A Common Sense Approach To Sustainability In The Biosimilar Business

By Ashok Kumar, President, Centre for Research & Development, IPCA

This article was created from the author's presentation at the 2018 Bioprocessing Asia conference, with Cytiva as principal sponsor. The BioProcessing Asia Conference series was created to provide a platform to advance the contribution of bioprocessing sciences towards the development and manufacture of affordable biopharmaceutical products in Asia.

The global biologic drug market, valued at $200 billion and expected to reach $300 billion by 2020, is becoming a key part of patient treatment.¹ Fueling this growth is a steady stream of new drug approvals in recent years for targeted therapies tackling important unmet biological needs. There is also growing adoption of personalized medicines, where scientific advances allow doctors to customize treatments based on refined diagnostic testing and individual patient characteristics.

This dynamic market stands to change dramatically over the next few years, as a group of biologic drugs with combined sales of over $100 billion will face patent expiration, paving the way for an explosion of the biosimilar industry.² Biosimilars are close to but not entirely identical to the generic, off-patent versions of small molecule medicines common in the pharmaceutical market. They offer commercial opportunities for traditional generics companies that are challenged by a very competitive and price-sensitive market; yet, they also appeal to traditional biologics manufacturers that can leverage their existing infrastructures and expertise in the production of these complex medicines.

As companies begin to explore new markets, they apply not just creative thinking to discovery and development but also common sense. This tried-and-true approach to business also applies to biosimilars. By doing so, the industry can discover ways to sustain not just the success of a product but also the long-term life of the biosimilar industry.

Biosimilar Approvals And Commercial Success Exhibit Market Promise

As biosimilars are marketed competitively at a lower price point, they will become an increasingly large part of the market, with forecasts of sales up to $21 billion by 2022.³ Price competitiveness may be especially important in emerging markets, as they are a major opportunity for pharma companies (often generics businesses) already located in those markets. India, which is expected to have sales of $1 billion in biosimilars by 2020,⁴ is an example of a market where growing middle-class income and cost-effective biosimilars are likely to have a positive effect. Currently 57 Indian companies work in this area, both for domestic and global supply.⁵  

As more biosimilars hit the market, their ability to provide unmet therapy needs at a more affordable rate is having much success in various areas of the world. For example, one of the 45 biosimilars approved in the EU in the last decade, Infliximab, is already being used to treat 80 percent of patients suffering from inflammatory diseases in the EU.⁶

The possibilities in the biosimilars market become even more encouraging when considering the rise in regulatory approvals over the last 10 years. The U.S. has made significant strides with a total of 19 biosimilars approved since its first approval in 2015.⁷ In India, the Drug Controller General of India has already approved 70 biosimilars.⁸ These numbers and the progress these therapies have made since their introduction are creating a growing interest among manufacturers, especially while the generic small molecule business is reeling under price pressure. While there have been doubts of biosimilars’ potential in the past due to the complexities of manufacturing and regulatory approvals, the growing number of approved biosimilars and the commercial success of the first biosimilar antibodies are driving confidence across all of the world’s major markets. However, this market comes with unique challenges not observed in the small molecule generic market.

An Opportunity For Growth—But Don’t Assume This Will Be Easy

While the trends look positive for the biosimilar market, there are some important cautions for anyone getting involved in it, particularly if they assume biosimilars are as straightforward to develop as small molecule generics. Biosimilars require 8 to 10 years to develop and cost $100 million to $200 million, compared to small molecule generics, which cost between $2 million to $5 million and take only 3 to 5 years to bring to market.⁹ This reflects the increased complexity of biosimilar manufacturing and testing as well as their regulatory barriers. There is also significant commercial risk from the complexity of the intellectual property (IP) surrounding some of the originator molecules and the way this is negotiated between biosimilar providers and originators. An example is the agreement that the Humira biosimilar cannot reach the U.S. market until five years after the same molecule is launched in Europe.

With intense competition and global complexity, commercial planning is as great a factor for success as technical expertise is in developing the molecule. The transition from being a small molecule generic provider to a biosimilar one is not straightforward, with radically different skillsets and capabilities required. Being first to market may not guarantee success if subsequent entrants have better technological execution or cheaper products, and there is little in the way of IP protection to prevent challenges. It is also likely to be a long-term investment requiring persistence and ongoing funding until the product starts generating profits on the investments.

In addition, in contrast to the small molecule generics, there is debate and concern about the process of acquiring interchangeability status from regulatory authorities for switching a patient from an originator molecule to a biosimilar without the intervention of the health care provider who prescribed the reference product. This may require significant extra efforts and investment, such as extra clinical trials; however, if achieved, can give such biosimilars a huge competitive advantage. Finally, the complexity of biosimilars may result in a patient/doctor preference for products from innovators or global pharma/biotech companies.

Finally, there are factors that distort the biosimilar landscape. For example, tendering processes may mean only one biosimilar is available in a particular market, locking out others. There may also be both positive and negative incentives for physicians, depending on how they are reimbursed. Some initial assumptions about the nature of the market, such as the idea that biosimilars will only be 20 to 30 percent cheaper than originators, are being challenged with aggressive discounting from both originator and biosimilar providers.¹⁰ Considering these barriers, any company targeting biosimilar development must figure out a way to stand out in what is becoming an increasingly crowded field of competitors.

How Can Biosimilar Providers Be Competitive?

