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Pfizer eyes generic biologics market
By Val Brickates Kennedy, MarketWatch
Last Update: 5:09 PM ET Mar 7, 2006

BOSTON (MarketWatch) -- Pfizer Inc. is considering using its vast manufacturing capacity to enter the emerging market for generic biologics, a top executive said Tuesday.

Biologics are therapies based on living cells, as opposed to traditional pharmaceuticals, which are comprised of chemicals. Because of this, biologics must be manufactured in highly specialized plants that adhere to strict manufacturing processes.

"Biologics manufacturing requires a large amount of capacity," Vice Chairman David Shedlarz said. "We're looking to leverage our capacity.

He added that the company regards generic biologics as a promising new market opportunity, with few having the resources to effectively compete.

Shedlarz made his remarks during a presentation at the Cowen & Co. health-care investment conference in Boston.

Beginning in the second quarter, Pfizer (PFE : Pfizer Inc
will be reviewing its biologics capacity to see if additional facilities are warranted, said Shedlarz.
Shedlarz said Pfizer is the eighth-largest biotechnology company in the world measured in sales, so it already commands considerable manufacturing might. Its annual biologics sales totaled about $1.5 billion last year, he said.

Not surprisingly, biologics also tend to be far more costly than traditional pharmaceuticals.
Pfizer's interest in generic biologics comes in the wake of the first such approval in Europe, Novartis' Omnitrope. Novartis has sued the Food and Drug Administration to approve Omnitrope for the U.S. market. Novartis markets Omnitrope, a human growth hormone, through its Sandoz generics division.

As opposed to generic pharmaceuticals, there is currently no definitive process in place for the approval generic biologics in the U.S. However, a growing number of lawmakers, particularly Sen. Orrin Hatch, have been pushing the FDA to draft guidelines that would swing open the door to generic biologics competition.

Shedlarz also said Pfizer will continue to look for biotechnology acquisitions in the $1 billion to $4 billion range, preferably with later-staged products in the pipeline.

"Most of our acquisitions will be focused in that sweet spot," said Shedlarz, "although not all will be late-stage."

Shedlarz added that the company's recent takeover of European biotech group Vicuron Pharmaceuticals for $1.9 billion was a "good example" of the types of deals the drugmaker was seeking.

Val Brickates Kennedy is a reporter for MarketWatch in Boston.