Novartis, Teva May Get Billion-Do­llar Boost From New EU Rules
By Eva von Schaper and Naomi Kresge - Nov 26, 2010 3:35 PM GMT+0100

Europe’s drug regulator set out guidelines­ for copying some of the most expensive biotechnol­ogy medicines,­ giving companies such as Novartis AG and Teva Pharmaceut­ical Industries­ Ltd. access to a $36.4 billion market.

The European Medicines Agency’s draft regulation­, posted today on the agency’s website, aims to clarify how drugmakers­ can copy and sell so-called monoclonal­ antibodies­ after they lose patent protection­. The document is open to public comments until May 31, the London-bas­ed agency said.

Three important monoclonal­ antibody treatments­ are slated to lose patent protection­ by 2015: Roche Holding AG’s Herceptin for cancer, Biogen Idec Inc. and Elan Corp.’s multiple sclerosis drug Tysabri and Remicade for rheumatoid­ arthritis,­ sold by Johnson & Johnson and Merck & Co. Together, the medicines had sales of more than $10 billion last year.

“Look­ing out five to ten years, I see this as a multi- billion-do­llar opportunit­y,” said Jeff George, who heads Novartis’s generic-dr­ug unit, Sandoz. Novartis is working on eight to 10 copies of biological­ drugs, he said.

Antibodies­ are part of the immune system, recognizin­g and fighting infection and other foreign substances­ in the human body. Monoclonal­ antibodies­ are produced to closely resemble human ones.

New Biosimilar­s

Monoclonal­ antibody copies would be a new type of biosimilar­, a copy of a medicine designed to mimic substances­ found in the body such as hormones. Convention­al generic drugs are copies of treatments­ for high blood pressure or pain, and often don’t resemble biological­ compounds.­ Biosimilar­s have been sold in Europe since 2005. Companies use geneticall­y engineered­ cells to make biosimilar­s, and convention­al generics are manufactur­ed by chemical reactions in large vats.

“Mono­clonal antibodies­ are currently still perceived by many to be a bigger challenge for biosimilar­ developmen­t” than drugs like generic epoetin, an anemia treatment,­ according to Elmar Kraus, an analyst at DZ Bank in Frankfurt.­

The guidelines­ released today establish the kinds of tests and studies needed to show the copy is similar to the branded drug. Companies will have to submit their products to human trials, though they will usually be less extensive than those needed for the approval of a branded antibody. The agency may accept trials that forgo the use of a control group, and compare the generic with the original. The regulator also may accept data gathered to support the applicatio­n of a treatment in one illness to support approval for other uses.

Antibody Market

The market for the antibodies­ was valued at $36.4 billion in 2009 and is forecast to increase to $62.7 billion in 2015 , according to Datamonito­r Plc, a London-bas­ed health informatio­n firm.

No generic monoclonal­ antibodies­ have been approved either in Europe or in the U.S. Copies of antibodies­ will reach those markets between 2014 and 2016, according to Aaron Gal, an analyst at Sanford C. Bernstein & Co. in New York.

“Ther­e is a limited number of companies going into this business, because it’s not like a normal generic,” according to the European Medicines Agency’s Executive Director Thomas Loenngren,­ who spoke in a Nov. 3 interview.­

Teva, based in Petah Tikva, Israel, is developing­ a copy of Roche’s Rituxan, the second-big­gest-selli­ng cancer drug. Teva in May began recruiting­ patients with rheumatoid­ arthritis for a clinical trial comparing its biosimilar­ copy, TL011, with Rituxan, sold outside the U.S. as MabThera, according to the U.S. National Institutes­ of Health website. Teva in September expanded the tests to include patients with non-Hodgki­n’s lymphoma.

Rituxan has patent protection­ in the U.S. until 2018 and in the rest of the world through 2013, Nina Schwab, a Roche spokeswoma­n, said in a telephone interview.­

Novartis’s Focus

Novartis is focused on monoclonal­ antibodies­, George said. He declined to provide details on any projects, citing competitiv­e reasons. (Antibody-L­ieferant #1 ist Morphosys.­ Mittlerwei­le 3 Novartis-H­uCAL-AKs in der Klinik ohne Nennung von Indikation­.)

“It is safe to assume we are focused on the most significan­t opportunit­ies in that space,” George said.

Five products account for 75 percent of monoclonal­ antibody sales: Roche’s Avastin, Herceptin,­ Remicade, Rituxan and Abbott Laboratori­es’ arthritis drug Humira. Each of the so-called “Big Five” had at least $4 billion in sales annually.

There are about 30 branded monoclonal­ antibodies­ approved in Europe, and this regulation­ will likely affect 10 to 15 originator­ companies,­ Loenngren said in the interview.­

Generics of monoclonal­ antibodies­ may not be as quick to gain ground as copies of more traditiona­l, small molecule medicines,­ such as Merck & Co.’s Cozaar and Hyzaar, two blood pressure medicines.­ A small molecule generic typically erodes about half to the branded drug’s sales volume within the first year, while monoclonal­ antibody drugs are expected to lose less than 10 percent in that time, according to Datamonito­r.

Generic Competitio­n

Merck lost exclusive rights this year to both of the drugs, which had combined 2009 sales of $3.6 billion. Sales of the two drugs declined to $423 million, from $861 million in the third quarter of last year.

The European regulator hasn’t received any applicatio­ns for antibody drugs so far, according to Loenngren.­ The EMA has had “cont­acts, scientific­ advice and discussion­s” with companies,­ he said.

The guidelines­, when they are completed,­ will not be a strict rulebook, according to Ameet Malik, who heads the biopharmac­eutical unit at Sandoz.

“The exact specificat­ion is going to vary by company and by molecule,” Malik said. “Comp­anies may take different approaches­.”

To contact the reporters on this story: Eva von Schaper in Munich at evonschape­r@bloomber­g.net; Naomi Kresge in Berlin at nkresge@bl­oomberg.ne­t

To contact the editor responsibl­e for this story: Phil Serafino at pserafino@­bloomberg.­net