzo Nobel. Schering-Plough acquired Organon in 2007, and Merck & Co. acquired Schering-Plough in 2009. Merck combined the UK and US contract biologic activities into the Merck Biomanufacturing Network, which was acquired by Fujifilm in 2011, and later named Fujifilm Diosynth Biotechnologies. Also in 2011, Fujifilm formed a partnership with Mutsubishi for contract biologics manufacturing under which Mitsubishi took a 20% equity interest in FujiFilm Diosynth Biotechnologies.

Amgen and Watson Pharmaceuticals formed a collaboration in December 2011 to develop and commercialize, on a worldwide basis, several oncology antibody biosimilars. Under the agreement, Amgen will assume primary responsibility for developing, manufacturing, and initially commercializing the oncology antibody products. Watson will contribute up to $400 million in codevelopment costs over the course of development, including the provision of development support, and will share product-development risks. In addition, Watson will contribute its expertise in the commercialization and marketing of products in specialty and generic-drug markets. The collaboration products are expected to be sold under a joint Amgen/Watson label. Watson will initially receive royalties and sales milestones from product revenues. The collaboration will not pursue biosimilars of Amgen's proprietary products.

Baxter and Momenta Pharmaceuticals formed a collaboration in December 2011 to develop and commercialize biosimilars. Baxter will provide its clinical-development and biologic manufacturing expertise while Momenta will provide its expertise in high-resolution analytics, characterization, and product and process development.

In 2011, Merck & Co. partnered with the CRO Parexel by which Parexel will provide strategic access to global clinical development services for designated biosimilar candidates to Merck BioVentures, Merck & Co.'s biosimilars division. Under the agreement, Parexel will provide Merck BioVentures with strategic access to a broad range of regulatory strategy and clinical development planning capabilities for the development of certain broad classes of biosimilars across various therapeutic areas, including exclusivity for certain candidates. The agreement also provides for the establishment of a dedicated Merck BioVentures unit within the Parexel organization. In another deal, in June 2011, Merck & Co. partnered with the Korean chemical company, Hanwha Chemical, to develop and commercialize HD203, a biosimilar candidate of Enbrel (etanercept). Under the agreement, Merck will conduct clinical development and be responsible for manufacturing. In addition, upon marketing approval, Merck will commercialize HD203 globally, except for in Korea and Turkey, where Hanwha retains marketing rights. In return, Hanwha received an upfront payment from Merck and will be eligible for additional payments associated with milestones for technology transfer and regulatory progress as well as tiered royalties on sales.

In June 2012, Merck Serono, a division of Merck KGaA, and India-based Dr. Reddy's Laboratories formed a partnership to codevelop a portfolio of biosimilar compounds in oncology, primarily focused on monoclonal antibodies. The partnership covers codevelopment, manufacturing, and commercialization of the compounds globally, with some specific country exceptions. Dr. Reddy's will lead early product development and complete Phase I development. Upon completion of Phase I, Merck Serono will take over manufacturing and will lead Phase III development. The agreement is based on full R&D cost sharing. Merck Serono will undertake commercialization globally, outside the United States and with the exception of select emerging markets, which will be co-exclusive or where Dr. Reddy's maintains exclusive rights. At the time of commercialization, Dr. Reddy's will receive royalty payments from Merck Serono. In the US, the parties will co-commercialize the products on a profit-sharing basis.

The Merck Serono and Dr. Reddy's partnership marks the first step by Merck Serono to enter the biosimilar space. Earlier this year, Merck Serono set up a dedicated biosimilars unit that will be based in the Canton of Vaud in Switzerland, where the main biologics manufacturing facilities of Merck Serono are located. Also, in September 2011, Boehringer Ingelheim announced plans to establish a new separate business for the development and commercialization of its own biosimilars.


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