Regulators pave way for biosimilar drug breakthrough

European regulators have cleared the way for the first serious threat to the makers of multibillion-dollar biotechnology drugs to treat diseases such as cancer and rheumatoid arthritis.

The European Medicines Agency (EMA) said on Friday that its experts had backed approval of two copycat versions of Johnson & Johnson and Merck & Co's blockbuster rheumatoid arthritis drug Remicade - the first time a green light has been given for such antibody-based medicines.

Until now, complex biotechnology medicines such as Remicade - given by injection or infusion - have been largely immune from generic competition, unlike conventional pills.

But the EMA's announcement on so-called biosimilars Remsima and Inflectra - made by South Korea's Celltrion and U.S. company Hospira respectively - signals the changing landscape as regulators set out a clearer path for the evidence needed to secure approval of such products.

Celltrion executive Kim Hyoung-ki told reporters on Friday that the company is planning to seek approval in Japan later this year and that an application for U.S. approval is possible in 2015.

PRICE POINT

He said that the company expects to sell Remsima at a 30 percent discount to Remicade, aiming to win a significant chunk of the $6.1 billion sales that the drug racked up for Johnson & Johnson in 2012.

Celltrion also aims to boost sales further with approval in emerging markets and recession-hit countries such as Greece.

Citi analyst Andrew Baum said that European regulators' backing of biosimilar versions of Remicade is also likely increase the perceived risk for Roche's top-selling cancer drugs Rituxan and Herceptin. Roche is trying to protect its existing products by bringing out improved, patented versions of its medicines.

Both Remsima and Inflectra have been recommended for a range of auto-immune diseases, including rheumatoid arthritis, Crohn's disease and psoriasis among others.

Europe has already approved some simpler biosimilars, including copycat versions of human growth hormone and the anemia treatment EPO, but it has yet to approve an antibody drug such as Remicade, which is known generically as infliximab.

Unlike traditional chemical drugs, biotech medicines consist of proteins derived from living organisms that cannot be replicated exactly. Biosimilars, therefore, are more difficult to develop and need more tests to prove they work properly.

Recommendations for marketing approval by the agency's Committee for Medicinal Products for Human Use are normally endorsed by the European Commission within a couple of months.