South
Korea Celltrion to expand R&D investment for original
drugs
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[November 02, 2016]
By Joyce Lee
INCHEON, South Korea (Reuters) - South
Korea's drugmaker Celltrion Inc, whose copy of blockbuster rheumatoid
arthritis drug Remicade is about to hit the U.S. market, aims to expand
R&D spending five-fold to one trillion won ($876.24 million) in the next
two or three years to help bolster a pipeline of original drugs, its
co-CEO said.
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Celltrion, which is backed by Singapore state investor Temasek and
is valued at nearly $11 billion, will spend about 200 billion won on
R&D for this year.
"We are trying hard to go to 1 trillion won in R&D spending in 2 to
3 years," Kim Hyoung-ki, Celltrion's chief executive officer told
Reuters in an interview late on Friday.
Celltrion's Remicade copy, to be sold by Pfizer Inc in the United
States starting late November, is expected to penetrate the U.S.
market at a faster rate than it did in Europe, Kim said.
Johnson & Johnson, the U.S. seller of Remicade has appealed against
a federal court decision in August that invalidated a U.S. Remicade
patent, but Kim was confident that the ruling would be allowed to
stand.
"Our patent team, and Pfizer's patent team, have all determined that
the decision will not be overturned," he said.
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Celltrion has dozens of in-house personnel dedicated to patent
strategy - key for biosimilars, which can only enter a market after
the original patent expires, Kim said.
"Biosimilars are a timing game," Kim said.
Celltrion, whose "biosimilar" -- a near-copy of a biotech drug
priced at a discount -- was the first Remicade copy approved in
Europe and the United States, predicts that its revenue will
snowball to 10 trillion won in 10 years as it expects European
approval for copies of two other blockbuster drugs, Roche's MabThera
and Herceptin, by end-2016 and 2017 respectively.
The company generated revenue of 603 billion won last year.
Since launching the Remicade copy in major European countries in
early 2015, Celltrion estimated that its share of the European
market, based on patient numbers, has climbed above 40 percent.
Remicade is Johnson & Johnson's biggest selling drug, with U.S.
sales of about $5 billion a year.
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Pfizer said it would begin selling the Remicade copy, called
Inflectra, at a 15 percent discount to current wholesale prices.
In Europe, Celltrion's Remicade copy sells at an average of about
30-40 percent discount to the original, Kim said.
Novartis Chief Executive Joe Jimenez earlier this year predicted
that biosimilar discounts could result in discounts of up to 75
percent, but Kim was more conservative over the scope for discounts,
especially in the near-term.
"Biosimilar developers' costs are similar. They have to do the same
scale of clinical trials and so on," Kim said. "Until the time the
first, second and third biosimilar versions of one drug are out, I
don't see prices being seriously disrupted."
As of Monday's close, Celltrion shares were up 25.7 percent since
end-2015. And Kim said the planned listing of a marketing affiliate,
Celltrion Healthcare Co Ltd, is on track for next year.
(Reporting by Joyce Lee; Editing by Simon Cameron-Moore)
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