Reuters International

ZURICH (Reuters) - Delays in developing copies of Roche's top-selling biotech drug are justifying the Swiss company's decision to stay out of biotech generics to focus on improved, patented versions of its medicines.

Roche faces its first big test at the end of this year when it loses exclusivity in Europe on MabThera, also known as Rituxan, a treatment for blood cancers and rheumatoid arthritis that had sales of 6.7 billion Swiss francs ($7 billion) in 2012.

The patent loss is the first of several looming expiries on expensive biotech medicines to treat cancer and autoimmune diseases, opening up a big commercial opportunity for those who manage to develop lower-cost copies known as "biosimilars".

Unlike traditional chemical drugs, biotech medicines consist of proteins derived from living organisms which cannot be replicated exactly. Generic copies, therefore, are more difficult to develop and market.

While rival drugmakers such as Novartis and Amgen have opted to develop biosimilars, eyeing a market that could be worth more than $15 billion by 2020, Roche has ruled out generics, preferring to defend its original products.

The strategy is working so far. Uncertainties over the regulatory framework for biosimilars in the United States, plus high manufacturing costs and the need to run clinical trials to win approval, have caused delays.

Israel's Teva, which joined forces with Swiss partner Lonza to develop biosimilars in 2009, suspended its late-stage trial for a MabThera biosimilar last October to seek input from regulators on how to proceed.

Samsung Electronics, which set up a biosimilars joint venture with pharmaceutical services provider Quintiles in 2011, also halted work on its version for "internal reasons", a Korean newspaper reported.

"This is not for the faint of heart," said Jeff George, head of Novartis's generics unit Sandoz, which started developing biosimilars in 1996 and had sales of $335 million in 2012.

"You need experience across the entire bio-pharma value chain, coupled with pretty substantial financial resources to succeed in this space."