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Only the biggest developers can play the biosimilar game

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Over the next five years, the market for biosimilars will swell to $10 billion, but only a handful of players with deep pockets and world-class R&D facilities will be able to play. And that means that most small- and medium-size drug developers will never have a chance of leaping into the new market for follow-on biologics.

"You are not going to see small shops being able to enter this market... There are only five to six players that are credibly going to play a role," Michael Sjoestroem, a healthcare asset specialist, tells Reuters. And fund manager Stijn Vanacker puts it like this: "It's really a market for bigger companies [that] can make the investment to explore."

It's all about the numbers. The niche for most small biotechs is taking a preclinical or very early stage candidate to proof of concept, at which point they can make a deal. With biosimilars, the developer will start with proof of concept data and then ramp up the most expensive stage of clinical development, with the added charge of running a likely comparison study to the marketed therapeutic.

That won't be cheap. Reuters' experts estimate that it will take eight years to run a biosimilar program with development costs sliding from $100 million to $150 million. With that much time and money at stake, most biotechs will never get into the game.

- here's the report from Reuters

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