UPDATE 2-Novartis moves ahead with copy of Roche drug

* Novartis’ generics unit Sandoz starts phase II trials

* Starting clinical trials in rheumatoid arthritis

* Novartis, Roche shares trade lower

(Adds analyst comment, details)

ZURICH, Jan 10 (BestGrowthStock) – Novartis (NOVN.VX: ) advanced its
bid to copy Roche’s (ROG.VX: ) multi-billion dollar antibody drug
rituximab on Monday, starting phase II trials for its own
version of the blockbuster medicine.

Drugs firms are racing to come up with versions of Roche’s
drug Rituxan, which raked in 6.1 billion Swiss francs ($6.33
billion) for it in 2009. Known as MabThera in Europe, it is used
to treat non-Hodgkin’s lymphoma (NHL) and rheumatoid arthritis.

The Swiss drugmaker’s generics unit Sandoz started mid-stage
trials in rheumatoid arthritis patients for the so-called
biosimilar version of the drug, Sandoz said on Monday.

Biosimilars — generic copies of biotech drugs used to treat
complex diseases like cancer — are becoming increasingly
important means of building revenues as global pharmaceutical
companies face the loss of patent protection on many of their
established drugs.

“The launch of the phase II programme for biosimilar
rituximab clearly underlines Sandoz’s leading position in the
area of biosimilars and is good news for Novartis,” Vontobel
analyst Andrew Weiss said.

The Novartis unit is the market leader and has nearly 50
percent market share within the global regulated biosimilar
market and three marketed products.

Sandoz’s news comes after Spectrum Pharmaceuticals (SPPI.O: )
said last week it had signed a deal to develop a biosimilar
version of the drug, which loses patent protection in the coming
years. [ID:nSGE70408W]

Israel’s Teva Pharmaceuticals Industries (TEVA.TA: ) said last
year it was launching a second clinical trial using a copy of
Rituxan to treat non-Hodgkin’s lymphoma. It already has a study
under way comparing the original version of the drug with its
copy, known as TL011, in patients with rheumatoid arthritis.

By 1048 GMT, Novartis shares were down 0.8 percent, while
Roche stock was off 0.7 percent. The STOXX Europe 600 Healthcare
index (.SXDP: ) was flat.

Worldwide sales of all biologic drugs reached $130 billion
in 2009, according to IMS Health, and industry analysts believe
the potential market for biosimilar copies could be worth tens
of billions of dollars by the second half of the decade.
(Reporting by Katie Reid; Editing by Sophie Walker)
($1=.9642 Swiss Franc)