Israel's Teva Pharmaceutical Industries is developing a generic version of Roche's blockbuster antibody drug Rituxan, highlighting the race to produce so-called biosimilar medicines. Teva is recruiting 60 patients in Germany and Hungary into a clinical trial comparing Roche's original product with its copy, known as TL011, in patients with rheumatoid arthritis. The study is due for completion in August 2011, according to a post on clinicaltrials.gov.

A spokesman for Teva's partner Lonza said his company was also involved in the trial, adding the drug was expected to be launched in the second half of 2014, assuming positive results in development and approval from regulators.

Rituxan, also known as MabThera, is marketed for treating non-Hodgkin's lymphoma, rheumatoid arthritis and chronic lymphocytic leukemia. Sales last year totalled 6.1 billion Swiss francs ($5.2 billion). It is one of the older antibody drugs that generic companies are now eyeing as a major sales opportunity.

With the global market for branded biologic drugs worth more than $80 billion a year and roughly $50 billion of that business set to lose patent protection by 2015 or 2016, biosimilars like Rituxan are an enticing prospect.

Teva, the world's largest generic drugmaker, formed a biosimilars partnership with Swiss contract manufacturer Lonza in January 2009 and industry analysts said at the time that Rituxan could be an early target of their alliance. Teva's arch-rival Sandoz, the generics unit of Swiss drugmaker Novartis, has made biosimilars a top priority as well.

Within the mainstream pharma sector, Merck & Co has also set up a biosimilars unit to tap into the opportunity, although it suffered a setback recently after halting work on a biosimilar anaemia drug.

Used to treat complex diseases like cancer and rheumatoid arthritis, biotech drugs are more expensive and difficult to make than traditional chemical medicines because they are derived from living cells. That means regulators and some doctors may be more wary about swapping patients from the original branded product. But the upside is that biosimilars - which can cost $100 million to develop, as against $5 million to $10 million for a conventional generic chemical drug - will enjoy far higher margins. In effect, biosimilars, the first of which are already available in Europe, are positioned halfway between patented brand medicines and typical bargain-basement generics.