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Teva Sees Limited Competition in Biosimilar Market
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Teva Sees Limited Competition in Biosimilar Market

Teva Sees Limited Competition in Biosimilar Market
News

Teva Sees Limited Competition in Biosimilar Market

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Israel-based Teva and several other drug makers are developing new versions of existing biologics, which are large-molecule drugs derived from living organisms. Teva is testing a drug resembling Amgen Inc.'s /quotes/zigman/19815/quotes/nls/amgn AMGN +0.12% Neulasta treatment for low white blood cell counts in cancer patients, which Teva hopes to begin selling in around 2013.

"I don't believe it's going to be a crowded space," Teva Chief Financial Officer Eyal Desheh said in an interview this week at the J.P. Morgan healthcare conference in San Francisco. "It's a long and risky road to developing those."

The field is different from Teva's core business of selling traditional generic drugs, which has heavy competition. Traditional generics are near-identical copies of small-molecule drugs, such as Eli Lilly & Co.'s (LLY) antipsychotic Zyprexa, and are easier and less expensive to develop and manufacture.
Biosimilars are expected to be a big market, but developing and manufacturing them will be more complex and expensive, said William Marth, president and CEO of Teva's Americas unit, at the conference in San Francisco.

"It will be much more difficult than what people think about when they think of generics," Marth said. He estimated that the cost of developing a single biosimilar would be about $200 million to $300 million, higher than earlier estimates of about $100 million. The cost to develop a generic drug is lower.
On the flip side, prices for biosimilars are expected to be discounted more narrowly from the original drug, versus the steep discounts for generics.

A clear regulatory pathway for biosimilars hasn't been finalized in the U.S., but it's likely to have tougher requirements than for traditional generics.

For example, companies may have to run big clinical trials to prove that the safety and effectiveness of a biosimilar is comparable to the original drug. In contrast, generic pharmaceuticals can be approved for sale based on laboratory tests and other proof that they are equivalent to the original.

Due to the barriers, many companies have formed biosimilars alliances to spread the cost and risk. Teva has a joint venture with Lonza Group to develop biosimilars. Amgen recently formed a biosimilar partnership with Watson Pharmaceutical Inc., and Biogen Idec Inc. has teamed up with Samsung Pharmaceutical Industries Ltd.

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