SEOUL - South Korea's Celltrion inked an agreement with U.S.-based Hospira to collaborate on manufacturing and marketing Celltrion's eight biogeneric products in global markets including the U.S. and Europe.

Details including financial terms of the deal were not available, but industry watchers say marketing of Celltrion products by Hospira will be made in the form of "co-exclusivity," which allows for separate brand names in Australia, Canada and New Zealand, besides the U.S. and Europe.

Celltrion official Hong Cheon-Gi told PharmAsia News that the deal will "expand to a bigger deal with Hospira in the future."

"When the two sides recently signed the agreement, they agreed - in principle - to move forward in the future for a strategic alliance including M&A," said Hong, quoting Celltrion CEO Seo Jung-Jin as saying the deal was made because Hospira had the capability and experience to successfully sell biogenerics in the important global markets.

Noting a final agreement would be signed in coming months, Hong said the cooperation with Hospira will create a "great synergy effect" for both pharmas in the generic sector.

"This partnership gives Hospira access to Celltrion's large biogenerics portfolio, and is an excellent example of Hospira's commitment to organic and inorganic growth," Hospira Chief Executive Chris Begley said.

Hospira, based outside Chicago, is known as the leading seller of generic injectable drugs and is set to become a major player in the fledgling field of follow-on biologics. Hospira is marketing its erythropoietin biosimilar in Europe under the brand name Retacrit (epoetin zeta). It also achieved full global rights last month to manufacture G-CSF filgrastim, a generic version of Amgen's Neupogen .

Shares of both Celltrion and Hospira are traded on the New York Stock Exchange and the Korea Stock Exchange.

M&A Arms Korea With Global Sales Network

If Celltrion is merged with Hospira, the consolidated pharma would be South Korea's first multinational pharma armed with both a global sales network and its own products.

Up until now, Celltrion's main business has been manufacturing products for others. At present, it is manufacturing Bristol-Myers Squibb's rheumatoid arthritis agent Orencia (abatacept) and gearing up to manufacture products for Australia's CSL and Sanofi-Aventis.

Celltrion earlier said it was developing nine blockbuster biosimilar monoclonal antibodies, and was preparing for the launch of three biosimilars for markets not protected with patent rights. The three products are biosimilars of Roche's oncology agent Herceptin (trastuzumab), Johnson & Johnson's RA product Remicade (infliximab) and Imclone and Bristol-Myers Squibb's oncology agent Erbitux (cetuximab) (Also see "Korean Celltrion Gears Up To Produce Biosimilar Herceptin, Remicade, Erbitux; Proposes Barter System In Developing Regions" - Scrip, 2 July, 2009.).

The company is outlicensing its sales rights to those products to pharmas in developing countries including China, India and South America under what it calls a multinational pool center system, Kim Yng-Joong, Celltrion's strategic planning assistant manager said. "Our basic outline is that we provide the pharmas in the regions with sales rights for our biosimilars, so that they can sell our biosimilars [to be produced in South Korea] in their countries."

Celltrion also plans on selling its biosimilars in advanced countries such as the U.S. and Europe through its own sales network since those countries have the capability to produce their own biosimilars.

Beside Celltrion, other South Korean companies such as Greencross, Daewoong Pharmaceutical, Yuhan, Hanhwa, Samsung and LG Life Sciences are also ramping up to establish a stronghold in the biosimilar sector (Also see "Korea FDA Gears Up To Release Biosimilar Guidelines Modeled After EU Rules" - Scrip, 21 May, 2009.).

Hoping to have at least three local biosimilars in development by 2012, the Ministry for Knowledge Economy said it would use part of a government support package of KRW 100 billion ($83.3 million) earmarked for national biotech projects and allocate funds for research and development and capital investment in biosimilars (Also see "Korean Government Accelerates Support For Homegrown Biosimilars" - Scrip, 1 June, 2009.).

- Peter Chang (p.chang@elsevier.com)

Korea's Celltrion In Deal With U.S.-based Hospira For Biogeneric Sales; M&A Hinted At

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