As Richard Ridinger, the Chief Executive Officer of Lonza mulls his chances of reviewing its investment with Israel-based Teva group, one thing is clear, development of biosimilars is no longer a low risk, high reward game, instead it is for those who have the heart to take risks, because that will determine the reward. In this case, a market with promising returns for those who are in for the long haul.
The global biosimilar market stood at $2 billion in 2012 and is expected to reach $2.7 billion by 2013, with a projected $19.4 billion by 2018, exhibiting a CAGR of 36.6 per cent over 2009-2018, informs Mahadevan Narayanamoni, Partner and National Leader, Healthcare and Life-sciences Advisory, Grant Thornton India LLP. Rising healthcare costs, drugs worth $60 billion going off patent and slow pace of development of generics are some of the factors that have fuelled this surge.
The market
India, which ranks third-largest in the Asia-Pacific region, after Australia and China has more than 30 biosimilar companies like Dr Reddy’s Laboratories, Wockhardt, Lupin, Cipla, Reliance Life sciences, Avesthagen, Biocon, and Zydus Cadilla with products in their pipeline under various stages of development. Insulin accounts for a big chunk of the market followed by erythropoietin and GCSF. Interferon alpha, thrombolytics, plasma proteins, vaccines, and others form the rest. Europe commands 80 per cent of the market share with 13 approved biosimilar products (as opposed to none in the US). Human growth hormones (hGHs), erythropoiesis-stimulating agents (ESAs), and granulocyte colony-stimulating factors (G-CSFs) were the three main product classes driving sales in 2012. Biosimilar ESAs are expected to dominate half of the market in 2013 despite the expected launch of the first biosimilar filgrastim in Japan in Q2 2013, according to Andrew Merron, Director of the Biosimilars Advisory Service at Decision Resources Group.
 “Many of the countries outside the G7 segment have embraced non-innovator versions of biologics over the last 10 years”Andrew Merron Director of the Biosimilars Advisory Service, Decision Resources Group |
There will be no biosimilars available in new classes of biologics during this time, but this is slated to pick up pace towards 2015, such that by 2020, biosimilars will be able to garner 30 per cent of the share of biologics, he adds. This might be the year, by when biosimilar versions of major biologic blockbuster drugs appear on the horizon (Rituxan, Herceptin, Avastin, Enbrel, and Humira). India, is confident of capturing 20-25 per cent of the market share globally in the next five years growing at a CAGR of 30 per cent as per PM Murali, President, Association of Biotechnology Led Enterprises (ABLE). The Indian market boasts of sales worth $380 million in 2012 with a projected figure of $680 million for 2015.
Out of 40 biologicals marketed in India, 25 are biosimilars. The upcoming oncology market is one of the prime targeted areas for many companies. Dr Reddy’s Reditux, a biosimilar monoclonal antibody registered as a copy version of Roche’s Mabthera/Rituxan and sold at less than 50 per cent of the innovator drug has demonstrated how biosimilars can improve access to expensive biologics in developing countries. So much so, that the parent company tied up with Emcure to grab a piece of the growing market. As Dr Reddy’s plans to enter global markets and expand its presence, it would need comparability data with the original brand with the barriers getting higher given the uncertain regulatory environment in the US and the stringent standards in Europe, the two biggest markets. Figuring out its way will help pave the way for others in the fray.
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Market Attributes
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Two steps forward, one step back
However, the changing regulatory landscape especially in the US, means that companies need to navigate through choppy waters. This has led them into rethinking their strategies, revising business models and launching spin offs in order to tackle the rising challenge. So even as Rituxan, one of the first biologics faces patent expiry this year in Europe, efforts to develop a biosimilar of the same have been met with hurdles with both Teva and Samsung halting their clinical trials late last year. While Novartis’ generic arm Sandoz, Boehringer Ingelheim, Stada Arzneimittel and Gedeon Richter, are reportedly working on biosimilar versions of the drug, they refuse to indicate the timeline by which it would be in the market. In fact, Sandoz’s Global Head, Jeff George even went on to say last month that the introduction of Sandoz’s product may be delayed until 2016.
