S. Harachand, Contributing Editor07.18.12
Seeing an all-new avenue open up in the form of generic biologics, companies with interests in bio-drugs are hurrying up to define new sorts of alliances. The idea is to equip themselves well so that players won't lose out in the race to grab a fair share in the prospective market.
The market for the so-called biosimilars, thus far, is not well defined. A universally acceptable regulatory roadmap for these complex biologic substances is still only halfway complete.
Nevertheless, the stakeholders are more than certain about the enormous potential for the low-priced clones of expensive biotherapeutics.
Nevertheless, the stakeholders are more than certain about the enormous potential for the low-priced clones of expensive biotherapeutics.
This view is further corroborated by the increasingly pro-generic sentiment worldwide. A number of pricey biologics are set to lose their patent protection in the next few years, and any less costly equivalent of these sought-after therapies will be welcome not only to needy patients but to payers as well.
Analysts see the demand for biosimilars surge in the immediate future. The global market for biosimilars is forecast to reach $17.9 billion by the year 2017. The steep growth will be driven primarily by the increasing demand for biotech drugs, cost-effectiveness of biosimilars in comparison with their expensive counterparts, impending patent expiries of major biologic drugs, aging population and increasing incidence of cancer and other critical diseases, says a new report by Global Industry Analysts.
Casting an eye on the emerging biosimilar pie, several firms have already started honing their skills to recreate own versions the sophisticated biotherapeutics. Meanwhile, the not-so-well-heeled in the domain are in the look-out for strategic partners. The second lot, however, is looking at the field a tad cautiously. Making copies of bio-drugs is far more cumbersome and requires proven know-how to obviate costly mistakes.
Close but Cautious
This extra dose of caution probably explains why these firms try models of alliances that may appear to deviate from conventional lines. For example, Merck Serono struck a deal with India’s Dr. Reddy's Laboratories in June to produce monoclonal antibodies. The innovative prescription pharmaceuticals division of drug German drug maker Merck KGaA may be looking to build a low-cost line-up to hedge the heat of generic challenges that its own innovative products face in the near future. Dr. Reddy's has a track record of bringing several biogenerics, including monoclonals, to the Indian market. By roping in a company considered a pioneer in the biosimilars manufacturing space, Merck has found a strategic fit.
The structure of the deal, however, is out of the ordinary. In typical generics deals, sourcing of generics is done mostly as finished products or as intermediates. However, this full R&D cost-sharing agreement requires the Indian drugmaker to take up only early product development and complete Phase I studies. Then Merck Serono will take over manufacturing of the compounds and will lead phase III development — somewhat akin to the models being pursued by a slew of Indian firms involved in drug discovery research.
The companies have not disclosed the details of the pipeline. Merck will be responsible for marketing of the products globally, outside the U.S. and with the exception of select emerging markets. In turn, Dr. Reddy's will receive royalty payments from Merck Serono upon successful commercialization. In the U.S., the companies will co-commercialize the products on a profit-sharing basis, said an official release announcing the deal.
Repeat a Similar Magic?
Commenting on the deal, Merck Serono's chief executive said the know-how, risks and rewards sharing model was a win-win for both parties and endorsed it as “the right approach to enter the emergent biosimilars market.” In the meantime, Dr. Reddy's underscored the joint expertise as the basis for a powerful global partnership, especially when guidances on biosimilars are being worked out in major markets.
Previously, a couple of cross-border pacts had already reached India’s biogenerics space. In 2009, Mylan entered into a JV with Biocon to make biosimilar versions of trastuzumab (Roche’s Herceptin), peg-filgrastim (Amgen’s Neulasta), bevacizumab (Roche’s Avastin), adalimumab (Abbott’s Humira) and eternacept (Pfizer and Amgen’s Enbrel). Generic trastuzumab, the first generic from the collaboration, is expected to be launched in India as early as 2014. Likewise, Intas Biopharmaceuticals is running early phase clinical studies of GCSF (Neukine) jointly with Kwizda Pharma of Austria.
In a reversal of sorts, Pfizer Inc called off a $350 million agreement with India’s leading biotherapeutics major Biocon to source and distribute insulins across the world in March which it entered at the end of 2010.
Though far and few in numbers, CMOs in India have demonstrated their unquestionable skills in duplicating most of the first-gen biologics and a few monoclonals. India finally came out with the long-awaited regulatory pathway for generic biologics in June after lengthy deliberations with various stakeholders. The new guidelines, which emphasize the safety aspect of biosimilars, are expected to provide a level playing field for local and multi-national companies. But the question of whether Indian generic champs can repeat the magic in biosimilars remains unanswered.
S. Harachand is a pharmaceutical journalist based in Mumbai. He can be reached at harachand@gmail.com.
