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Investing.com -- Shares of Dr. Reddy’s Laboratories Ltd ADR (NYSE:RDY) climbed 3.1% in premarket trading today following the announcement of a collaboration and license agreement with Alvotech to co-develop, manufacture, and commercialize a biosimilar candidate to Keytruda® (pembrolizumab), a leading cancer treatment. The partnership aims to capitalize on the growing biosimilar market, leveraging both companies’ strengths to expedite the development process and broaden global access to this biosimilar candidate.
The collaboration is expected to combine Dr. Reddy’s experience in biosimilars with Alvotech’s dedicated R&D and manufacturing platform. Under the agreement, both parties will share the responsibilities and costs associated with the development and manufacturing of the biosimilar, with each retaining rights to commercialize the product globally, subject to certain exceptions. This strategic move is anticipated to enhance Dr. Reddy’s presence in the oncology sector, which aligns with its focus on developing affordable treatment options in key therapeutic areas.
Róbert Wessman, chairman and CEO of Alvotech, expressed confidence in the partnership, stating, "This agreement demonstrates Alvotech’s ability to leverage its dedicated R&D and manufacturing platform for biosimilars, accelerating the expansion of our pipeline by pursuing growing global markets." Wessman emphasized the collaboration’s potential to increase the availability of biologic medications that are cost-effective for patients worldwide.
Erez Israeli, CEO of Dr. Reddy’s, also commented on the collaboration’s alignment with the company’s strategic goals, "Oncology has been a top focus therapy area for us and this collaboration will further enhance our capabilities in oncology, as pembrolizumab currently represents one of the most critical therapies in immuno-oncology.”
The market’s positive reaction to the news reflects investor optimism about the potential growth and profitability that the collaboration between Dr. Reddy’s and Alvotech could bring. With global sales of Keytruda reaching US$29.5 billion in 2024, the development of a biosimilar could present a significant opportunity for both companies in the competitive biopharmaceutical market.
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