By Eric Langer, president and managing partner, BioPlan Associates, Inc.
Although change is constant, it generally comes very slowly to the highly regulated biopharma industry. Bringing a biologic to market can be a decades-long process, so tracking trends needs to take a long view. Based on decades of analysis, and findings from our 13th Annual Report of Biopharmaceutical Manufacturing, this article will outline some of the key factors affecting the industry today.
Despite these long timelines, biologics innovators, suppliers, and investors remain excited about this exceptionally high-tech, growing, and profitable industry. And the segment’s dynamics continue to evolve as broader pharmaceuticals shift towards biopharmaceuticals, new drugs are discovered, and biosimilars bring in new global participants.
China And India: Developments And Challenges
A major trend in 2016-17 is the continued expansion of the biopharmaceutical industry in developing countries, notably China and India. Both countries are now estimated to have approximately equal total bioreactor capacities, with each possessing ~10 to 11 percent of total global liters capacity.1 A few Western companies have begun to build their own or partnered facilities in these countries. In many developing countries, including China and India, this is required, but with two-thirds of the world’s population, and with growing economies, the domestic demand for biologics alone is a strategic factor in the industry’s regional growth.
Some of the emerging trends in China and India that indicate a maturing of their technical experience include a shift away from decades of emphasis on microbial fermentation, toward adoption of mammalian cell culture platforms, recombinant proteins, and even monoclonal antibodies (mAbs).
Both India and China have set goals to develop significant domestic follow-on (initially mostly biogenerics vs. genuine biosimilars) and eventually innovative products. At present, China is primarily concentrating on providing biosimilar versions of Western products for its domestic markets, while India concentrates more on developing biogenerics/biosimilars for export, mirroring that country’s experience as a major player in generic small molecule drugs. Most developing countries grow their domestic companies by adding capacity, with China and India having total bioreactor volume of about 1.8 million liters, and China is growing with new facilities more rapidly than Western regions.1
The largest (claimed) single-use facility is being brought online by WuXi Biologics in China. And 2016 saw significant precedents with two foreign companies, GE (U.S.) and JHL Biotech (Taiwan/ROC), opening modularly constructed (shipped in), fully single-use bioprocessing facilities in China for contract manufacturing.
China in 2016 also implemented a pilot program allowing biopharmaceutical developers to hire CMOs for manufacture, something still not yet allowed in China for commercial manufacture. Yet Boehringer Ingelheim has already invested heavily in a CMO facility in Shanghai that will employ single-use platforms. This approach allows the company to take advantage of the flex-capacity benefits of single-use technologies, and will reduce the need for fixed facility investment in the event regulations around contract manufacturing in China are not finalized before the facility is commissioned.
Many steps need to be resolved before China can take a position on the global stage. Quality of production and finding trained staff are just two of the hurdles being faced. And although they are intensely working on implementing more robust regulations and timely approvals, these problems will not be quickly resolved. In addition, China in 2016 began to more strictly regulate its clinical trials sector. Regulators reported data quality issues with trials for about 80% of approved products, which resulted in stricter regulations and enforcement.
In contrast, in India there is more interest in continuing to target low(er)-end international and domestic biogeneric markets, rather than higher quality, major market biosimilars and innovative biopharmaceuticals. There has also been relatively limited move toward adoption of stricter regulations. But India made some steps forward in 2016, including gaining U.S. and EU approval for several biosimilars manufactured domestically. However, unlike China, biopharmaceuticals (from a Western perspective) in India saw some setbacks, including the pharmaceutical sector and government continuing to avoid adoption and enforcement of high(er) standards. Comparing India with China biopharma, we see that China has fewer infrastructure issues (access to land, electricity, power, wastewater processing, etc.). China also has high-level government coordination and industry subsidies. As such, the Chinese industry looks on track to surpass the Indian biopharma industry.
Many companies in China are building or planning upgraded GMP facilities and positioning themselves to initially manufacture biosimilars and then move on to developing innovative biopharmaceuticals.2 In contrast, while there is interest in developing innovative products in India, at present there is limited infrastructure, education, training, or government support for expansion, investment, or international partnering. In China, there is a trend toward established companies (e.g., domestic vaccine manufacturers) continuing to use stainless steel for manufacturing, while many newer companies — often managed by experienced staff returning from the U.S. or Europe — are tending to adopt single-use systems for manufacturing.
