Getting unfolded a global opportunity for India with Biosimilar Drugs

Over a period of time, the trend of a disease treatment process is becoming more targeted and personalized to improve effectiveness of both diagnosis and treatment. Biotechnology being the key driver to this trend, India should not fall out of line from this direction.

There are two clear opportunities for India in this fast evolving arena. One is to get more engaged in the discovery research of new large molecular entity and the other is to make a successful foray in the fast emerging and relatively high value biosimilar drugs (generic versions of biotechnology medicines) markets of the world.

In my view, India has greater probability of success in the field of biosimilar drugs, which could catapult India as a major force to reckon with in the fast growing biotechnology space of the global pharmaceutical industry.

An interesting global collaboration:

On October 19, 2010, the home grown Biotech Company Biocon with its headquarter in the Information Technology (IT) heartland of India – Bangalore created a stir in the Industry by inking an interesting international business deal with the largest global pharmaceutical company – Pfizer.

With this deal of US $350 million Biocon initiated its foray into the global biosimilar market by enabling Pfizer to globally commercialize Biocon’s biosimilar human recombinant insulin and three insulin analogues.

Before this deal, Sanofi-Pasteur, the’ vaccine business unit’ of the global major Sanofi of France had acquired Shantha Biotechnics, located in Hyderabad for a consideration of US$ 602 million, in July 2009.

Global players signal a new aspiration:

Just a year before the above acquisition in India, on December 11, 2008, Reuters reported that just two days after Merck announced a major push into biosimilar medicines, Eli Lilly signaled similar aspirations. This report, at that time, raised many eyebrows in the global pharmaceutical industry, as it was in the midst of a raging scientific debate on the appropriate regulatory pathways for biosimilar drugs globally.

Be that as it may, many felt that this announcement ushered in the beginning of a new era in the pharmaceutical sector of the world, not just for the pharmaceutical players, but also for the patients with the availability of affordable lower priced biologic medicines.

The scenario is heating up with regulatory hurdles relatively easing off:

Within the developed world, European Union (EU) had taken a lead towards this direction by putting a robust system in place, way back in 2003. In the US, along with the recent healthcare reform process of the Obama administration, the regulatory pathway for biosimilar drugs is now being charted out by the US FDA. However, as of November 2011, they do not seem to have finalized the details of the process.

It is worth mentioning that during the same reform process a 12 year data exclusivity period has been granted for biosimilar drugs, against the 5-year period of the same granted to the innovators of small molecule chemical drugs.

In the recent past, the EU has approved Sandoz’s (Novartis) Filgrastim (Neupogen brand of Amgen), which is prescribed for the treatment of Neutropenia. With Filgrastim, Sandoz will now have 3 biosimilar products in its portfolio.

The trigger factor:

Globally, the scenario for biosimilar drugs started heating up when Merck announced that the company expects to have at least 5 biosimilars in the late stage development by 2012. The announcement of both Merck and Eli Lilly surprised many, as the largest pharmaceutical market of the world – the USA, at that time, was yet to approve the regulatory pathway for biosimilar medicines.

What then are the trigger factors for the research based global pharmaceutical companies like Pfizer, Sanofi, Merck and Eli Lilly to step into the arena of biosimilar medicines? Is it gradual drying up research pipeline together with skyrocketing costs of global R&D initiatives, cost containment pressures from the payers or relatively strong market entry barrier for smaller players? I reckon, all of these.

Low penetration of lower cost biosimilar drugs:

Although at present over 150 different biologic medicines are available globally, just around 11 countries have access to low cost biosimilar drugs, India being one of them. Supporters of biosimilar medicines are indeed swelling as time passes by.

It has been widely reported that the cost of treatment with innovative and patented biologic drugs can vary from US$ 100,000 to US$ 300,000 a year. A 2010 review on biosimilar drugs published by the Duke University highlights that biosimilar equivalent of such biologics could not only reduce the cost of treatment,  but would also improve access to such drugs significantly for the patients across the globe. (Source: Chow, S. and Liu, J. 2010, Statistical assessment of biosimilar products, Journal of Biopharmaceutical Statistics 20.1:10-30)

At present, the key global players are Sandoz (Novartis), Teva, BioPartners, BioGenerix (Ratiopharm) and Bioceuticals (Stada). With the entry of pharmaceutical majors like, Pfizer, Sanofi, Merck and Eli Lilly, the global biosimilar market is expected to heat up and develop at a much faster pace than ever before. Removal of regulatory hurdles (ban) for the marketing approval of such drugs in the US , as mentioned above, will be the key growth driver.

