Merck KGaA, Dr. Reddy's to cooperate on biosimilars

FRANKFURT (Reuters) - German pharmaceutical company Merck KGaA and India's Dr. Reddy's Laboratories Ltd announced plans to jointly develop biosimilar versions of biotech cancer drugs.

The deal is the latest example of drug companies jumping into a new space that is opening up as patents on biotech medicines expire.

"Sharing know-how, risks and rewards is the right approach to enter the emergent biosimilars market and will be a win-win for both parties," Merck executive board member Stefan Oschmann said in a statement on Wednesday.

Under the agreement, Merck and Dr. Reddy's will co-develop molecules and Dr. Reddy's will lead early product development and testing.

Merck will manufacture the compounds and lead late-stage development. It will also handle commercialisation in large parts of the world and will pay Dr. Reddy's royalties.

(Reporting by Maria Sheahan)