How are contract service providers positioned for this new market?
The Patient Protection and Affordable Care Act, passed by the U.S. Congress and signed into law by President Obama in March 2010, contains provisions for the FDA to approve abbreviated biological product Applications (aBPAs) for “highly similar” biologics. The move followed 2009’s Biologics Price Competition and Innovation Act, which meant to pave the way for biosimilars. There are still plenty of details to get ironed out — particularly the question of interchangeability (a standard in small molecule generics) and the president’s recent proposal to change the period of exclusivity from 12 years, as negotiated in the PPACA, to seven years — but biosimilars are going to arrive in the U.S. market sooner rather than later.
A recent whitepaper by Dr. Hans-Peter Guler of INC Research contends that the worldwide market for biosimilars, currently under $100 million, may grow to $2 billion by 2014. Some estimates have it reaching $20 billion by 2020, as more lucrative biologics lose exclusivity. Seeing gold in them thar molecules, new players are entering the market.
Of course, it’s not as easy to develop biosimilar large molecules as it is to knock off (most) generic small molecules. Establishing similarity to originator proteins means that some degree of clinical trials will be necessary. As Dr. Guler pointed out in his whitepaper, Development of Biosimilars: A Clinical Perspective, part of the framework for establishing similarity derives from the experience of erythropoietin (EPO). Amgen and Johnson & Johnson each manufactured the protein for different markets, essentially meaning one was making a biosimilar of another. And when there was a slight change in formulation, a slight change in rubber stopper, and a change from IV to subcutaneous injection, one version of EPO became associated with cases of pure red cell aplasia (PRCA), which left patients unable to generate red blood cells. Dr. Guler wrote, “This example shows that safety issues specifically linked to one particular biosimilar product produce and formulated in a specific way can become clinically important both from a safety and an efficacy standpoint. Therefore, comprehensive immunogenicity data is crucial for each biosimilar development program.”
Dr. Guler, who serves as senior vice president, Clinical Development, Endocrinology and Cardiovascular, at INC Research, and has been around the biopharma industry since the days of the first-generation products, told me that the PRCA episode had a severe effect on biosimilar development.
“Regulators became very cautious about getting trials conducts,” he said. “It was a heavy challenge for them and biopharma companies to determine the right thing to do.” One of the important results, he said, was that the EMA wrote guidances specifically involved in immunogenicity. “Clinical programs became 12-month studies with six-month extensions.”
In the Clinic
In addition to extended studies, the growing biosimilars market creates opportunities for contract service providers across the spectrum. “We are seeing an increasing demand from biopharma companies for our strategic consulting services related specifically to the development of biosimilar programs,” said Dirk Reitsma, M.D., vice president of global drug development, PPD, Inc. He added that the growing demand led the company to establish a biosimilar development services group aimed at bringing together all of its biologics and biosimilar expertise. “This group reviews all available aspects of the proposed biosimilar plan, particularly the indication selection, the use of endpoints, statistical design and the known regulatory landscape, including recent experience with biosimilar submissions in countries around the world.”
PPD also recently formed a joint venture with Taijitu Biologics Ltd. to support lead generation and lead optimization of biosimilars and best-in-class biotherapeutics. The JV will be run out of Munich and Shanghai.
In fact, Asian markets are seen as a major draw for biosimilars. Quintiles recently made news by forming a joint venture in biomanufacturing with Samsung, the Korean firm best known for consumer electronics. Quintiles will put up $30 million for a 10% share of the new biologics facility in South Korea. At the announcement, Samsung executive vice president Kim Tae Han mentioned that the JV planned to make a biosimilar of Rituxan, which is protected in the U.S. through 2018, but expires in other markets in 2013. A move like that indicates that biosimilars aren’t being fueled only by the potential of the U.S. market, but also the changing healthcare landscape across the east.
“We are very pleased that Samsung has selected Quintiles as its ally to enter the biopharmaceuticals business through the manufacture of biosimilars,” said Anand Tharmaratnam, senior vice president and Head of Asia Markets for Quintiles. “As big biotech and pharma companies grapple with rapidly approaching patent cliffs and shrinking product pipelines, biosimilars provide a silver lining in the New Health by allowing biopharma to extend their product portfolios. According to industry analysts, the potential market for biosimilars will be worth tens of billions of dollars by the second half of this decade. For Quintiles, this represents a significant outsourced development market — especially in key growth markets like India, China and South Korea.”
In another interesting east-west development, Fujifilm recently acquired the Merck Biomanufacturing Network (MBMN), which Merck had only recently assembled after acquiring Diosynth (via Schering-Plough) and Avecia. Fujifilm’s plans haven’t been laid out at press time, but we know that they will continue with Merck’s current clients. Will they follow the Samsung/Quintiles plan and become a bio-CMO and biosimilars developer?
Don’t think that Merck’s selloff of MBMN means Merck is getting out of biosimilars. A few weeks before Fujifilm made its acquisition, Merck’s BioVentures group formed a biosimilars strategic alliance with PAREXEL in which the latter will provide, “strategic access to a broad range of regulatory strategy and clinical development planning capabilities for the development of certain broad classes of biosimilars across various therapeutic areas, including exclusivity for certain candidates,” according to a Merck statement.
I spoke to PAREXEL’s chief executive officer, Josef Von Rickenbach, about the Merck alliance, but he couldn’t reveal too much that wasn’t covered in public statements. He noted, “In certain areas of the biosimilars space, we will work exclusively with Merck in development. We're ring-fencing an operating unit for the purposes of this effort, with dedicated individuals attached to it.”
