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GEN News Highlights : Jun 7, 2012

Merck Serono Enters Biosimilar Segment in Deal with Dr. Reddy's

Companies will share profits in the U.S., while Merck will handle ROW with certain exceptions.

Merck Serono and Dr. Reddy’s Laboratories are allying to develop biosimilars in oncology, primarily focused on mAb therapeutics. The partnership covers co-development, manufacturing, and commercialization of the compounds around the globe, with some specific country exceptions.

The deal structure calls for Merck and Dr. Reddy’s to co-develop the molecules included in the agreement. Dr. Reddy’s will lead early product development and complete Phase I development. Upon completion of Phase I, the Merck Serono division will take over manufacturing of the compounds and will lead Phase III development. The agreement is based on full R&D cost sharing.

Merck Serono and Dr. Reddy’s will co-commercialize the products in the U.S. on a profit-sharing basis. Merck will undertake commercialization elsewhere with the exception of select emerging markets that 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.

This marks Merck’s initiation into the biosimilars space. It began exploring the opportunity last year to assess how it could capitalize on its expertise in biopharmaceuticals and its growing presence in key markets including select emerging markets, the company notes. Earlier this year, it set up a dedicated biosimilars unit that will be based in the Canton of Vaud in Switzerland, where the main biologics manufacturing facilities of the division are located.

“Our expertise in developing, manufacturing, and commercializing biopharmaceuticals gives us a clear advantage in the biosimilars field, and the partnership with Dr. Reddy’s will bring its first-in-market experience in biosimilars as well as its expertise in generics and emerging markets to the table,” says Stefan Oschmann, executive board member of Merck and head of the Merck Serono division. “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.”