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Merck strikes $720M deal with Hanwha for generic Enbrel

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Merck has its eye on gaining a piece of the multi-billion dollar market for etanercept (Enbrel). The pharma giant has landed a deal to develop and commercialize a knockoff version of Amgen's mega-blockbuster arthritis drug that was developed by South Korea-based Hanwha Chemical.

Merck ($MRK) is shelling out $720 million to license Hanwha's version of etanercept, HD203, in a deal that lasts through 2024, Reuters reported. The deal builds on Merck's plans announced in 2008 to establish Merck BioVentures and invest $1.5 billion through 2015 to bring to market so-called biosimilar drugs that are intended to be copies of biologics. Hanwha's Enbrel knockoff promises to be a big piece of Merck's biosimilars business, given that the drug loses U.S. patent protection in 2012 and has been one of the best-selling biologics of all time.

In its deal with Hanwha, Merck has agreed to take on development and manufacturing of HD203 as well as marketing in all countries except Korea and Turkey upon regulatory approvals. Hanwha has begun a Phase III trial in Korea that aims to show safety and equivalence of its copycat version of Enbrel with Amgen's ($AMGN) version in patients on a treatment regimen for rheumatoid arthritis. Yet clinical development hasn't been started in the United States, according to the companies.

"Hanwha has established outstanding biopharmaceutical development capabilities," Michael Kamarck, president of Merck BioVentures, said in a statement. "Enbrel is widely considered to be one of the most important biosimilar molecules. 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."

Biosimilars are expected to be cheaper than the originals, and consumer advocates have been clamoring for regulators to streamline the process of approving the copycat drugs. Given that Merck hasn't laid out its specific development plans for HD203, it's unclear whether the Big Pharma will be able to hit the ground running with sales efforts once the drug comes off patent next year. However, its deal with Hanwha at least gives it a shot at offering a version of Enbrel in what promises to be a hot market for knockoffs of the drug.

- here's Merck's release
- see the Reuters report

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