Merck Serono and Dr Reddy’s Laboratories (DRL) have announced a partnership to co-develop a portfolio of biosimilar compounds in oncology, primarily focusing on monoclonal antibodies (MAbs). The partnership covers co-development, manufacturing and commercialisation of the compounds around the globe, with some specific country exceptions.
The deal structure calls for Merck and DRL to co-develop the molecules included in the agreement. DRL 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 commercialisation globally, outside the US and with the exception of select emerging markets which will be co-exclusive or where DRL maintains exclusive rights. At the time of commercialisation, DRL will receive royalty payments from Merck Serono. In the US, the parties will co-commercialise 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 programme, through a diversified business focused on delivering long-term value and growth opportunities.
The Merck Serono and DRL’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 capitalise 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 commercialising biopharmaceuticals gives us a clear advantage in the biosimilars field and the partnership with DRL will bring their first-in-market experience in biosimilars, as well as their expertise in generics and Emerging Markets, to the table. 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,” said Stefan Oschmann, Executive Board Member of Merck and head of the Merck Serono division.
GV Prasad, Vice-Chairman and Chief Executive Officer, DRL 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 commercialisation capabilities. Merck’s and Dr Reddy’s joint expertise in these fields makes for a powerful global partnership.”
EP News Bureau — Mumbai
