Merck's Surprising Announcement: "We Will Develop Follow-On Biologics"
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At its annual business briefing, Merck’s CEO, Richard Clark, announced that the company is creating a new division called BioVentures that will develop and sell follow on biologics. Clark said that the reason for this surprising decision was based on “the arrival of the Obama administration and renewed enthusiasm on Capitol Hill for legislation that could create an easier path for generic biotech medicines.”
Merck’s new BioVentures division will be built around the humanized yeast manufacturing platform developed by Glycofi, a privately-held, company that Merck acquired two years ago. While most of big pharma and big biotech publicly lobbied against new legislation that would make follow-on biologics legal in the US, Merck was surprisingly low key on the subject (now, we know why).
I first learned about Glycofi’s technology platform shortly after the company was formed in the early 2000 and immediately recognized its implication for follow-on biologics manufacturers. I immediately contacted Glycofi’s CEO at the time to see whether or not they would hire me as a “follow-on biologics consultant.” Sadly, because cash was tight (as it always is at start ups) I didn’t get the gig but I did get to know Tillman Gerngross, one of the Glycofi’s founders and its Chief Scientific Officer. Tillman and I spent some down time together at many of the follow-on biologics conferences that I organized where he was an invited speaker.
I was glad (mostly for Tillman) when I learned that Merck was going to by Glycofi for $400 million in cash. That said, the acquisition didn’t make sense to me at the time because Merck didn’t have a biologics division (although it did have a successful vaccine division). After today’s announcement, Merck’s decision to purchase Glycofi makes perfect scientific and financial sense to me. I wish I could have gotten a piece of Glycofi before Merck bought the company. Nevertheless, I take solace in the fact that I, like Merck’s executives, can recognize a winning technology when I see one!
Maybe Merck will turn itself around after all!
Until next time…
Good Luck and Good Job Hunting!!!!!!!
I don't consider it surprising for Merck or any other major international pharmaceutical company to get into the biogenerics/biosimilars business. These products are simply a matter of maturation of the modern biopharmaceutical industry. Also, if one looks at currently marketed biopharmaceuticals, most of those in world commerce and even the U.S. and EU markets are biosimilar/biogeneric in some or many respects, e.g., would be labeled as such if currently in development. This is particularly true for vaccines and blood/plasma products, where true substitution/interchangeability is common.
Merck's acquisition of GlycoFi gives it a technology that can both provide unique, largely impossible-to-copy variations of recombinant proteins and Mabs, and also allows development of improved/upgraded biosimilars. Recently, it seems that most every large pharma/biopharma company has followed a path similar to Merck and taken options, exclusively licensed or outright acquired up-and-coming novel expression systems. In my opinion, the unique, higher-tech products produced by these newer technologies have a bright future, while true biogenerics (exact copies) will be a losing proposition, with dozens of low-end competitors worldwide dragging down prices and the reputation of these products, and with major markets still favoring innovative/improved products, particularly if they offer a price advantage relative to innovator products.