The closer we get to biosimilars, the further away they seem to get. The FDA issued its draft guidance on biosimilar product development in February 2012, and has received more than a dozen filings from companies looking to enter the field, but those are being reviewed on a case-by-case basis, and the horizon is cloudy.

Biosimilar development programs have been in flux, with partnerships dissolving in the span of months while new ones spring up. Merck swung both ways when it cancelled a biosimilar partnership with Hanwha in December 2012 (they were trying to develop a biosimlar of Enbrel, until that drug received a patent extension all the way out to 2028), then formed a collaboration with Samsung Bioepis, the joint venture between Samsung Biologics and Biogen Idec in February 2013 (no word on what biosimilars they’re cooking up).

While major players look to partner up and enter the biosimilars market, innovator biopharma companies — some with their own biosimilar collaborations — have been lobbying to hamstring the new drugs’ adoption (when the FDA gets around to approving them, that is).

In March 2013, Virginia became the first state to pass a law to hinder interchangeability or substitution of a biosimilar for an innovator’s biologic treatment. The VA law does allow for substitution if the product has been deemed interchangeable by the FDA, unless the doctor or patient insist on the innovator biologic, but also “requires any pharmacist who dispenses an interchangeable biosimilar to inform the patient prior to dispensing the biosimilar and record the brand name or the product name and name of the manufacturer of the biosimilar on the record of dispensing and the prescription label.” Other states are considering similar laws, which the Generic Pharmaceutical Association (GPhA) considers “burdensome ‘red tape’ that threatens the positive impact biosimilars will have.”

Niall Dinwoodie, head, Product Characterization at Charles River Laboratories, was realistic about the timelines and prospects for biosimilars, telling us, “It will remain challenging to develop a biosimilar until there is clarity around the definition of ‘interchangeability.’ Based on the current biosimliar environment, I would anticipate at least five years for the first products to be registered through the FDA’s process; that will provide the originators ample time to develop pricing strategies to limit a biosimilar’s ability to gain market share.”

We asked several contract service providers about the opportunities they see in the biosimilars field. Mr. Dinwoodie told us that biosimilars have exposed CRL to a new client base: “Biosimilars represent the opportunity for Charles River to work with new organizations, including those lacking experience with biological molecules and those looking to reduce development costs from the originator model. The study designs, particularly for preclinical immunological assessment, provide for high value testing compared to the more traditional toxicology studies associated with small molecule development.”

He added that CRL has focused on demonstrating its experience and expertise in the study design area. “Biosimilar development programs require an in-depth determination of the physico-chemical and immunological properties of the candidate molecule in comparison to the originator product. These studies require sophisticated approaches and a high degree of interpretation capabilities, which are honed through experience. We have extensive experience working with biological products across the globe. We can manage and interpret the required preclinical programs and offer clients regulatory guidance.”

Dirk Reitsma, M.D., vice president and Therapeutic Area Head, Oncology, at PPD, Inc., commented, “PPD made an early entry into biosimilars, and we provide a full range of laboratory and development services to support biosimilar drug development. As a result, we’ve gained a great deal of experience in biosimilar product development that we can share with our clients. We focus on country-specific regulatory issues that have been evolving over the past couple of years. We also give a lot of attention to the advantages the biosimilar setting offers to design more efficient clinical trials. For smaller pharma and biotechs in particular, we serve as a consultative resource for clients who don’t have full clinical or regulatory staffs because the small molecular generics they typically handle have relatively straightforward pathways that require smaller staffs.”

Dr. Reitsma added, “As recently as a few years ago, the biosimilars market was characterized mainly by large companies, but more recently we’ve seen a significant increase in the very small companies that have entered the picture to take biosimilars to market as soon as possible. The current market covers a broad spectrum of pharma companies from a size and development segment perspective. Players in this market have ranged from the big pharma/innovators to the companies traditionally focused on developing small molecule generic products. Other players in the market include smaller start-up/biotech and mid-level pharma companies, as well as companies primarily focused on the manufacturing side of the business. From a geographic standpoint, companies from across the globe are significant players in this market and range from the large multinational to the smaller regional companies.”

