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TVs to Biologics: Samsung Dives into Biosimilars with $300M Biogen Idec JV

bwt120711 Samsung Image

By Catherine Shaffer
BioWorld Today Contributing Writer

Samsung, a noted manufacturer of televisions and other electronic devices, entered the world of biotechnology with its new division, Samsung Biologics, in May. Wasting no time, that company has now launched a $300 million joint venture with Biogen Idec Inc., of Weston, Mass., to develop and manufacture biosimilars.

"Because many of today's important medicines are biologics, we think that biosimilars are going to play a big role in ensuring patients have access to those therapies," Naomi Aoki, Biogen Idec director of public affairs, told BioWorld Today.

Samsung is contributing the lion's share of the investment, $255 million, for an 85 percent stake in the as-yet unnamed venture. Biogen Idec is kicking in the remaining $45 million for its 15 percent share. The new entity will be based in Korea, contracting with both parent companies for technical development and manufacturing services.

Samsung Biologics is a joint venture with Quintiles Transnational Corp. Samsung broke ground on its $303 million biopharmaceutical production facility in May and expects to complete it and begin production of drugs in the first half of 2013.

In 2010, the electronics giant identified biopharmaceuticals as one of five new strategic businesses it planned to launch.

The other four included three businesses focusing on environmental technologies and a medical device business.

Previously, it had dabbled in the health care sector, with a hospital and medical research chain. The new venture with Biogen Idec represents a significant commitment to the biotechnology field with the potential to make Samsung a major player.

In addition to manufacturing biosimilars, plans for Samsung Biologics include contract manufacturing of biopharmaceuticals and development of an internal pipeline of drugs.

Samsung plans to invest a total of $1 .86 billion in biopharmaceuticals, producing an annual income of $1.6 billion. (See BioWorld Today, March 1, 2011.)

Biogen Idec will bring to the partnership its expertise in protein engineering and biologics manufacturing. The partnership will make use of excess manufacturing capacity that Biogen Idec has at a facility in Denmark.

Aoki said that the deal makes use of Biogen Idec's experience in developing biologics, and makes good use of the excess manufacturing capacity, "in a way that doesn't distract us from our core business and core mission in our therapeutic focus areas."

Biogen Idec's focus is in neurodegenerative disease, hemophilia and autoimmune disorders. It markets Tysabri (natalizumab) and Avonex (Interferon beta-1a) for multiple sclerosis, and Rituxan (rituximab) for non-Hodgkin lymphoma.

Its development pipeline includes products for cancer, multiple sclerosis, hemophilia A and B and other indications.

The new joint venture with Samsung will not be producing biosimilars that compete with Biogen Idec products.

Interest in biosimilars has been mixed, because of concerns about market uptake. Biosimilars must compete head to head with the innovator biologic, but unlike generics, they are not interchangeable with that product. That means there's no pharmacy-window switching. Instead, the biosimilar will have to build market the old-fashioned way.

Another disadvantage biosimilars have compared to generic drugs is that they may require clinical trials and marketing, and won't be able to offer steep price discounts that have driven the generic market.

For example, EPO biosimilars entered the European market at around 80 percent of the cost of the innovator biologic. The innovator eventually price-matched the biosimilar, which now holds 18 percent of the EPO market.

A proposed change by the Obama administration in the exclusivity period for biologics in 2012 from 12 years to seven could be a game-changer, leveling the playing field for biosimilar manufacturers.

Samsung and Biogen Idec have not revealed what biosimilars they will pursue, but a number of biologics losing patent protection in the coming years present likely candidates.

Remicade, (inflicimab, Johnson & Johnson), Enbrel (etanercept, Amgen Inc.), Cerezyme (imiglucerase for injection, Genzyme Corp.), Humalog (lispro, Eli Lilly and Co.), NovoLog (aspart, Novo Nordisk A/S), Rebif (subcutaneous interferon beta-1a, Merck Serono), Aranesp (darbepoetin alfa, Amgen), Epogen (epoetin alfa, Amgen ), Erbitux (cetuxumab, Eli Lilly), Procrit (epoetin alfa, Johnson & Johnson), Avastin (bevacizumab, Genentech Inc./Roche AG), Lantus (insulin glargine [rDNA origin] injection, Sanofi), Neulasta (pegfilgrastim, Amgen Inc.), Sandostatin LAR (octreotide, Novartis) and Synagis (palivizumab, MedImmune LLC) are all biologics scheduled to lose patent protection over the next few years. Many of those would make attractive targets for biosimilar development, particularly for Biogen Idec, which also loses protection for all three of its marketed biologics – Rituxan, Avonex and Tysabri – over the same time period.

Rituxan (rituximab), which is partnered with Roche AG, in 2009 had worldwide sales of about $5.6 billion in indications including non-Hodgkin's lymphoma and chronic lymphocytic lymphoma.

It's a target for biosimilar initiatives by Spectrum Pharmaceuticals Inc., of Irvine, Calif., Teva Pharmaceutical Industries Ltd., of Jerusalem, Dr. Reddy's Laboratories Ltd., of Hyderabad, India, and Novartis AG's Sandoz.

Rituxan's patent protection expires in the U.S. in 2018 and elsewhere in the world in 2013. (See BioWorld Today, Jan. 6, 2011.)