Teva Pharmaceuticals Industries Ltd. (TEVA, TEVA.TV) has begun testing of a copycat version of cancer and rheumatoid arthritis drug Rituxan, sold by Biogen Idec Inc (BIIB) and Roche Holding AG (RHHBY, ROG.VX).

The drug may take years to reach the market, something that isn't assured, but it will be aiming for a large market. Rituxan, which had 2009 global sales of $5.7 billion, is significant to the businesses of both Biogen and Roche, which are working on second-generation versions of the drug.

Rituxan is approved to treat non-Hodgkin's lymphoma, chronic lymphocytic leukemia and rheumatoid arthritis. According to a U.S. government website, the Israeli Teva has launched a clinical trial of the drug, called TL011, in severe, active rheumatoid arthritis that will be complete in mid-2011.

The recent health-care overhaul opened a regulatory pathway for biosimilars--the closest thing possible to a genetic version of complex biotech drugs--and unlike traditional generics the approval of many of the drugs is expected to require clinical testing. The market could be large, and Teva projected earlier this year that about $53 billion in branded biologic sales will be exposed to biosimilar competition by 2015 through patent expirations alone.

The testing of Teva's drug, enrolling 60 patients in Germany and Hungary, will show how the drug interacts with the body in comparison to Rituxan, along with safety and preliminary effectiveness data.

Officials from Teva said the drug is part of its joint venture with Lonza Group AG (LONN.VX) to develop biosimilars. Additional details weren't available and the company's intentions for the drug are unclear. It may need to conduct additional testing to bring such a drug to market in either the U.S. or Europe, where Rituxan is sold as MabThera.

A Roche spokeswoman said that generic versions of Rituxan need to go through extensive testing to be safe. "This is of vital interest to us," she said.

Officials from Biogen weren't immediately available for comment.

Teva is expected to be a major force in the biosimilars market and has already filed for approval of a biosimilar version of Amgen Inc.'s (AMGN) Neupogen, a move that Amgen is trying to block through litigation.

According to regulatory filings, the main patents related to Rituxan expire in the U.S. between 2015 and 2018 and in the rest of the world in 2013.

Roche and Biogen are clearly interested in defending Rituxan. Earlier this year, they filed a lawsuit alleging that GlaxoSmithKline PLC's (GSK, GSK.LN) cancer treatment Arzerra infringes a recently issued patent covering the mechanism of Rituxan in treating CLL.

Rituxan was approved in 1997 as the first cancer-specific monoclonal antibody to reach the market and copying such a therapy would be notable.

The drugs are large proteins produced through biological processes--usually using Chinese hamster ovary cells--and usually seek out very specific cell-based targets in the body.

Many current biologic blockbusters are monoclonal antibodies, including Roche's cancer drug Avastin and Biogen's multiple sclerosis drug Tysabri, and many more are in development.

Rituxan works by binding to an antigen called CD20, which is located on the surface of most B cells, a type of immune cell. The use of Rituxan stops the B cells, which are involved in the development of multiple types of blood cancers.

-By Thomas Gryta, Dow Jones Newswires; 212-416-2169; thomas.gryta@dowjones.com