January 12, 2011 / 12:58 PM / 9 years ago

UPDATE 2-Merck to develop biosimilars with Parexel

* Latest sign of drug industry interest in biosimilars

* Terms not released

* Merck on track with 5 biosimilars in late study by 2012 (Adds interview comments, background, shares)

By Lewis Krauskopf

NEW YORK, Jan 12 (Reuters) - Merck & Co (MRK.N) struck an alliance with contract researcher Parexel International Corp PRXL.O to develop copies of biotech medicines, deepening the U.S. drugmaker’s investment in so-called biosimilar medicines.

The agreement, for which financial terms were not disclosed, is the latest sign that pharmaceutical and biotech companies, rather than just generic drugmakers, are interested in the burgeoning market for similar versions of pricey biotech medicines.

Merck has previously said it was interested in biosimilars. Under the deal, Parexel will provide access to a range of regulatory strategy and clinical development capabilities for certain broad classes of biosimilars. A dedicated Merck BioVentures unit will be established within Parexel.

Merck selected Parexel based on the contract organization’s expertise in certain product areas “that are going to be very important to us in biosimilars,” said Michael Kamarck, president of Merck BioVentures, although he declined to specify the products.

“We think it’s a critical strategic step for us to assure that we’re going to have all the expertise and the full attention that we need as we develop these products,” Kamarck said in an interview.

Kamarck said the contract’s terms motivate Parexel to enroll patients quickly and generally execute the clinical trials in a speedy fashion.

Merck is ratcheting up its investment in biotechnology medicines, including efforts to develop biosimilars.

The drugmaker told investors last May it expects to have five biosimilar medicines in late-stage tests by 2012. Kamarck said the company is still on track to reach that goal.

Among the medicines in development are versions of Amgen Inc’s (AMGN.O) drugs that boost white blood cells, known as Neupogen and Neulasta.

Kamarck said the Parexel deal was “one of a number of strategic steps” the company is taking in the biosimilars area.

While biosimilar medicines already are on the market in Europe, U.S. regulators are still developing an approval process. Biotech medicines treat areas such as cancer and rheumatoid arthritis, tend to be injected or infused and are more complex to manufacture than pills.

Kamarck said he expected the U.S. government to issue guidelines sometime mid-year on biosimilars, following a meeting on the issue held by the Food and Drug Administration late last year.

Merck shares were up 0.6 percent at $37.16 in afternoon trading on the New York Stock Exchange. Parexel shares rose 0.7 percent to $21 on the Nasdaq. (Editing by Dave Zimmerman and Steve Orlofsky)

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