(Adds analyst comments, context, updates share movement)
By Shravya Jain and Vidya L Nathan
BANGALORE Jan 5 (Reuters) - Spectrum Pharmaceuticals (SPPI.O) joined the race to develop copy-cat versions of biotech drugs by signing a deal to develop a biosimilar version of Roche's (ROG.VX) blockbuster antibody drug rituximab.
Spectrum's deal with drugmaker Viropro Inc, for which financial details were not revealed, comes after Teva Pharmaceutical Industries (TEVA.TA) launched efforts in May to develop a biosimilar of rituximab. [ID:nLDE68L1CW]
Rituximab, which is sold as Rituxan, is used to treat non-Hodgkin's lymphoma -- a type of cancer -- and rheumatoid arthritis.
"It is a new direction for Spectrum... getting into the biosimilar field could be very lucrative for them," McNicoll, Lewis & Vlak analyst George Zavoico said.
Biosimilars -- generic copies of biotech drugs used to treat complex diseases like cancer -- present companies with attractive revenue building opportunity, while global pharmaceutical players are faced with impending patent cliffs.
Roche's rituximab loses patent protection in 2012. Spectrum said the drug saw sales of $5.6 billion in 2009.
Biosimilars can cost $100 million to develop, as against $5-$10 million for a conventional generic chemical drug, but enjoy far higher margins.
"I don't think they need to capture a significant portion of the $5.6 billion rituximab market for them to get a substantial return on their investment," Zavoico said.
Creating a biosimilar was a complex process and it was good to start early, Roth Capital Partners analyst Joe Pantginis said.
McNicoll's Zavoico said it was likely other companies will start, or probably already have begun, biosimilar development.
Irvine, California-based Spectrum's shares, which have risen 27 percent since December when the company reported positive data from a mid-stage trial of its non-Hodgkin's lymphoma injection, remained flat at $6.86 Wednesday on Nasdaq. (Reporting by Shravya Jain and Vidya L Nathan in Bangalore; Editing by Vinu Pilakkott, Jarshad Kakkrakandy)