Amgen is planning to team up with Watson Pharmaceuticals to develop generic versions of some popular drugs. The partnership will develop and sell lower-priced copycat versions of several biologic cancer drugs, which are usually called biosimilars. Amgen’s deal with Watson will not copy any Amgen drugs.
Amgen executives indicated earlier this year that a biosimilar business might make some sense for the company. Scott Foraker, head of biosimilars at Amgen, said in an interview that Amgen has always said biosimilars have a role as long as the patent protection on the innovative drug was respected. Mr. Foraker said, “We have purposely been keeping it under wraps as long as we could.”
The cost of developing the biosimilars will be split roughly in half between Amgen and Watson, with Watson putting up as much as $400 million in cash or in-kind services. The drugs that will be developed have not been specified by the companies, but some believe that the most likely ones would be the blockbuster products sold by Roche and its subsidiary Genentech. These include Herceptin for breast cancer, Rituxan for lymphomas and Avastin for various cancers. Watson will receive royalties and milestone payments on the sales of the drugs.
Some biotech companies are starting to view the creation of generics of other companies’ drugs as a natural extension of their business. Watson looked at more than 150 potential partners before agreeing to the deal with Amgen. Paul M. Bisaro, chief executive of Watson, said, “We structured the deal with the pre-eminent biologic development company in the world.” It is planned for the drugs to reach the market in the United States around 2018 or 2019, when patents expire.
Amgen would do most of the development, manufacturing and commercialization initially, but over time, the biosimilar market could become more like the market for conventional generic drugs, allowing Watson to play a greater role. Mr. Foraker stated that the partnership would allow Amgen to create biosimilars “in a way that was smart, that didn’t distract the organization from our main innovative business.” Mr. Bisaro, said, “Over time, the commercial relationship modifies. We both have strengths that make sense for each other no matter how the markets develop.”
Amgen executives indicated earlier this year that a biosimilar business might make some sense for the company. Scott Foraker, head of biosimilars at Amgen, said in an interview that Amgen has always said biosimilars have a role as long as the patent protection on the innovative drug was respected. Mr. Foraker said, “We have purposely been keeping it under wraps as long as we could.”
The cost of developing the biosimilars will be split roughly in half between Amgen and Watson, with Watson putting up as much as $400 million in cash or in-kind services. The drugs that will be developed have not been specified by the companies, but some believe that the most likely ones would be the blockbuster products sold by Roche and its subsidiary Genentech. These include Herceptin for breast cancer, Rituxan for lymphomas and Avastin for various cancers. Watson will receive royalties and milestone payments on the sales of the drugs.
Some biotech companies are starting to view the creation of generics of other companies’ drugs as a natural extension of their business. Watson looked at more than 150 potential partners before agreeing to the deal with Amgen. Paul M. Bisaro, chief executive of Watson, said, “We structured the deal with the pre-eminent biologic development company in the world.” It is planned for the drugs to reach the market in the United States around 2018 or 2019, when patents expire.
Amgen would do most of the development, manufacturing and commercialization initially, but over time, the biosimilar market could become more like the market for conventional generic drugs, allowing Watson to play a greater role. Mr. Foraker stated that the partnership would allow Amgen to create biosimilars “in a way that was smart, that didn’t distract the organization from our main innovative business.” Mr. Bisaro, said, “Over time, the commercial relationship modifies. We both have strengths that make sense for each other no matter how the markets develop.”
