Merck launches biogenerics business

By Nick Taylor

- Last updated on GMT

Related tags Merck & co.

Merck & Co is moving into the follow-on biologics market as it searches for new revenue streams to reduce the damage caused by generic competition.

The company is forming a new business unit, Merck BioVentures, which anticipates having five compounds in late stage development by 2012.

Merck believes it is well equipped to compete in the follow-on biologics market having acquired the humanised GlycoFi yeast platform in 2006, which can produce proteins in yeast.

Peter Kim, president of Merck Research Laboratories, said: "Merck BioVentures is uniquely positioned for success as a result of the humanised GlycoFi yeast platform which has the potential to provide us with a competitive advantage at a time when the patents on many marketed biologic therapeutics are set to expire​."

Merck has noted that the period through 2017 will see extensive patent expirations of leading biologics and is keen to profit from the opportunities this presents.

The GlycoFi platform allows for the creation of proteins with pre-specified and defined human carbohydrate side chains, which is said to offer improved speed, cost and quality over conventional methods. It can also be used to develop novel biologics.

Equipped for hard times?

In his speech Merck’s CEO Richard Clark commented that 2008 was the year that the whole pharmaceutical industry went from anticipating change, to finding itself in the middle of a shifting environment.

Merck has been badly hit in this challenging operating environment, with its share price falling from $60.77 a year ago to a low of $22.82 in November. Despite this Clark remained resolute that Merck is equipped to succeed in the current climate.

He said: “I remain unwavering in my confidence in Merck's ability to achieve our goal. We have the right strategy, the right business model, the right product portfolio, the right pipeline – and the right people – to succeed​. I am more determined than ever that we will be one of the winners in the pharmaceutical industry of the future​.”

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