Updated from 10:47 a.m. ESTGeneric-drug maker Teva Pharmaceuticals ( TEVA - Get Report) and contract drug manufacturer Lonza Group have formed a joint venture to make and market copies of biotech drugs, the companies announced Tuesday. Teva and Lonza provided no financial details of their new arrangement, but the companies said the joint venture will seek to develop so-called biosimilars, also known as bio-generics, which are copies of drugs made from genetically engineered living cells. By comparison, most drugs sold by large drug companies are made relatively easily from synthetic chemicals. Biosimilars are approved and marketed in Europe, but so far, there is no regulatory pathway for the drugs in the U.S., although Congress is expected to tackle the issue this year or next. Biosimilars are seen as a potential threat to biotech industry mainstays like Amgen ( AMGN - Get Report), Genentech ( DNA) and Biogen Idec ( BIIB - Get Report) because their top-selling drugs could face competition. The biotech industry generally acknowledges that biosimilar competition is coming to the U.S. market but says biosimilars should be more tightly regulated than conventional generic drugs because making copies of drugs from living cells is more complicated. Jerusalem-based Teva is best-known as a maker of conventional generic drugs, with 2008 sales expected to top $11 billion. Last January, Teva purchased CoGenesys for $400 million to boost its know-how in making biotech drugs. Lonza, based in Basel, Switzerland, is an international supplier to the pharmaceutical industry and is often the company to which biotech firms turn to outsource the manufacturing of their biotech drugs. "We had identified biosimilars as a major growth driver for Teva in our long-term strategy and have augmented our knowledge base, capabilities and infrastructure to position Teva as a leader in this market," said Shlomo Yanai, Teva's CEO, in a statement.
More from Stocks
Novartis Still a Buy Despite Controversy Over Blockbuster Drug
Despite the issues that have bubbled up related to its breakthrough drug for spinal muscular atrophy, Zolgensma, Novartis "has the newest pipeline with many drugs just beginning to have an impact on the company's bottom line," Cramer told members of his Action Alerts PLUS club for investors during an exclusive video-conference call.
Could Netflix Survive on Just Its Own Original Content?
Netflix says that viewers shell out for original shows like Stranger Things and Orange is the New Black -- but production costs have ballooned roughly 30% since last year, which has many investors spooked.
Jim Cramer: Mastercard Is One Thing Money Can Buy
The slogan was: There are some things money can't buy; for everything else, there's Mastercard. Fast forward more than two decades and the world of fintech and digital payment processing has changed, and Mastercard has changed right along with it.