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It is not difficult to comprehend why. Even though biosimilar development costs less than their biologic counterparts, it is higher than what was estimated earlier, ranging from $75 million to $375 million per molecule. Not only this, slight changes to a biologic drug can change its properties entirely. Unlike conventional generic medicines, biosimilars are not the same as the drugs they seek to substitute. Hence, two biologics made using different cell lines and differing manufacturing processes will rarely, if ever, be exactly the same. Hence manufacturing challenges will also be different, depending on whether a firm is an innovating biologics firm, switching to biosimilars, or a traditional generics manufacturer, entering into biologics production for the first time.
 “For Indian biosimilar growth story to sustain itself, it has to cross five bridges, all of them equally important. They are: affordability, assets, approvability, acceptability, and availability”Dr P M Murali President, Association of Biotechnology Led Enterprises |
“Innovative firms would need to develop strategies to transform expensive development and manufacturing processes into lean analogs reducing the cost per unit dose and make the same amount of drug with fewer batches through higher fermentation titres, higher purification recoveries, and longer shelf-life formulations. The expertise to reverse-engineer the biologic, develop a stable, therapeutically active cell line along with manufacturing processes that meet specifications, predictably and consistently while applying specialised analytical tools would be required,” adds Murali.
Given the unpredictability of the enterprise and the hurdles therein, it is not surprising then that analysts are coming to believe that only those companies that are willing to absorb the costs and risks of development, registration and commercialisation will emerge as competitors. Result: the battleground seems to be heating up with biotech giants copying each other drugs rather than opening them to competition from less established firms. The latest to enter the bandwagon is Amgen, which has recently announced its plans to enter the space and launch six biosimilars beginning 2017. AstraZeneca is also pontificating its strategy. Which brings us to how can India make its presence felt amidst all the chaos.
Addressing the concerns
 “Selection of the molecule, would be the most important factor with the cost of development being high as compared to a generic, followed by building the right infrastructure and processes”Mahadevan Narayanamoni Partner & National Leader,Healthcare and Life-sciences Advisory, Grant Thornton India LLP |
“Many of the countries outside the G7 segment have embraced non-innovator versions of biologics over the last 10 years, but the majority of these biologics cannot be considered true biosimilars owing to the absence of a biosimilars regulatory pathway and/ or robust demonstration of comparable quality, safety and efficacy compared to a specified reference brand,” pitches in Merron. However, the emergence of biosimilar guidelines late last year by Indian Department of Biotechnology, along with the drug regulator outlined specific requirements for pre-marketing and post-marketing data, apart from guidelines for pre-clinical and clinical trials for biosimilars. The move is aimed at upgrading and maintaining the quality of Indian biosimilar products, although it is strongly felt that there should be a independent regulatory pathway for biosimilars with the DCGI currently looking after both generics and biologics. Else, doubts about the quality of Indian biosimilars may persist.
Licensing agreements and alliances would be the key to gaining access to regulated markets and riding the obstacles. “Selection of the molecule, would be the most important factor with the cost of development being high as compared to a generic, followed by building the right infrastructure and processes, access to market and funding, when it comes to a forging an alliance,” reiterates Narayanmoni. Even after the demonstration of biosimilarity, companies need to work on the quality of the product, price, positioning, perceived trust, and adoption of targeted marketing campaigns, adds Merron. With the patent expiry of products like Herceptin, Humira and Rituxan, mAbs (monoclonal antibodies) are in the pipeline for many Indian players.
Meanwhile Indian companies are on the move. Dr Reddy’s Laboratories has already launched a few of its significant biosimilars in emerging markets with a portfolio of filgrastim, peg-filgrastim, rituximab and darbepeotin alfa, which have commercial presence in 13 emerging countries. Cipla has also acquired facilities in India and China to develop biosimilars. Wockhardt is among the early entrants and has developed insulin and analogue, Lupin is now on its way and plans to soon launch its first of two biosimilar drugs for oncology in India by the end of this year. The company currently has a total of 10 proteins in different stages of development. Avesthagen and Reliance Lifesciences are also strong contenders.
But it remains to be seen if they will be able to rough it out in the more regulated markets even as they are charting out their strategy in emerging markets. Finally Murali offers words of advice the for the Indian industry. “For Indian biosimilar growth story to sustain itself, it has to cross five bridges, all of them equally important. They are: affordability, assets, approvability, acceptability, and availability. The ability to safely cross over this span will determine the level of success we are likely to see in the Indian biosimilar industry,” he concludes.
