Bionovis To Start Local Biosimilar Production

BMI View: The Brazilian government has pledged to boost its local pharmaceutical industry to enable cost-effective healthcare spending and to generate economic growth. We highlight that there will be significant opportunities in Brazil's biopharmaceutical market for both domestic and multinational companies. As the government is a major player in the market, it is essential for drugmakers to develop close relationships with local authorities to realise their strategic ambitions.

The Brazilian Government has signed an agreement with Companhia Brasileira de Biotecnologia Farmaceutica (Bionovis) to construct a new site in the state of Rio de Janeiro, near the Oswaldo Cruz Foundation (Fiocruz). Bionovis, a joint venture formed between four major local players, Hypermarcas, Ache, EMS and Uniao Quimica in 2012, will invest BRL550mn (USD249mn) and create 150 direct jobs within three years. Brazil's National Economic Development Bank (BNDES) will provide a credit line to finance the project and the state government will provide tax incentives for Bionovis to settle in Rio.

Bionovis' new unit will include a research and development centre, a manufacturing plant and a distribution centre. 'It remains challenging for the country to produce innovative biopharmaceutical products. This partnership will promote innovation and production in the biopharmaceutical sector,' explained the President of Fiocruz, Paulo Gadelha. The Secretary for Economic Development, Julio Bueno, said 'the biotechnology industry is very attractive. The Bionovis project is the first in Brazil's biosimilar sector. It will diversify the economy of the city.'

Robust Growth
The Pharmaceutical Market Outlook In Brazil

BMI View: The Brazilian government has pledged to boost its local pharmaceutical industry to enable cost-effective healthcare spending and to generate economic growth. We highlight that there will be significant opportunities in Brazil's biopharmaceutical market for both domestic and multinational companies. As the government is a major player in the market, it is essential for drugmakers to develop close relationships with local authorities to realise their strategic ambitions.

The Brazilian Government has signed an agreement with Companhia Brasileira de Biotecnologia Farmaceutica (Bionovis) to construct a new site in the state of Rio de Janeiro, near the Oswaldo Cruz Foundation (Fiocruz). Bionovis, a joint venture formed between four major local players, Hypermarcas, Ache, EMS and Uniao Quimica in 2012, will invest BRL550mn (USD249mn) and create 150 direct jobs within three years. Brazil's National Economic Development Bank (BNDES) will provide a credit line to finance the project and the state government will provide tax incentives for Bionovis to settle in Rio.

Bionovis' new unit will include a research and development centre, a manufacturing plant and a distribution centre. 'It remains challenging for the country to produce innovative biopharmaceutical products. This partnership will promote innovation and production in the biopharmaceutical sector,' explained the President of Fiocruz, Paulo Gadelha. The Secretary for Economic Development, Julio Bueno, said 'the biotechnology industry is very attractive. The Bionovis project is the first in Brazil's biosimilar sector. It will diversify the economy of the city.'

We note that the initial local production of biopharmaceuticals in Brazil will focus on seven drugs: rituximab, infliximab, etanercept, infliximab, cetuximab, trastuzumab and bevacizumab. Multinational pharmaceutical companies, the original patent holders, will provide technologies to local drugmakers to manufacture these products. It is estimated that domestic production of these drugs will save the federal government at least BRL150mn (USD68mn) per year in the Unified Health System (SUS).

We believe that in recent years, the public-private partnerships (PPPs) between foreign and domestic drugmakers have been one of the most powerful tools by which the government has achieved some of its social and economic objectives. Due to the PPPs, the Brazilian government, the major player in Brazil's pharmaceutical market, has enabled more affordable, effective medicines to be produced by local drugmakers, offering effective and sustainable control of many diseases, and reducing the financial burden on local citizens.

Domestic manufacturers, strengthened by the government's favourable policies and well equipped with carefully selected advanced production technologies, have emerged as a competitive force in the Latin American generic drug market. By June 2013, local biosimilar drug sales reached BRL9bn (USD3.8bn), which came closer to the generic small molecule drug market size, valued at around BRL13bn (USD5.5bn). We highlight that there will be significant opportunities in Brazil's biopharmaceutical market for both domestic and multinational companies. As the government is a major consumer of medicines in Brazil, it is essential for drugmakers to develop close relationships with local authorities to generate meaningful revenue growth.

Robust Growth
The Pharmaceutical Market Outlook In Brazil

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Related sectors of this article: Pharmaceuticals & Healthcare, Biosimilars
Geography: Brazil
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