Biosimilar Monoclonal Antibodies (mAbs) in the Pipeline:

Company

Location

Biosimilar mAbs

Development Status

BioXpress

Switzerland

16

Preclinical

Gene Techno Science

Japan

6

Preclinical

Zydus Cadilla

India

5

Preclinical

PlantForm

Canada

3

Preclinical

BioCad

Russia

3

Preclinical

Celltrion

South Korea

2

Phase 3

LG Life Sciences

South Korea

2

Preclinical

Gedeon Richter

Hungary

2

Preclinical

Cerbios-Pharma

Switzerland

1

Preclinical

Hanwha Chemical

South Korea

1

Preclinical

PharmaPraxis

Brazil

1

Preclinical

Probiomed

Mexico

1

Phase 3

Samsung BioLogics

South Korea

1

Preclinical

Novartis

Switzerland

1

Phase 2

Teva

Israel

1

Phase 2

Zenotech

India

1

Phase 3

Spectrum

US

1

Preclinical

Biocon/Mylan

India/US

1

Preclinical

(Source: PharmaShare; as of September 10, 2011 from Citeline’s Pipeline database)

Global Market Potential:

According to a study (2011) conducted by Global Industry Analysts Inc., worldwide market for biosimilar drugs is estimated to reach US$ 4.8 billion by the year 2015, the key growth drivers being as follows:

  • Patent expiries of blockbuster biologic drugs
  • Cost containment measures of various governments
  • Aging population
  • Supporting legislation in increasing number of countries
  • Recent establishment of regulatory guidelines for biosimilars in the US

On the other hand, according to Alan Shepard, principal of Thought Leadership, Global Generics at IMS Health: ‘Forecasting biosimilar sales is complex because of various factors including the imprecise classification of a biosimilar and pricing policies of the originator resulting in the use of the brand in place of the biosimilar. Some estimates show the market growing from US$ 66 million in 2008 to US$ 2.3 billion in 2015. Others see sales exceeding US$ 5.6 billion in 2013. Whatever the forecast, there remains a US$ 50 billion potential for biosimilars’.

Currently, off-patent biologic blockbusters including Erythropoietin offer an excellent commercial opportunity in this category. By 2013, about 10 more patented biologics with a total turnover of around U.S. $ 15 billion will go off-patent, throwing open even greater opportunity for the growth of biosimilar drugs globally.

The scenario and business potential in India:

The size of biotech industry in India is estimated to be around US$ 4 billion by 2015 with a scorching pace of growth driven by both local and global demands (E&Y Report 2011). The biosimilar drugs market in India is expected to reach US$ 2 billion in 2014 (source: Evalueserve, April 2010).

Recombinant vaccines, erythropoietin, recombinant insulin, monoclonal antibody, interferon alpha, granulocyte cell stimulating factor like products are now being manufactured by a number of domestic biotech companies like Biocon, Panacea Biotech, Wockhardt, Emcure, Bharat Biotech, Serum Institute of India, Dr. Reddy’s Laboratories (DRL) etc.

The ultimate objective of all these Indian companies will be to get regulatory approval of their respective biosimilar products in the US and the EU either on their own or through collaborative initiatives.

Indian players are making rapid strides:

Biosimilar version of Rituxan (Rituximab) of Roche used in the treatment of Non-Hodgkin’s lymphoma has already been developed by DRL in India. Last year Rituxan clocked a turnover of over US$ 2 billion. DRL also has developed Filgastrim of Amgen, which enhances production of white blood-cell by the body and markets the product as Grafeel in India. Similarly Ranbaxy has collaborated with Zenotech Laboratories to manufacture G-CSF.

On the other hand Glenmark reportedly is planning to come out with its first biotech product by 2011 from its biological research establishment located in Switzerland.

Indian pharmaceutical major Cipla reportedly has invested Rs 300 crore in 2010 to acquire stakes of MabPharm in India and BioMab  in China and is planning to launch a biosimilar drug in the field of oncology  by end 2012.

In June this year another large pharmaceutical company of India, Lupin  signed a deal with a private specialty life science company NeuClone Pty Ltd of Sydney, Australia for their cell-line technology. Lupin reportedly will use this technology for developing biosimilar drugs  in the field of oncology, the first one of which is expected to be launched in India again by 2012.

Oncology is becoming the research hot-spot:

As indicated above, many domestic Indian pharmaceutical companies are targeting Oncology disease area for developing biosimilar drugs, which is estimated to be the largest segment globally with a value turnover of over US$ 55 billion by the end of this year growing over 17%.

