Eli Lilly & Co. (LLY) has no plans to form a new unit devoted to copycat versions of other companies' biotechnology-style drugs, but it may selectively pursue making drugs that improve upon existing biologics, the pharmaceutical company's chief said Friday.

Chief Executive John Lechleiter told Dow Jones Newswires "there may well be a place for follow-on biologics in certain parts of our portfolio, but we're not interested in developing a follow-on biologics business per se."

Lechleiter's remarks came in a telephone interview from Orlando, Fla., where he's attending a major cancer meeting, and they further clarified Lilly's strategy for pursuing follow-on biologics.

He first broached the possibility of Lilly's entry into follow-on biologics in December, when asked about rival Merck & Co.'s (MRK) announcement that it would form a new division devoted to making follow-on biologics. At that time, Lechleiter said Lilly was "very much considering" that, but had no firm plans.

One form of follow-on biologics, "bio-similars," would be generic versions of existing protein-based drugs, but there is currently no regulatory pathway in the U.S. for their approval. Legislation is in the works in Congress to establish such a pathway, and Lechleiter said Lilly would assess the prospects for this kind of business more intently once a pathway is in place.

Meantime, Lechleiter said Indianapolis-based Lilly was more likely to selectively pursue another type of follow-on biologic -- what he and some other industry insiders have called "bio-betters." These would be similar to existing biotech drugs, but different enough to qualify for regulatory approval as new biologic entities under existing regulations.

"They could in the best case be better versions of existing biologics," Lechleiter said.

Separately, Lechleiter said Lilly remains interested in acquisitions to build its animal-health business, potentially including assets that may have to be divested by Pfizer Inc. (PFE) and Merck & Co. (MRK) in order for those companies to gain antitrust clearance for the pending acquisitions of Wyeth (WYE) and Schering-Plough Corp. (SGP), respectively.

-Peter Loftus; Dow Jones Newswires; 215-656-8289; peter.loftus@dowjones.com