Merck to Develop Biosimilar with Korean Chemical Manufacturer

Merck & Co. and the biobusiness of Hanwha Chemical, a Korean chemical manufacturer, have formed an exclusive global agreement to develop and a commercialize a biosimilar of Enbrel (etanercept), a drug to treat moderate to severe plaque psoriasis, psoriatic arthritis, and moderate to severe rheumatoid arthritis.

Enbrel is one of the top-selling prescription drugs overall and also is one of the top-selling biologic-based drugs on a global basis. In 2010, the drug ranked seventh in revenues among global prescription drugs with sales of nearly $6.2 billion, according to IMS Health. US sales in 2010 were $3.3 billion.

“Enbrel is widely considered to be one of the most important biosimilar molecules,” said Michael Kamarck, president of Merck BioVentures, in a June 13, 2011, Merck press release. “This candidate represents a valuable addition to our broad biosimilars portfolio, as we advance our strategy to provide patients with improved access to biologic therapies.”

Under the terms of the agreement, Hanwha Chemical’s Bio Business Unit and Merck, through a subsidiary, will develop and commercialize HD203, a biosimilar form of etanercept developed by Hanwha. Merck will conduct clinical development and be responsible for manufacturing. In addition, upon marketing approval, Merck will commercialize HD203 globally, except for in Korea and Turkey, where Hanwha has retained marketing rights. In return, Hanwha receives an upfront payment from Merck and will be eligible for additional payments associated with milestones for technology transfer and regulatory progress as well as tiered royalties on sales. Specific financial terms of the agreement were not disclosed.

HD203 is currently being evaluated in Korea in a randomized double-blind active-controlled parallel group Phase III clinical trial to evaluate the equivalence in efficacy and safety of HD203 and Enbrel in combination with methotrexate in patients with rheumatoid arthritis. Clinical trials have yet to be initiated in the United States.

Hanwha Chemical, based in Seoul, South Korea, is a producer of petrochemicals, plastics, and inorganic chemicals. The company was established in 1965 and has further diversified into other markets, including nanotechnology, renewable energy, and biopharmaceutical development through its biobusiness unit.

Merck BioVentures is focused on biopharmaceutical development, including biosimilars. Merck expects to have five biosimilar candidates in late-stage testing by 2010, according to the company’s 2010 annual report. According to industry estimates offered in the report, an estimated $60 billion in biologics will lose patent protection through 2017.