As per recent reports, about 8 million deaths take place all over the world per year due to cancer. May be for this reason the research pipeline of NMEs is dominated by oncology. With the R&D focus of the deep-pocket global pharmaceutical majors’ on this particular therapy area, the trend will continue to go north.

About 50 NMEs for the treatment of cancer are expected to be launched globally by 2015.

Current market size of Oncology drugs in India is estimated to be around Rs.1,300 Crore (US$ 260 million) and is expected to double by 2014.

Greater potential for global collaborative initiatives:

It is envisaged that the recent Pfizer – Biocon deal will trigger many other collaborative initiatives between the global and the local pharmaceutical companies.

Among Indian biotech companies, Reliance Life Sciences has already marketed Recombinant Erythropoietin, Recombinant Granulocyte Colony Stimulating Factor, Recombinant Interferon Alpha and Recombinant tissue plasminogen activator and  has been reported to have the richest pipeline of biosimilar drugs in India.

Companies like Wockhardt, Lupin, DRL and Intas Biopharmaceuticals are also in the process of developing an interesting portfolio of biosimilar drugs to fully encash the fast growing global opportunities.

‘Patent Cliff’ is hastening the process:

Many large research-based global pharmaceutical companies, after having encountered the ‘patent cliff’, are now looking at the small molecule generic and large molecule biosimilar businesses, in a mega scale, especially in the emerging markets of the world like India.

The country has witnessed major acquisitions like, Ranbaxy, Shantha Biotechnics and Piramal Healthcare by Daiichi Sankyo of Japan, Sanofi of France and Abbott of USA, respectively. We have also seen collaborative initiatives of large global companies like, GSK, AstraZeneca, and Pfizer with Indian companies like DRL, Aurobindo, Claris, Torrent, Zydus Cadila, Strides Arcolab, Sun Pharma and now Biocon to reach out to the fast growing global generic and biosimilar drugs markets.

This trend further gained momentum when immediately after Biocon deal, Pfizer strengthened its footprints in the global generics market with yet another acquisition of 40% stake in Laboratorio Teuto Brasileiro of Brazil with US$ 240 million to develop and globally commercialize their generic portfolio.

Emergence of ‘second generation’ biosimilar drugs and higher market entry barrier:

Emergence of second generation branded biosimilar products such as PEGylated products Pegasys and PegIntron (peginterferon alpha) and Neulasta (pegfilgrastim), and insulin analogs have the potential to reduce the market size for first generation biosimilar drugs creating significant entry barrier.

The barriers to market entry for biosimilar drugs are, by and large, much higher than any small molecule generic drugs. In various markets within EU, many companies face the challenge of higher development costs for biosimilar drugs due to stringent regulatory requirements and greater lead time for product development.

Navigating through such tough regulatory environment will demand a different type of skill sets from the generic companies not only in areas of clinical trials and pharmacovigilance, but also in manufacturing and marketing. Consequently, the investment needed to take biosimilar drugs from clinical trials to launch in the developed markets will indeed be quite significant.

Government support in India:

To give a fillip to the Biotech Industry in India the National Biotechnology Board was set up by the Government under the Ministry of Science and Technology way back in 1982. The Department of Biotechnology (DBT) came into existence in 1986. The DBT now spends around US$ 200 million annually to develop biotech resources in the country and have been making reasonably good progress.

The DBT together with the Drug Controller General of India (DCGI) has now prepared regulatory guidelines for biosimilar Drugs, which are expected to conform to international quality and patients’ safety standards.

Currently, a number both financial and non-financial incentives have been announced by the Central and the State Governments to encourage growth of the biotech industry in India, which include tax incentives, exemption from VAT and other fees, grants for biotech start-ups, financial assistance with patents, subsidies on investment from land to utilities and infrastructural support with the development of ten biotech parks through ‘Biotechnology Parks Society of India’.

However, many industry experts feel that R&D funding for the Biotech sector in the country is grossly inadequate. Currently, there being only a few ‘Venture Capital’ funds for this sector and ‘Angel Investments’ almost being non-existent, Indian biotech companies are, by and large, dependent on Government funding.

Conclusion:

Recent international deal of Pfizer and Biocon to globally commercialize Biocon’s four biosimilar insulin and analogues developed in India, does signal a new global status for the Indian biosimilar drugs to the international pharma majors, who were vocal critics of such drugs developed in India, until recently.

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Leave a Reply

You must be logged in to post a comment.