Richter and Stada announced today that they are combining their efforts in the field of mAbs, with a view to developing two key products, rituximab and trastuzumab, in a cost-effective manner. Under the terms of their agreement, Stada has paid Richter an up-front fee to get non-exclusive EU and CIS marketing rights to rituximab (the biosimilar version of Roche‘s Rituxan), which is expected to reach the market in 2017. In addition, Stada will make milestone payments as the product goes through key development stages, with the total cost being ‘low double-digit millions of euros’. Richter also intends to sell rituximab itself and reserves the right to sign up one additional licensee other than Stada. The deal currently excludes Russia, where it is not possible for two companies to sell a product made in one factory under different names: this market will be added if the law changes over the next few years.
As well as taking on rituximab, Stada is also selling to Richter its version of trastuzumab (Herceptin, also from Roche), which is currently at an early stage of development. Stada originally set up its own R&D centre for monoclonals but stopped work at the end of last year when it decided that in-licensing made more commercial sense than purchase. Richter is paying Stada a few million euros for trastuzumab and when the product goes into clinical trials, which is expected to be in about two years, Stada will have the option to in-license it for sale on the same commercial terms as for rituximab.
As it was already well known that Richter had a biosimilar development programme, today’s news does not exactly add to the list of expected competitors in the market. However, it provides some clarity about the timelines to launch and suggests that Richter will now actually have the funds to take products through the approval process. The fact that Richter plus a possible two licensees will be selling the same version of rituximab also adds to our existing conviction that this is going to be quite a crowded market, given that Teva and Sandoz both have versions of the drug in clinical trials and Celltrion of Korea is also believed to be developing it (with Hospira as a marketing partner for western Europe and EGIS for CEE), as is Biocon (for Mylan). We assume that Teva and Sandoz will be aiming for a 2014 launch, so Richter will be relatively late to the party, but we expect it to take a very serious approach to its development work, with substantial clinical trials in Europe, so it is likely to have a reasonably body of clinical data to back up its product. According to the Stada/Richter press release, rituximab sales in Europe are currently around €1.2bn pa at ex-factory prices, while trastuzumab turns over approximately €1.4bn, so the potential market is substantial. However, once five or six competitors plus probable price cuts from the originator are factored in, the revenues generated by each biosimilar start to look less attractive, suggesting that those companies that get to the market first will be much more likely to make a financial return on their investment, with latecomers being left to pick up the crumbs.
Posted on 30th August 2011