Biocad taking biosimilar production to Brazil

Brazil's rapidly growing drug market, fueled by an aggressive government plan to boost healthcare spending, is spurring new production facilities, but not just from the Western drugmakers. Russia's Biocad is building a new $40 million facility to make biosimilars after having struck a partnership with a Brazilian drugmaker to produce a copy of a top cancer drug.

David Zylbergeld, the company's CEO in Brazil, told The Moscow Times that Biocad intends to have the new plant in the southern Brazilian state of Parana built and running in 2015. It expects to get some financing from the Brazilian government, which is encouraging more domestic production to lower its drug-buying expenses. "We are entering a strategic area for the government, which is to supply the poor with biosimilars for cancer treatment that also represent lower costs to the public purse," Zylbergeld said.

The plant is slated to produce trastuzumab and rituximab, which would be biosimilars of Roche's ($RHHBY) Herceptin and Rituxan, as well as a pegylated interferon. He said the country last year spent about $200 million to buy those three drugs from local producers and foreign drugmakers.

According to Zylbergeld, Brazil has pledged to boost drug spending to $14 billion by 2016 from $2.8 billion in 2012. That creates a huge incentive for drugmakers who are looking to boost sales as Western markets stagnate. Sanofi ($SNY), for one, has big operations in that country. But local companies like Hypermarcas have also been building up their operations to get a larger piece of the new spending.

St. Petersburg-based Biocad, which has reportedly been in buyout talks with Pfizer ($PFE) and Amgen ($AMGN), also struck a deal in June with Brazil's Technology Institute of Parana, or Tecpar, a top government drugmaker. Terms were not disclosed, but Tecpar president Julio Felix told the newspaper that it is enough to cover the cost of a new plant. Biocad will transfer technology to the drugmaker and train employees so that it can make a copy of Roche's cancer drug Avastin. The plant will be built in Maringa, where Tecpar plans to build a second facility to further boost its production capacity.

- read the Moscow Times story

Special Report: Top 10 Drugmakers in Emerging Markets