More than 310 companies of all sizes are currently active in the global biosimilar market, with South Korea able to deliver 40 percent of today’s market by sales.¹¹ Companies working on biosimilars are essentially competing to produce the same, relatively small range of molecules. For example, there are more than 40 Humira biosimilars in development around the world; also, in addition to the two approved Rituximab biosimilars in Europe, another 25 are in development.¹² In this febrile atmosphere of competition, it is important to consider how a sustainable biosimilar industry develops for the benefit of all stakeholders, including patients, doctors, investors, and governments as well as the insurance companies that pay the final bill. How does a biosimilar manufacturer create competitive and beneficial differentiation?

The minimum standards for developing a biologic, which are to create high-quality products and robust processes to deliver them, are non-negotiable in a pharmaceutical environment and essential to establishing a place in the market as a trusted supplier. Every drug must have a consistent biological dose effect, be safe and stable, and, for biological medicines, be nonimmunogenic. The knowledge of how to deliver on these requirements is a competitive advantage; one’s products may not be able to claim IP but knowing how to successfully meet these standards is a barrier for “less-than-serious” participants in the market.

Achieving competitive market goals in the biosimilar market first requires reflection on the challenges and flaws in the existing practices used to make the originator molecule. A biosimilar provider must ask itself: what changes do we need to make to reach our goals, and how do we implement them? To know this answer requires them to question specific elements of their business model and marketing strategy:

• What markets do we wish to cover, and what are acceptable price points and margins?
• Is this a sensible product to include in the company’s portfolio, and does it play to our perceived strengths in the marketplace?
• Should we consider partners to take the product to market in at least some geographies?

When considering these questions, a few points may seem obvious. First, the cost of goods of a biosimilar should be one-twentieth to one-fiftieth of the innovator drug, so material cost in a dose is less than $20. This requires a highly efficient process. For a mAb process, this translates to cell culture titers of 8 to 10 grams per liter (g/l) recovered at 80 percent yield in a downstream process.

Putting this in some perspective, only 12 percent of processes before 2015 achieved more than 6 g/l,13 which would imply a significant cost improvement if the industry can achieve this ambitious goal. So, are current practices and processes taking us in the direction of fast and efficient biosimilar production? The answers are mixed across a diverse set of companies, but we can certainly identify some challenges, particularly as each targets speed and productivity:

• A tendency to acquire rather than develop clones to save time often backfires as companies struggle to establish the imported technology.
• Targeting high copy numbers in clone development to increase titer can result in genetic instability.
• Random integration of gene of interest in the host genome leads to high clone and product heterogeneity.
• Process optimization with a major emphasis on downstream processing typically results in high product loses and poor yields.

These experiences show there must be more focus on the research component of delivery, as a pure focus on development is unlikely to lead to an improved and differentiated position. A few lessons learned point to developing platforms with the following features:

• developing a cell line allowing site-specific integration of the gene of interest
• use of promoters that overcome potential silencing of the incorporated gene.

Some of the well-established methods known to deliver improved result are:

• inserting an internal ribosome entry site to help expression of multiple genes from a single promoter
• incorporating various DNA “tricks,” such as ubiquitous chromatin opening elements, matrix attachment regions, and stabilizing and anti-repressor elements; these protect against gene silencing and DNA methylation and improve histone acetylation, enhancing protein expression approximately 15-fold without the need for gene amplification
• selecting a clone that goes beyond simple high levels of messenger ribonucleic acid transcription: it must be able to handle critical-to-quality aspects, such as protein folding and secretion and, of course, maintaining good viability
• boosting protein expression and secretion several fold by using compatible signal peptide to help the above

Translating Best Practices Into Success

Advances in gene editing technologies will undoubtedly improve the tricks and tools needed to achieve these goals, but it is equally more important to realize that simply racing to achieve speed while purely imitating will not be enough for competitive differentiation. Instead, some key factors may be what is needed to translate into best practices and, ultimately, success:

• Cost management through a lean structure that is sophisticated enough to ensure smooth transfers or operations.
• Products are selected that are a strategic fit for the business, such as therapy area expertise.
• Targeted yields of product in manufacturing is much higher than the current industry average.
• Products meet U.S. FDA and European Medicines Agency quality standards.
• Fifteen to 20 percent of R&D resources should focus on creating differentiation.

Biosimilars can be an important market opportunity, reaching new global customers in emerging markets that are increasing spend on healthcare fueled by the rise of the middle classes. The caveat is that they must be delivered at the right price point, so cost-competitiveness can be maintained for more than 10 years. Achieving overnight success is unlikely; however, with a strong plan and clear foresight, the wheels of common sense will lead a company’s journey and its product into a sustainable future.

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Dr. Ashok Kumar carried out his Ph.D. work at Central Drug Res. Institute, Lucknow under the supervision of Dr. Nitya Nand. This was followed by Post-Doctoral studies with Prof. Sir John Cornforth, a Chemistry Nobel Laureate, at the University of Sussex, England from 1981-1984.

He started his carrier with at ICI, Bombay in 1985 and served Lupin Laboratories before taking up the job with Ipca Laboratories Mumbai, a leading Pharma Company in the year 2000 and is presently heading the Centre for Research & Development of Ipca in the capacity of President.

He is a co-author in more than three dozen papers published in peer reviewed International Journals, co-inventor in more than 100 patent applications filed, has presented scientific papers and keynotes in many National / International Conferences in addition to delivering invited talks on R&D Management, Idea Management, Innovations, Role of Common Sense and Philosophy in Discovery / Research and many more such topics.