Robert Wessman, the Icelandic entrepreneur who built Actavis ($ACT) into a generics powerhouse and then sold out, has decided get into the biosimilars business. He has gone to his home country with his plans.
Former Actavis CEO Robert
Alvotech will invest $250 million in development and a new biosimilars plant to be built in Reykjavik. Alvotech is a sister business of Alvogen, the generics company Wessman's investment group bought a 40% stake in 5 years ago after he sold his share of Actavis, according to Reuters. Wessman said Iceland is perfect because of its location between the U.S. and Europe. Work started on the facility in November and the company says it expects to have biosimilars in the market by 2018.
Alvogen currently markets biosimilars in Central and Eastern Europen through an arrangement with Hospira ($HSP), which sells biosimilars in Europe. By getting into biosimilars manufacturing, Alvotech will be competing with his former company, which last year was bought out by Watson, which then appropriated the Actavis name.
But Wessman also is banking on a business that requires very precise manufacturing and which has been slow on the uptake. The FDA has yet to lay out the rules for manufacturing and selling biosimilars in the U.S., and the market in Europe has been slow to develop--so slow that Norway intends to fund some trials of its own to prove to the medical profession that biosimilars are as effective as their counterparts. Beginning next year, Norway will start a trial comparing Hospira and Celltrion's Inflectra to its reference product, Remicade. Remicade, which Johnson & Johnson ($JNJ) shares with Merck($MRK), generated more than $2 billion in sales last year in the EU.
Still, if drugmakers can convince doctors of their effectiveness, biosimilars are expected to grow into a huge market. Many of the cell-based drugs they will emulate are among the highest-priced drugs in the market. IMS Health projects the global market for the biologic copies could range from $11 billion to $25 billion in 2020, about 4% to 10% of total biologics sales.
Wessman bought into Alvogen in 2008 after selling his share of Actavis to another Icelander. The Pine Brook, NJ-based Alvogen is expecting to generate $500 million in revenues next year and that he intends to build it into one of the top 10 generic drug companies in the next few years.
- here's the announcement
- here's the Reuters story
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