Fresenius turns to WuXi to add up to 37 biosimilars to its pipeline

Why it matters: Fresenius wants to expand its biosimilar business substantially. To this end, the Germany-based health care group has signed an exclusive development agreement with Chinese contract development and manufacturing organization WuXi Biologics. The agreement gives Fresenius access to up to 37 identified biosimilar candidates over the next 10 years. Its existing portfolio of marketed molecules and those in development could consequently grow from 29 to as many as 66. According to Fresenius, the reference products targeted by these candidates generate combined sales of more than €370 billion at list prices.

Yes, but: That figure, however, should not be equated with the future market available to biosimilars. It represents sales of the reference products for which Fresenius could develop potential follow-on versions. The company will decide which of the 37 candidates actually enter development, based on market attractiveness, development risk and expected returns. WuXi Biologics will be paid on a fee-for-service basis for each selected candidate. In return, Fresenius will receive exclusive worldwide commercialization rights and retain the full economic interest in the resulting products.

The agreement is therefore less a conventional licensing deal than a way to secure strategic access to a broad development pipeline. Fresenius can select programs gradually, without having to commit development funding to all 37 candidates from the outset. Actual research and development spending will increase only as the selected projects advance. This will weigh on the biopharma business’s profitability in the short term, while the products are intended to generate additional revenue and earnings over the longer term.

Two initial candidates take priority: Development will initially focus on polatuzumab vedotin and teprotumumab. Polatuzumab vedotin is an antibody-drug conjugate marketed as Polivy for the treatment of diffuse large B-cell lymphoma. Teprotumumab is marketed as Tepezza for thyroid eye disease, an inflammatory eye condition associated with Graves’ disease. The two drugs illustrate the agreement’s technological breadth: Alongside conventional monoclonal antibodies, the potential portfolio includes bispecific antibodies, ADCs and fusion proteins across 13 therapeutic areas.

Development will initially take place through WuXi Biologics’ global network. Fresenius intends to determine the long-term manufacturing strategy for each candidate itself. This is where its latest acquisition comes into play: Since October 2026, Fresenius has also owned the remaining minority stake in mAbxience, giving it full ownership. The Spanish company is expected to manufacture selected biosimilars in the future. Fresenius is thus combining external development capacity with its own platform for subsequent manufacturing and commercialization.

The big picture: The deal is part of a broader strategic shift. Fresenius wants to expand its biopharma business as a pillar of growth and aims to nearly double revenue by 2030 compared with 2025, with an EBIT margin of around 20%. This target still relates to the existing marketed and late-stage portfolio. The WuXi agreement is intended to create additional potential beyond 2030. It is to be financed through operating cash flow, with no new debt required, according to the company.

The move is also notable in comparison with competitors. Fresenius Kabi generated €871 million in biopharma revenue in 2025, an increase of 43%. Biosimilar specialist Sandoz still plays in a different league, recording biosimilar sales of $3.3 billion that year. It generated a further $2.9 billion in the first nine months of 2026. Fresenius is therefore still considerably smaller, but it is growing rapidly and is now systematically expanding its position.

Yet biosimilar pioneer Sandoz also has bigger plans. There is good reason for this: Biosimilars now account for around a third of the generic drug group’s total revenue. Sandoz also has ambitious long-term targets: more than doubling annual revenue by 2035 and building a portfolio of 100 biosimilars by 2040.

By the numbers: The timing is no coincidence. The biologics market faces a major wave of patent expirations in the coming years. From 2028 onward, numerous high-selling products will lose protection. Depending on the industry source and time frame, estimates put the sales exposed to patent expiry at $300 billion to $500 billion. This gives biosimilar manufacturers an opportunity to enter markets previously dominated by individual reference products. Biologics already rank among the medicines accounting for the highest expenditure by Germany’s statutory health insurance system. According to industry association Pro Generika, 12 of the 25 medicines with the highest expenditure in Germany in 2026 were biologics.

Consultancy Prognos examined the scale of the economic potential in a study commissioned by Pro Generika’s AG Pro Biosimilars group. For the period from 2025 to 2035, the study calculates potential savings for statutory health insurers of around €3 billion in a low-end scenario, €13.4 billion in the reference scenario and up to €41.3 billion under particularly intense competition. According to the model, the market accessible to biosimilars could grow from €5.8 billion in 2025 to around €15.3 billion in 2035.

The wide range also shows that patent expirations alone do not guarantee savings. The decisive factors are the availability of biosimilars, their market penetration, price developments and the time between patent expiry and actual market entry. The scenarios are therefore not forecasts, but modeled possibilities under different competitive conditions. German health insurer Techniker Krankenkasse had previously highlighted substantial untapped potential: It estimated possible savings of around €2.9 billion in the market open to biosimilar competition for 2025.

Competition and security of supply are in tension: This brings health policy into focus. The debate centers primarily on exclusive rebate agreements with health insurers. These can deliver substantial price reductions in the short term because only one supplier is awarded the contract. Manufacturers and industry associations warn, however, that this kind of competitive undercutting could drive companies out of the market and reduce the number of suppliers. Developing and manufacturing complex biological medicines requires considerable resources; maintaining broad competition among several manufacturers over the long term is therefore also a matter of supply security.

Germany’s Pharmacy Care Development Act initially suspended exclusive rebate agreements for biosimilars until mid-2028. Whether they will return afterward remains politically unresolved. The industry is calling for permanent safeguards to preserve competition among multiple suppliers. Health insurers, meanwhile, point to the substantial pressure to contain pharmaceutical spending. The conflict is therefore fundamental: How much short-term price competition makes sense without weakening the supplier base, and consequently supply, over the longer term?

The usual term here is “automatic substitution,” which industry associations oppose because it prevents continued competition among suppliers. Their argument is that awarding a contract to a single supplier would trigger a ruinous price war that could generally only be won by Asian suppliers. Austria uses a winner-takes-all approach to awarding contracts, much to the displeasure of European manufacturers. In Switzerland, by contrast, with its many domestic originator companies, biosimilar access is made more difficult from the outset. Its substitution rate has therefore so far lagged well behind those of other European countries.

The bottom line: Through the agreement, Fresenius is positioning itself in this growing market as a developer and commercial partner that secures early access to potential candidates through WuXi Biologics while seeking to retain control over selection, manufacturing and worldwide commercialization. The collaboration represents a major expansion of its pipeline, but it will not immediately contribute to medicine supply or ease the financial burden on health insurers. Before these options become approved biosimilars, the selected candidates must first be developed, tested and taken through the approval process. Nevertheless, the real competition for the markets opened up by forthcoming patent expirations is already beginning.

For small and midsize biosimilar developers such as Munich-based Formycon, Fresenius’ new strategy means competition is likely to intensify. Identifying suitable biosimilar candidates that have not already been targeted by the major players is also likely to become increasingly difficult.