By Karen Pihl-Carey

Staff Writer

When several money-making biotech patents expire over the next decade, Bio-Technology General Corp. and Teva Pharmaceutical Industries Ltd. expect to be waiting with their own generic products to compete for a share of the market.

The companies said Friday they entered into a $20 million strategic alliance in which BTG, of Iselin, N.J., will develop and manufacture generic recombinant therapeutic products, while Teva, of Jerusalem, will market them worldwide with exclusive rights.

"If you look at the world of biotech, there are half a dozen to a dozen products that have been super-successful," BTG CEO Sim Fass told BioWorld Today. "All of those products have their patents expire over the next decade. That obviously affords a real significant opportunity to these generic companies. We will develop the generic version to several of these products."

Fass would not disclose specific products for competitive reasons. Among the top-selling drugs whose patents will expire within the next 10 years are erythropoietin (EPO), an anti-anemia drug, and tissue plasminogen activator (tPA), a thrombolytic used to treat heart attacks. Amgen Inc., of Thousand Oaks, Calif., and Ortho Pharmaceutical Corp., a division of New Brunswick, N.J.-based Johnson & Johnson, market EPO. South San Francisco-based Genentech Inc. sells tPA.

The agreement between BTG and Teva is open-ended and not limited to a certain number of years. The $20 million consists of a $10 million up-front payment by Teva to BTG, which was paid in the third quarter, as well as $10 million more in milestones. BTG also will receive "a handsome double-digit royalty" on Teva's sales, Fass said.

The patents BTG is concerned with expire in Europe over the next few years and later in the U.S.

"Within a decade they will all expire," Fass said. "So the target is to have it ready before or at patent expiration. So the moment the patent expires, Teva will be able to compete and capture market share."

With the milestone and royalty payments, BTG will continue to develop its significant pipeline of biotech and non-biotech drugs. They include BioHy, a high-molecular-weight sodium hyaluronate product for treating arthritis pain in the knee; OxSODrol, a genetically engineered superoxide dismutase product that showed positive Phase II results by reducing asthma and neurodevelopment deficits in babies; a recombinant human insulin technology partnered with Diosynth bv, of Oss, the Netherlands; and peptide-based cancer vaccines that are being developed with The Weizmann Institute of Science in Rehovot, Israel.

"Our own challenge, our own mission, is to develop proprietary drugs," Fass said. "But the know-how [for generics] is the same know-how. Over the next several years, we decided we could put someone else in the position to generate significant revenues that could help us accelerate the development of the proprietary drugs."

BTG's stock (NASDAQ:BTGC) closed Friday at $9.625, up 3.12 cents. Teva's stock (NASDAQ:TEVA) closed at $50.125, down 18.75 cents.