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DEERFIELD, Ill.—Nature might abhor a vacuum, but in thepharmaceutical industry, they are eagerly awaited. And as high-earning drugslike Lipitor lose or near the end of their patent protection, talk is growingthat follow-on biologics, or biosimilars, are going to be the frontrunners inthe race to fill the vacuum left by blockbuster drugs. Global healthcarecompany Baxter International Inc. and Cambridge, Mass.-based MomentaPharmaceuticals Inc. are among those exploring the potential of biosimilars, asthe two companies recently announced a global collaboration to develop andcommercialize follow-on biologics.
 
 
Per the terms of the agreement, Baxter will pay Momenta $33million up front for up to six follow-on biologic compounds in undisclosedtherapeutic areas. Momenta will be eligible to receive additional payments of morethan $470 million if certain technical, development and regulatory milestonesare met with respect to all six products. Momenta is also eligible forroyalties on net sales of licensed products worldwide.
 
"Momenta and Baxter share a common goal in thiscollaboration—to create interchangeable biologic products by taking advantageof Momenta's innovative physicochemical and biologic characterizationcapabilities, coupled with a quality-by-design approach to processdevelopment," Craig Wheeler, president and CEO of Momenta, said in a pressrelease regarding the agreement. "We are thrilled to have Baxter as a partner.Baxter's global footprint and extensive development, manufacturing andcommercial expertise are exactly what we need to succeed in building a leadingfollow-on biologics business."
 
 
Momenta will be responsible for leading the scientificefforts of the collaboration, says Wheeler. His company will handle"characterization of cell line development, early process development, [and]bringing it right up till essentially clinical GMP manufacturing," after whichBaxter assume responsibility "for all of the GMP clinical manufacturing andbeyond, the commercial aspects as well as clinical trial work."
 
Wheeler says Baxter emerged as an excellent partner for thecollaboration given its strategic alignment with Momenta, its capabilities inbiologic manufacturing and its global reach.
 
 
The appeal of biosimilars is that they can have shortermarket entry times if they are proven to be similar to previously approvedproducts. The Patient Protection and Affordable Care Act, which was signed inMarch 2010, "amends the Public Health Service Act to create an abbreviatedlicensure pathway for biological products that are demonstrated to be'biosimilar' to or 'interchangeable' with an FDA-licensed biological product,"according to the U.S. Food and Drug Administration's website. That pathway ispart of the Biologics Price Competition and Innovation Act, passed in 2009 inhopes of improving market access for biosimilars.
 
Similar collaborations have been seen among other companiesin the field. Biogen Idec and Samsung announced an agreement in December 2011to invest $300 million in establishing a joint venture to develop, manufactureand market biosimilars. Amgen and Watson Pharmaceuticals also formed anagreement centered on biosimilars the same month, with Watson contributing upto $400 million in co-development costs as the companies seek to develop andcommercialize oncology antibody biosimilar medicines.
 
 
Wheeler says Momenta considers the follow-on biologics fieldto be "one of the few areas of real growth in the market."
 
 
"There's well over $100 billion of products coming offpatent in the biologics space, and so there's going to be a lot of potentialopportunity to bring new products into that space," he says, adding thatbiosimilars represent a global market due to the current high prices ofbiologics, which could allow for decent profit margins for competitors withlower prices, and due to a lack of market penetration in developing countries.
 
According to research released in 2011 from independentanalyst Datamonitor, the global biosimilars market is expected to grow from$243 million in 2010 to $3.7 billion by the year 2015, due in no small part tothe fact that more than 30 biologics with sales of $51 billion will lose patentprotection between 2011 and 2015.
 
 
"Baxter is an established leader in biologic treatments fora variety of diseases. As biologics have become an increasingly important partof patient care, the collaboration with Momenta allows us to tap bothcompanies' expertise to expand access to these important therapies," LudwigHantson, president of Baxter's BioScience business, said in a press release.
 
 
The companies expect the transaction to close in the firstquarter of 2012, subject to customary closing conditions, including the waitingperiod under the Hart-Scott-Rodino Antitrust Improvements Act.

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