The Wall Street Journal-20080122-Teva Agrees to Buy CoGenesys- Gaining Foothold in Biologics
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Teva Agrees to Buy CoGenesys, Gaining Foothold in Biologics
Generic-drug giant Teva Pharmaceutical Industries Ltd. has agreed to acquire biopharmaceutical company CoGenesys Inc. for $400 million in cash, according to people familiar with the matter.
The deal, which is expected to close by the end of June, is likely to stoke the debate about the role generic-drug makers should play in the emerging market for biological therapies.
CoGenesys Inc., a closely held spinoff of Human Genome Sciences Inc., would give Jerusalem-based Teva a foothold in the market for biologic therapies.
Unlike "small-molecule" drugs, which typically are made through well-proven steps in the form of pills, biologics are proteins manufactured in living cells.
CoGenesys's pipeline of biologic drugs includes treatments for cardiovascular disease, cancer and autoimmune disorders.
This type of drug has become a source of deep tension between biotech companies and generic-drug makers such as Teva.
The companies that develop the drugs argue that biologics are far harder to manufacture, and that it is very difficult to show whether copycat versions are as effective.
But that hasn't stopped generic-drug companies from devoting significant resources to the development of generic biologics, which industry experts expect to enter the U.S. market in about five years.
To get there, the generic-drug makers will have to convince regulators and Congress that they are capable of manufacturing the treatments with the same standards of quality and reliability as mainstream biotech companies.
Currently, there is no legislative pathway for generic biologics to gain approval, though efforts are under way.
Last year, Senate legislation aimed at creating such a system faltered.
The market for such therapies is extremely lucrative.
In 2006, global spending on biotech drugs totaled more than $60 billion, according to an estimate from IMS Health, double the 2002 figure. Three top-selling biologic drugs -- Amgen Inc.'s Aranesp and Epogen, along with Johnson & Johnson's Procrit -- brought in $7.3 billion of revenue last year.
Teva had been exploring for biotech companies that could bolster its generic biologics capabilities for about a year, according to a person familiar with the matter.
