More drugmakers are seeing potential in the business of producing copycat versions of expensive biotechnology drugs as U.S. guidelines take shape.

The topic was at the forefront of plans discussed by several executives at this week's JP Morgan healthcare conference in San Francisco.

Kevin Sharer, chief executive officer at Amgen Inc, said the world's largest maker of branded biotechnology drugs would consider entering the "biosimilars" space, particularly in emerging markets like Asia and South America.

Merck & Co said it has struck an alliance with contract researcher Parexel International Corp to develop copies of biotech medicines, deepening the U.S. drugmaker's investment in so-called biosimilar medicines.

Because of the complexity of biotech drugs, which are produced through biological processes that generally involve recombinant DNA technologies, they are often called "biosimilars" rather than generic copies.

"I think we are in a perfect position for this," Biogen Idec CEO George Scangos told Reuters in an interview at the conference. "The next decade will be about access and cost as much as it is about innovation."

He said Biogen, maker of drugs including Avonex and Tysabri for multiple sclerosis, has the expertise and capacity to manufacture a range of biologic products.

"It's a low risk way to generate substantial revenue," Scangos said.

The prospect that companies that make brand-name biotechnology medicines would also try to produce generic versions would seem surprising in that they risk undermining their main business model.

Amgen's Sharer said the company "should participate in an intelligent way without disturbing the core business."

Scangos noted that one of the first big biotech drugs to lose patent protection will be Enbrel, the $3.5 billion rheumatoid arthritis drug sold by Amgen and Pfizer Inc.

Roche Holding Chief Financial Officer Erich Hunziker, whose company is the largest maker of cancer therapies, said at the conference that the Swiss drugmaker plans to defend its products against biosimilar competitors, but he declined to give details.

Roche's cancer drug Avastin -- with annual sales of around $6 billion -- will lose patent protection after Enbrel, Scangos said.

A regulatory system for producing lower-cost generic versions of traditional pills and capsules -- after patents expire -- has been in place for decades, but agreement on a similar pathway for newer biotech drugs has been more difficult.

Lobbying is still underway regarding specific rules for the U.S. biosimilar process, but the U.S. healthcare overhaul law passed last year laid out a framework that includes 12 years of exclusivity for branded biotech drugs.

Because biotech drugs are usually made from living cell lines controlled by different manufacturers, it is impossible for generic companies to make identical copies as they do with simple chemical-based drugs, which do not require fresh clinical trials.

Biosimilars of drugs like Amgen's white blood cell-booster Neupogen are already on the market in Europe.

In the United States, the Food and Drug Administration held a meeting on the topic late last year and is now working on formal guidelines.

Merck, which more than a year ago acquired Schering-Plough in a $41 billion deal, has rejigged its biosimilars strategy in the wake of the regulatory progress, said Michael Kamarck, president of Merck BioVentures.


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Although its an attractive business but only few companies like Pfizer, GSK and Aventis are choosing this path as its really costlier and time consuming with extensive research. In past, many companies try to follow this strategy but only a few of them were successful in creating genetic biosimilars.