Biosimilar Battle: Alvotech and Dr. Reddy's Take Aim at $29.5 Billion Keytruda Market

The race to capture the $29.5 billion Keytruda (pembrolizumab) market post-patent cliff is intensifying, and Alvotech and Dr. Reddy's have emerged as formidable contenders. Their June 2025 collaboration to co-develop a biosimilar for this blockbuster cancer drug positions them at the forefront of a high-potential sector poised for explosive growth. Here's why this partnership is a must-watch for investors.

The Post-Patent Cliff Opportunity: A $29.5B Prize Up for Grabs

Keytruda, Merck's PD-1 checkpoint inhibitor, generated $29.5 billion in global sales in 2024. Its U.S. patent expires in 2028, with European exclusivity extended to 2031 via supplementary protections. Despite Merck's efforts to delay biosimilar competition—such as developing a subcutaneous (SC) formulation and expanding indications—the writing is on the wall: biosimilars will carve into its revenue after 2028. Analysts project Keytruda sales to drop to $27.4 billion by 2029 as biosimilars flood the market. This decline creates a $2 billion+ annual opportunity for players like Alvotech and Dr. Reddy's.

Strategic Synergies: Combining R&D Strengths and Commercial Reach

The partnership marries Alvotech's biosimilar expertise with Dr. Reddy's global commercialization prowess.

• Alvotech's R&D & Manufacturing Muscle: With nine biosimilars in its pipeline (including this Keytruda candidate), Alvotech has proven experience in navigating complex regulatory hurdles. Its state-of-the-art facilities in Iceland and Norway enable cost-efficient manufacturing, a critical advantage in biosimilar markets.
• Dr. Reddy's Oncology Experience: Dr. Reddy's has already launched biosimilars like Versavo® (bevacizumab) in the UK and holds FDA approvals for pegfilgrastim in the U.S. Its established oncology salesforce and distribution networks in 150+ countries provide a ready pathway to market.

Together, they aim to accelerate development, secure regulatory approvals, and dominate global launches—potentially outpacing rivals like Samsung Bioepis and Bio-Thera Solutions.

ESG-Driven Demand: Affordable Cancer Care as a Moral Imperative

Biosimilars are a win for ESG investors. They slash the cost of cancer treatment by 30–80% compared to originators, addressing a critical social issue: access to life-saving therapies. Governments and insurers are pushing for biosimilar adoption to curb healthcare spending. For example, the U.S. Medicare program now mandates automatic biosimilar substitution in many cases. This regulatory tailwind ensures sustained demand, making the partnership a socially responsible bet with strong financial upside.

Market Growth Trajectory: $50B+ by 2030? The Data Speaks

The oncology biosimilars market is projected to grow at a 20% CAGR, expanding from $4.18 billion in 2024 to $14.98 billion by 2030. However, this is just the tip of the iceberg.

• Patent Cliff Tsunami: Over 50 blockbuster biologics—including Keytruda, Darzalex, and Opdivo—will lose exclusivity by 2032, unlocking a $236 billion opportunity.
• Untapped Potential: Even in high-value drugs like adalimumab (Humira), biosimilars hold only 2% market share, signaling vast room for growth.

While the $14.98B 2030 figure is conservative, extending this CAGR into the 2030s easily justifies a $50 billion+ total addressable market for biosimilars by 2035. Alvotech and Dr. Reddy's are positioned to capture a meaningful slice of this pie.

Near-Term Catalysts to Watch

• Regulatory Milestones: Submissions for Keytruda's biosimilar could begin as early as 2026, with approvals expected by 2028–2029.
• Market Launches: Post-approval, the duo aims to secure first-to-market positions in the U.S., EU, and Asia-Pacific.
• Stock Performance: and will signal investor confidence in the partnership's execution.

Investment Thesis: Buy the Dip, Ride the Growth

For investors, this is a buy-and-hold opportunity with asymmetric upside:
1. Dr. Reddy's (RDY): A direct play on the partnership, with its oncology pipeline and global reach.
2. Biosimilar ETFs: Consider the iShares U.S. Healthcare ETF (IYH) or sector-specific funds to diversify risk.

Avoid waiting for perfection; catalysts like regulatory wins or partnership updates could trigger sharp rallies. The ESG angle also mitigates regulatory risk, as governments are incentivized to support affordable therapies.

Final Analysis

The Alvotech-Dr. Reddy's collaboration is a masterstroke in strategic synergy, combining R&D firepower with commercial scalability. With oncology biosimilars set to redefine cancer treatment economics, this partnership offers investors a front-row seat to a $50 billion+ market transformation. The clock is ticking—post-patent 2028 is coming fast, and the winners will be those who act now.

Invest with conviction: This is a race to the top—and these two are sprinting ahead.