HONG KONG – Indian pharmaceutical company Lupin Ltd. (BSE:500257, NSE:LUPIN) plans to launch a new company dedicated to biosimilars in Japan with its Japanese partner, Toyama-based pharmaceutical Yoshindo Inc.

The JV will be named YL Biologics (YLB), and it specializes on biosimilars for the Japanese market.

“The new JV is not specific to therapeutic areas but to biosimilars,” Alpesh Dalal, head of mergers and acquisitions and investor relations at Lupin, told BioWorld Today.

YLB will in-license monoclonal antibodies (MAbs) from Lupin and other companies around the world for the Japanese market, which already has a clear regulatory pathway in place for the development and commercialization of biologics and biosimilars.

Lupin and Yoshindo will jointly manage YLB. The new company will conduct clinical development of biosimilars, file for regulatory approvals and obtain marketing authorizations in Japan.

“YLB is a reflection of Lupin’s long-term commitment to the Japanese market and is an important first step forward to establishing Lupin’s global biosimilar portfolio,” said Kamal Sharma, vice chairman of Lupin.

Lupin developed its biosimilar version of Enbrel (etanercept, Amgen Inc.) and nine other biosimilar drug candidates at its Biotechnology Research Group in Pune, a growing tech center not far from Mumbai. In its five years of operation, the research group has developed a total of 10 biosimilars, eight of them are potential blockbusters in the therapeutic areas of oncology, inflammation, antivirals, osteoporosis and rheumatoid arthritis (RA).

Etanercept is used to treat autoimmune diseases such as RA, psoriasis and ankylosing spondylitis. Pharmaceutical giant Takeda Pharmaceutical Co. Ltd., of Osaka, markets the originator drug in the country. Enbrel was the fourth best selling drug in the world in 2013 with global sales of nearly $8 billion, according to IMS Health.

IMS reported that Japan’s biological market is worth about $12 billion and is growing at a rate between 2 percent to 3 percent per year. MAbs have a very bright future. They account for up to $3.5 billion of Japanese biological drugs sales and the number is growing at 5 percent every year.

But not everyone is optimistic about future market opportunities for biosimilars in Japan. Some contend that getting government approval for this category of drug in Japan is much more challenging than in other countries because of very strict requirements on product quality.

“Of course the government would like to reduce health care expenditures in terms of biosimilars, but at the same time it’s so obsessed with quality,” said Hiroshi Tamada, vice president of Japan medical affairs and pharmacovigilance at Bristol-Myers Squibb Co. in Japan. “The likely scenario is that the government will ask pharmaceutical companies to conduct clinical trials of the branded biologic vs. biosimilar as well as in theory, of which the cost is huge.”

“I’m not worried, we already have good business in Japan,” Dalal said. “We supply products to Japan regularly so we understand the standards and quality checks in Japan.”

Lupin will receive milestone payments in addition to commercial supplies of the drug substance. To make best use of the two parties’ sales networks, Lupin and Yoshindo will market the products under their own brand names.

Financial details of the JV were not disclosed.

“YLB is our bridgehead to expand Yoshindo’s activities to the biosimilar market in Japan and highlight on the strategic representation of company,” said Kenzo Shimomura, president of Yoshindo.

Lupin is the seventh largest generics player in Japan and the eighth largest globally in terms of market capitalization.

In its 2013 annual report, Lupin said it expects to file registrations for 15 new products in Japan over the next two years in addition to the three approvals it got in fiscal year 2013 from Japan’s Ministry of Health Labor and Welfare.

The most advanced biosimilar candidate Lupin has in development is a long-acting oncology product that is close to getting marketing approval and is undergoing phase III trials. There are five candidates that have completed pre-clinical studies so far.