Merck and Dr. Reddy's Laboratories Ltd., Hyderabad, India, announced today a partnership to co-develop a portfolio of biosimilar compounds in oncology, primarily focused on monoclonal antibodies (MAbs). The partnership covers co-development, manufacturing and commercialization of the compounds around the globe, with some specific country exceptions. The Merck Serono and Dr. Reddy's partnership marks the first step by Merck to enter the biosimilar space. The Merck Serono division 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.
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. The investment required for this initiative is fully reflected in the guidance provided for Merck's 2012 and mid-term financial performance, which was provided to the Capital Markets on May 15, 2012.
"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 their first-in-market experience in biosimilars, as well as their expertise in generics and Emerging Markets, to the table," said 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. 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."
G. V. Prasad, Vice-Chairman and CEO at Dr. Reddy's Laboratories, commented: "We strongly believe that biosimilars is an important area of future growth and these products give us the opportunity to provide affordable and innovative medicines to patients across the globe. With the recent EMA and FDA guidance on biosimilars, it is clear that any significant player in the field will need strong biologics development, manufacturing and commercialization capabilities. Merck's and Dr. Reddy's joint expertise in these fields makes for a powerful global partnership."
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 will undertake commercialization globally, outside the US 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. Additional terms of the deal were not disclosed.
The move into biosimilars by Merck Serono is a part of the Merck Group's transformation program, through a diversified business focused on delivering long-term value and growth opportunities.
Merck Serono has established a dedicated biosimilars unit to develop, manufacture and commercialize biosimilar medicines. The unit is a part of the pharmaceutical division of Merck, Merck Serono, and will be based in the Canton of Vaud in Switzerland, where the main biologics manufacturing facilities of Merck Serono are located and will be leveraged, along with support from other EU biologic manufacturing facilities. The unit is focused on developing molecules through its in-house research and development expertise in biologics, and in partnering with other biosimilar players in key therapeutic areas including oncology and inflammatory disorders.
About Dr Reddy's
Dr. Reddy's Laboratories Ltd. (NYSE: RDY) is an integrated global pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. Through its three businesses - Pharmaceutical Services and Active Ingredients, Global Generics and Proprietary Products - Dr. Reddy's offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars, differentiated formulations and NCEs. Therapeutic focus is on gastro-intestinal, cardiovascular, diabetology, oncology, pain management, anti-infective and pediatrics. Major markets include India, USA, Russia and CIS, Germany, UK, Venezuela, S. Africa, Romania, and New Zealand.
About Merck KGaA
Merck is a global pharmaceutical and chemical company with total revenues of € 10.3 billion in 2011, a history that began in 1668, and a future shaped by more than 40,000 employees in 67 countries. Its success is characterized by innovations from entrepreneurial employees. Merck's operating activities come under the umbrella of Merck KGaA, in which the Merck family holds an approximately 70% interest and free shareholders own the remaining approximately 30%. In 1917 the U.S. subsidiary Merck & Co. was expropriated and has been an independent company ever since.