Mr. Von Rickenbach contended that his company made a concerted effort to build expertise in biosimilars from the early days. “I can say, without blushing, we are really a leader in the development of biosimilars,” he remarked. “We have achieved this leadership status through an investment we have made into this expertise, mainly regulatory at the beginning, and predominantly in Europe.”
“We were riding the biosimilars wave in Europe all along,” Mr. Von Rickenbach added. “We have a number of drug development experts involved with regulators and clients and the rest of the community. That experience carried over as interest arose in the U.S., putting us in the position where we could form a partnership with a company like Merck.”
None of the providers I spoke to could ascribe a particular reason why Europe was so far ahead of the U.S. in terms of a regulatory pathway. Most simply treated it as a reality of the industry and, like Mr. Von Rickenbach, are just happy that the U.S. is becoming serious about it.
In the Vat
Manufacturers are also playing a part in the biosimilars market. Bio-manufacturers are facing some interesting challenges when it comes to this new field.
Hans Engels, president and business unit director, DSM Pharmaceuticals Inc., remarked, “The rise of various forms of biosimilars (follow on biologics, biobetters) is inevitable. From a business perspective we must be aggressive in entering this field of play to satisfy our fiduciary responsibility to shareholders. And from an ethical perspective we want to be a significant player in providing low cost, high quality products to patients.”
Asked how DSM reconciles its work on biosimilars with its innovator biologic clients, Dr. Engels responded, “This actually has become an important issue for us, given that we currently manufacture several of the top brand biologic drugs on the market. We have a biologic API supply business unit within our business group, and we know we can provide great value to customers by providing combined API and Fill/Finish services within DSM.”
He added, “We understand the innovator predicament with this change in the regulatory landscape. As a service provider, we need to ensure high asset utilization. And we also want to maintain excellent relations with all customers. As such we are open to including negotiated language within Supply Agreements for restricting fill/finish of specific biosimilars for a certain period of time. However, the business reality is that if we don't fill/finish those biosimilars at our site, they will be supplied from another source.”
E. Morrey Atkinson, Ph.D., the recently named vice president of R&D and chief scientific officer of Cook Pharmica, echoed some of Mr. Engels’ statements, noting, “A fill/finish line is not sensitive to the product going in it. Syringes and vials will take any product.”
Dr. Atkinson was sanguine about the growth of biosimilars: “We're responding to RFPs, whether they’re for an innovative compound or a biosimilar. Our goal is to match requests with our capabilities.”
Among the critical capabilities, he contends, is analytical support. “Clearly, establishing comparability is going to be the lynchpin of a successful biosimilar strategy. There's a significant clinical component to that, but all comparability begins with the analytical component,” Dr. Atkinson commented. “It's incumbent on us when we're working on a biosimilar to provide strong analytical support for the client, as well as strong, consistent manufacturing processes. That way they'll have predictive power over their production and an understanding of the effect of the process on the product.”
Cook Pharmica’s single-site expertise in both drug substance and drug product manufacturing, said Dr. Atkinson, provide it with a significant advantage in translating bulk substance into a finished product while retaining comparability.
Given their need for clinical data and manufacturing expertise, biosimilars will likely never yield the proportional cost savings of small-molecule generics.I doubt we’re going to see $4 prescriptions of EPO at a chain pharmacy anytime. Still, they present significant opportunities for incremental innovation and expanded treatment in less developed regions. And they may just spur innovator biopharmas to develop the next generation of biotherapeutics.
Depending on how long an exclusivity period Congress settles on.
My Bio-Better Half
In addition to biosimilars, companies are also developing bio-betters, compounds that improve on original innovator proteins, rather than “simply” copying them. These drugs are modeled after first-generation biologics (already non-exclusive, in other words) and attempt to enhance activity, reduce dosing, and/or limit side effects. It’s not a new concept: for example, Amgen’s Neulasta is an improved version (via PEGylation) of Neupogen, permitting a reduced dosing schedule.
This area is also attracting contract service providers.I corresponded with Niall Dinwoodie, Head of Product Characterization at Charles River Laboratories, about his company’s work in bio-betters.
CP: Why are companies getting into bio-betters?
ND: Many companies that were considering entering the biosimilar market have watched the uptake of such products in Europe and compared sales to the cost of developing the regulatory package required. Bio-betters allow these companies to reduce the risk in developing a new product by targeting an established mechanism, safety and efficacy profile; the costs are the same as developing a new biological product, but the chances of successful registration are significantly higher.
CP: How is CRL helping clients develop bio-betters?
ND: Charles River has extensive experience developing testing programs for originator biological products and uses this experience to assist bio-better developers tailor their package of testing to their product. We have developed product-specific testing programs for biosimilars where regulatory guidance is available, but we recognize the complexities of new and better biological products and provide guidance for maximizing the regulatory impact of the studies performed.
CP: How closely do bio-betters parallel life-cycle management for a small molecule product (that is, developing
better dosing regimens from the original product)?
ND: Bio-betters will have some advantage in dosing regimen — less frequent dose due to extended pharmacokinetics, change in dosing route or storage through enhanced stability — but they require a full registration package as they are new molecules, so that’s a significant difference from extending the use of an existing small molecule, where only limited clinical trials may be needed.
CP: What opportunities does Charles River see in this field?
ND: We see significant interest in bio-betters from manufacturers that were considering the biosimilar market but wish to use their scientific expertise to become originators. Existing originator companies are also partnering with companies with specialized technology for example, peg-ylation to develop bio-betters from their original product.
Gil Y. Roth has been the editor of Contract Pharma since its debut in 1999. He can be reached at firstname.lastname@example.org