Lilly eyes generic biotech drugs

January 5, 2009
Generic drugmakers have been the nemesis of companies like Eli Lilly and Co. They have fought in court to break Lilly's patents early and then siphoned away sales by selling cheaper medicines.

But now Lilly and its peers want to get in the generic game themselves.

Lilly and two other companies want to make generic copies of lucrative biotech drugs, the three companies have said in the past month. Biotech drugs are made from proteins produced by cultures of living cells and are more difficult to copy than traditional chemical medicines.

New Jersey-based Merck & Co. Inc. and U.K.-based AstraZeneca plc said they are examining the creation of new units that would make generic equivalents of existing biotech drugs. Lilly CEO John Lechleiter said Dec. 11 that Lilly has similar dreams.

"We're very much considering it. ... It's something we're looking at," he told a meeting of Wall Street analysts.

Generic versions of biotech drugs are not allowed in the United States, but they are in Europe.

One company that already has made some generic biotech drugs is Switzerland-based Novartis AG. For example, it sells in Europe a generic version of the anemia drug Epogen, which produced blockbuster sales for California-based biotech firm Amgen Inc.

"This is recognition that biogenerics are a potential new revenue stream" for big pharmaceutical companies, wrote Les Funtleyder, a health care stock analyst at Miller Tabak & Co., in a note to investors. But, he added, "They must prove they can produce and market such products."
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