Contract manufacturing organizations (CMOs) are investing zealously to expand biomanufacturing capabilities as biosimilar uptake gains steam all over the world.

According to a recent report by Research and Markets, the follow-on biologics market is projected to grow at a compound annual growth rate (CAGR) of 45.22% annually. A constrained payer environment and patent expiration of several blockbuster biologics are cited as the key drivers.

Government support for biosimilars is increasing in all the leading as well as emerging markets, given the cost-saving opportunities that these products represent for national healthcare budgets.

If indications are clear, global health economics is tilting the focus to biosimilars as the need for these cost-effective drugs by governments and patients becomes more compelling.
Biomanufacturers look even more confident to improve the quality of their earnings, expecting a strong growth momentum delivered by biosimilars in the next few years. They also believe that the pretty high margins derived from the biosimilars business can be sustained, at least for the near-term, because there is no competitive pressure.

Large-scale erosion of prices, resulting from the flood of copycats, is unlikely for the biosimilars business in the near future even though the knock-offs seem to follow the same trajectory that generics went through during the earlier stages of their introduction.

One of the reasons for less crowding in the biosimilars marketplace is financial. Establishing biomanufacturing facilities requires huge investments compared to generic drug making factories. The production of biologics also warrants higher skillsets. Their complex development process involves longer timelines as biosimilars are required to demonstrate their non-inferiority with the innovator molecule through Phase III data.

All things added up, quick entry into the biosimilars market is more or less impractical. These constraints for new entrants give enough leeway for the early birds to cash in on the time lag.

Biocon, which has already launched biosimilars in the U.S. and EU markets through its partner Mylan, is entering a very strong growth phase based on its biologics business. Biocon-Mylan secured their second biosimilar approval from the FDA for pegfilgrastim in June 2018, six months after obtaining clearance for a version of trastuzumab. The Bangalore, India-based biomanufacturer and its U.S. partner are confident of rich dividends from biosimilars, finding the markets more energized than expected. Higher uptake would lead some of these biosimilars to grab a 70% share in the leading markets over the next three years.

Biocon recently re-emphasized their earnings forecast from biosimilars close to their $200 million target, looking at the trend from the last few quarters. Integrated capabilities, which enables the company to take the product right from the lab to the market, is what Biocon says differentiates it from its competitors.

Through continuous R&D, Biocon aims to develop a faster and more predictable manufacturing process to make biosimilars. The Indian biotherapeutics major plans to re-invest the profits accrued from biosimilars back into the business to gain a competitive R&D edge.

Syngene, the manufacturing and research services subsidiary of Biocon, announced a $102 million program to build new infrastructure and capabilities in biologics manufacturing and clinical development. The new set up has three single-use bioreactors, each with the capacity of 2,000 liters and upstream and downstream suits. The Bangalore-basedcontract services firm also boosted its clinical development arm with the addition of the 76-bed human pharmacology unit. Setting its sight on biologics as a long-term strategic growth driver, the firm recently established Syngene USA to better facilitate U.S. clients.

Syngene estimates that by 2020, these products will account for close to 30% of the total pharma market revenue globally and nearly half of the research pipeline.

Currently, a total of 492 biosimilar products are in development. Of which, 232 are in the preclinical stage. Biosimilars in phase III and pre-registration stage account for 24% of the overall pipeline, with 120 products.

The global biosimilar pipeline is dominated by companies from emerging markets. The most active companies in the early-stage pipeline are from India and China, says the Research and Markets report.

Last November Strides Pharma Science announced a $15 million investment in Stelis Biopharma, an integrated biopharmaceuticals company with manufacturing capabilities from biologic drug substance to aseptic fill-finish in various injectable formats, located in Bangalore. Strides owns 36.5% stakes in Stelis.

The drug product block of Stelis’ newly built biomanufacturing facility is expected to start production and contract services by the end of 1Q20. Stelis intends to launch its biosimilar this year.