Mr. Dinwoodie at CRL echoed those sentiments, remarking, “We are working with startups, originators developing a biosimilar program and generic manufacturers moving into biological products all from a variety of geographical locations.”

Comprehensive service offerings seem to be a significant draw for these providers and their clients. Victor A. Vinci, Ph.D., chief scientific officer and vice president at Cook Pharmica, told us that this holds up from the CMO side, too. “It’s well understood that the rapid pace of biosimilar business is driven by the intensive early investments in cell line generation and a full complement of traditional and enhanced analytical methodologies. The transition from a cell line, sometimes chosen before all scale-up and analytical capabilities are fully optimized, places significant demand on a CMO’s ability to support a client’s clinical timelines. However, a CMO with experienced process development and flexible manufacturing capabilities can dramatically assist smaller biosimilar companies. The ability to rapidly conduct small bioreactor process and media optimization and then dramatically reduce lead times for media raw materials requires expanded flexibility by a CMO and tests its supply chain and quality systems. In our case, a collaborative relationship with a client led to the arrangement of large-scale production slots being coordinated based on which of three candidate programs had achieved key milestones,” he commented.

Dr. Vinca added, “On the drug product side of the biosimilar challenge, reverse-engineering of the innovator drug product is a challenge less discussed publicly. If a biosimilar company is able to develop the correct drug substance quality attributes, there still await challenges that a CMO can help address. These include formulation development, if the innovator’s IP blocks the original formulation, understanding potential compatibility issues, and the supply chain challenge of utilizing smaller quantities of line components to reduce spend in early phase work. IP, regulatory and marketing strategies will also impact the decision of whether to directly match the innovator vials or device.”

While smaller or less experienced clients are helping fuel a “biosimilars boom” for both CMOs and CROs, those clients may not turn out to be the winners in this race. In addition to those regulatory hurdles presented by state requirements and shifting patents for major products like Enbrel, companies are learning just how much more complex biosimilars are than the small molecule generic model.

Gilles Cottier, president of SAFC, cited the recent safety-based recall of Omontys, an anemia treatment commercialized by Affymax and Takeda, as a sign that biosimilars might not be a market for small companies to break into. Omontys isn’t strictly a biosimilar, but as a functional PEGylated analog of erythropoietin, it was a chemical workaround for Epogen, Amgen’s long-marketed biologic. When it was approved in March 2012, it was hailed as a liberator for dialysis patients who previously could only be treated with Epogen. A year later, it was withdrawn after 19 reports of anaphylaxis at dialysis centers, including three deaths.

Said Mr. Cottier, “We knew all along that biosimilars are more difficult and more costly — by at least a factor of 10 — to develop than small molecule generics. Also, we knew that they were far more complex to manufacture than those small molecule generics. The recent episode with Omontys shows us that it may be even more difficult to develop biosimilars that are truly interchangeable with innovator biologics.”

Mr. Cottier believes that new entrants in the space may face more technical difficulties than they expected. “Perhaps the ones who are going to benefit are the large pharma and biopharma players that have decided to enter into the biosmilars space. They may have a better chance to get their biosimilars manufactured and approved because they have deep experience in manufacturing and filing these very complex products.”

He added that SAFC is essentially agnostic, in terms of providing services and supplies to companies across the spectrum. “That said,” he noted, “as a partner of choice for these existing, large players on the innovator side, we can be very well positioned to continue to help them continue their expansion from innovative into biosimilar products. The whole issue with biosimilars is that change is not a welcome event. So we want to offer continuity and help them avoid unnecessary change.”

Biologics worth billions in annual revenues will lose patent protection in the next several years, so the stakes are immense for both innovators and entrants in the biosimilars sweepstakes. Contract service providers across the spectrum stand to benefit, especially as less experienced firms try to stake their claim in this field. The true payoff is years away, and the winners may not be who we expect, but as long as there are no Omontys-like failures, the public should benefit from competition in the biologics market.