Merck KGaA is making a move into biosimilars by linking up with Dr Reddy's Laboratories to co-develop generic cancer drugs.

The German firm's Merck Serono unit and the Indian drugmaker are planning to develop a portfolio of biosimilar compounds in oncology, primarily focused on monoclonal antibodies. Under the terms of the pact, the financial details for which have not been disclosed, Dr Reddy's will take responsibility up to Phase I when Merck will take over manufacturing of the compounds and will lead Phase III development.  

The agreement, which is based on "full R&D cost-sharing", will then see Merck undertake commercialisation globally, outside the USA (where the firms will co-promote) and with the exception of select emerging markets which will be co-exclusive or where Dr Reddy's maintains rights. The companies have yet to reveal which monoclonal antibodies they intend to make biosimilars of.

Earlier this year, Merck set up a dedicated biosimilars unit that will be based in Vaud, Switzerland, where its main biologics manufacturing facilities are located. The expertise in biopharmaceuticals the company has "gives us a clear advantage in the biosimilars field", said Merck Serono chief executive Stefan Oschmann who noted that Dr Reddy's brings to the table "their first-in-market experience in biosimilars, as well as their expertise in generics and emerging markets".

He added that "sharing know-how, risks and rewards is the right approach to enter the emergent biosimilars market and will be a win-win for both parties". Dr Reddy's chief executive GV Prasad stated that with recent regulatory guidance on biosimilars, "it is clear that any significant player in the field will need strong biologics development, manufacturing and commercialization capabilities". The companies' "joint expertise in these fields makes for a powerful global partnership".

Merck and Dr Reddy's are the latest drugmakers to team up in this area and recent biosimilar pacts include Biogen Idec's joint venture with South Korean electronics giant Samsung and Amgen's link-up with Watson Pharmaceuticals.