May 10, 2011 / 5:53 PM / 8 years ago

Biogen in generic biotech tie-up talks

NEW YORK (Reuters) - Biogen Idec Inc (BIIB.O) is discussing with several companies the possibility of forming a partnership to develop generic versions of biotech drugs.

George Scangos, CEO of Biogen Inc. speaks during the Reuters Health Summit in New York, May 10, 2011. REUTERS/Mike Segar

Speaking at the Reuters Health Summit on Tuesday, Chief Executive George Scangos said Biogen, which makes the multiple sclerosis drugs Avonex and Tysabri, is too small to develop a generic biotech business by itself. But he is interested in joining forces with a partner who could sell and market the drugs worldwide.

Unlike traditional drugs, which are small molecules delivered in pill form, biotech drugs are large molecules, made from living cells, that typically need to be injected or infused. They are more complicated to replicate.

U.S. regulators are expected to release guidance by the end of the year on what companies need to do to win approval for generic copies of biotech drugs. Generic versions of pills are easy to replicate and eventually sell for one-tenth the price of the branded product.

Generic biotech drugs, also known as biosimilars, are expected to sell for a price closer to the original since they are more complex to make and may require clinical trials.

“I’ve been looking for a way for us to participate in biosimilars without diverting our attention,” Scangos said. He expects a biosimilars business could generate north of $1 billion in annual sales.

Scangos said there is a good deal of interest among big pharmaceutical companies and by some biotech companies in forming a partnership. He said Biogen’s goal is to leverage the company’s manufacturing capability without getting involved in sales and marketing.


Scangos said Biogen would be responsible for manufacturing the drugs since it has facilities in the United States and Europe. The partner would handle clinical trials, commercialization, sales and marketing.

“The manufacturing facilities have costs to run them, so the more products you run through them, the more efficient they are,” he said. “To set ourselves up commercially could be a big distraction. I’d like a partner to take over that.”

The company expects its current round of discussions to be completed by the end of this year.

Since Scangos took over the top job last July, Biogen has cut 17 research and development programs and reallocated resources to those programs it considers most promising.

He wants to ensure that the company’s entry into biosimilars does not dilute its focus on existing products and its portfolio of experimental drugs.

“I’ve spent a lot of time focusing the company and I don’t want us to lose focus now,” he said.

A number of generic and branded drugmakers have made biosimilars a priority for future growth, including Teva Pharmaceutical Industries Ltd TEVA.O, Novartis AG NOVN.VX, Hospira HSP.N and Merck & Co (MRK.N).

Scangos said Biogen has already started developing some biosimilars, though he declined to say in which category. Industry observers say one of the first groups of biologic facing generic competition will be rheumatoid arthritis drugs such as Amgen Inc’s (AMGN.O) Enbrel.

The company’s primary focus, however, will be to develop and launch the products it has in late stage development, including new drugs for hemophilia and multiple sclerosis.

Developing biosimilars takes second place.

“It’s not make-or-break for us,” he said. “Our future is in our proprietary products.”

Reporting by Toni Clarke, editing by Matthew Lewis

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