Wednesday, January 12, 2011

Merck BioVentures Deepens Dive Into BioSimilars -- With Parexel

Here's Reuters reporting on it, just now:

. . . .Merck struck an alliance with contract researcher Parexel International Corporation 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. . . .

We will keep you posted, but with the margins that companies like Amgen enjoy (on biologics like white cell "enhancers" Neupogen® and Neulasta®), it is a wonder it has taken major branded pharma this long to cross the picket-lines, and join the "generic" strikers -- there is just too much money to be made to forego these opportunities any longer. Doubly true, with branded pharma facing its various and precipitous patent cliffs.


Anonymous said...

hey Condor,
Long time no talk to.
Hope you are having a nice 2011.
Per this post, I think biologics hold big promise, but unless we can streamline the costs, they may prove to be prohibitively expense for wide use. Also, the complexity involved in replicating the original biologic makes biosimilars much more challenging to produce than small molecule generics.
I am still a believer in intelligently setting up systems to identify useful small molecules... which can be done more robustly and at a fraction of the cost (which is why the 'patent cliff' is so deep for big pharma).
Best to you,

Anonymous said...

Thank you GhettoSS - this is my sentiment exactly, which is why I would like to see additional incentives for companies to pursue small molecule programs. (like the data exclusivity extension) Small molecule programs are being dumped by all big pharma and being replaced by biologics. This is a very bad move for society because biologics will never compete on a cost-of-production level with small molecules. Even once biogenerics have a pathway for FDA approval, the barriers to entry will be enormous and it is likely that costs will only be marginally lower than branded generics. You certainly won't see the 90% cost reduction associated with generic small molecules.

People think that biogenerics are the key to keeping future drug prices down. This is simply erroneous in my opinion. The way to keep future drug prices down is to encourage small-molecule drug development. But the current system is set up to heavily favor biologics.

Anonymous said...

I think I disagree with you Condor. Most big pharma will continue to do small molecule screening as they've got huge chemical libraries that lend themselves to high through-put screening. Obviously the money in biologics has been huge but the other issues driving pharma away from small molecules also include; 1) most therapeutic targets (for small chemical compounds) are g-protein coupled receptors and they have been 'well-played' out and often only lead to me too drugs (which aren't as well received nowadays) and 2) since these receptors/targets have been cloned, intellectual property rights often 'obstructs' a company from chasing a potential target (albeit not completely).


Anonymous said...

Just to clarify, that response was not from Condor. (Sorry, I forgot to sign my name)

I'm not following your logic. Are you saying that pharma will stick with small molecules because of their large compound libraries? I'm not sure I agree with that... Only about 30% of the small molecule programs that I have been involved with even have their origins in library screening. Many programs (especially these days) are based on "hits" found in literature, competitors, or natural products.

I also don't agree with your second point. I have *never* seen a program fail to go forward due to IP issues with the biological target of the drug.

By the way, I'm not arguing that small molecules are dead. Pharma will always continue to have significant efforts in small molecules. But the efforts are shifting DRAMITALLY to biologics in recent years. Fewer than 50% of the projects at my company are small molecule programs. Is this really the direction we want drugs to go? My opinion is no.