More Trends To Follow In 2017
Some additional trends affecting the industry today that will carry through 2017 include:
Annual sales of biopharmaceuticals are now over $200 billion globally, and industry revenue continues to grow at a rather steady ≤15% annually. An increasing number and percentage of pharmaceuticals entering the market are biopharmaceuticals, with about 40% of Big Pharma and overall pharmaceutical R&D/pipelines now involving biopharmaceuticals, not drugs (chemical substances). 2016 continued the trend for increased major market approvals of innovative biopharmaceuticals and biosimilars.3
Biosimilars Are Finally A Reality
By the end of 2016, four biosimilars — including several mAb products — had been approved in the U.S., which is expected to be their major market. However, only one of the four has yet to be launched in the U.S. due to patent infringement concerns. Patent challenges and disputes over biosimilars will become commonplace as more products approach marketing.
End-users are demanding their suppliers develop more continuous processing technologies, and suppliers are responding with new R&D investments. In this year’s BioPlan annual industry survey, “continuous processing – downstream” was the #1 area where survey respondents wanted equipment suppliers to concentrate their R&D efforts. Downstream, multiple companies introduced multi-column and other chromatography systems designed for continuous purification. Upstream, single-use versions of Repligen’s perfusion system (ATF) became available.
High prices for pharmaceutical products, with biopharmaceuticals the most expensive, are a growing concern, including in the U.S., the largest market lacking price controls. Focus on the cost of biologics may affect the investment climate. Related to pricing, the US insurance situation may be affected if the Affordable Care Act (ACA, or Obamacare) is repealed by the new administration; this could include repeal of the BPCIA (Biologics Price Competition and Innovation Act), which is part of ACA.
Our research indicates growth in productivity, including bioreactor titers and capacity utilization.2 For example, that industry overall capacity utilization, now a healthy 74.7% for mammalian cell culture production, is capable of producing the increased gram quantities of drugs demanded without a commensurate scale-up of manufacturing equipment, staffing, or expenses. This has been accomplished by increasing overall productivity and reducing costs. For example, average commercial-scale mammalian cell culture titer is now 3.2 g/L, nearly doubling over the past 10 years and up magnitudes of order over the past couple decades.4,5 Largely due to more flexible manufacturing strategies like single-use bioprocessing, and more efficient facilities, the worldwide “capacity crunch” concerns are now a thing of the past.
Downstream, mostly purification, continues to limit productivity, with purification unable to keep up with improved upstream processing. This is a major reason for increased interest in continuous purification, which may resolve many downstream processing bottlenecks. 2016 brought purification advances, including new continuous chromatography systems and technologies like Pall’s Cadence Acoustic Separator (CAS), which uses sound waves to physically push impurities so they can be more easily removed from the bioreactor.
Besides established small molecule drug companies moving into large molecule biopharmaceuticals, international biosimilars producers are bringing dozens of new entrants into the space. Although the average production scale for each biosimilar will be smaller than for the original reference product, new facilities and suites will be needed for their manufacture. These will need to be designed for efficiency and staffed by a new cadre of operations employees with expertise in automation.6
An Increasingly Global Industry
Biopharmaceutical manufacturing and marketing is increasing worldwide, most rapidly in developing countries (starting from near-zero baselines). Besides prospective industry powers, such as China and India, biopharmaceutical manufacturing is starting to take hold in other developing countries, e.g., Vietnam and Cuba.
Single-use technology continues to grow at the expense of stainless steel systems. Most bioprocessing facilities that came online in 2016 were single-use based. This is particularly true in major market countries. Most large-scale stainless steel plants are now being constructed in developing countries. However, stainless manufacture will continue to be the only production platform for many biologics, especially where large production volumes are needed and the relatively small single-use volumes will not suffice.
Hiring — A Growing Problem
As the biopharmaceutical industry grows, there is increased demand worldwide for related expertise. Hiring of bioprocessing professionals is becoming increasing difficult.4 This problem will be exacerbated when biosimilars manufacturing begins to create demand for trained operations and process development professionals.
The Evolution Of Fill-Finish
Fill-and-finish with biopharmaceuticals is becoming increasingly complex, including more complicated injectors and other delivery systems. There is increased adoption of restricted-access barrier systems (RABS) and isolator units. Single-use systems are finally starting to make an impact on fill-finish operations.
There appears to be a slow developing trend for increasing use of microbial vs. mammalian expression systems. This includes a large number of microbial products in the development pipeline, including many single-chain and other alternative framework antibodies and antibody-drug conjugates (ADCs), with most ADC “drugs” being microbially expressed toxins. However, this trend is only in major market countries.
Overall, trends in the biopharmaceutical industry remain very positive, with no significant threats on the horizon, and healthy industry growth occurring worldwide. The industry will continue to change and grow at a steady pace, providing opportunities for those who recognize the slow, regulated nature of this industry.
- R.A. Rader and E.S. Langer, Top 1000 Global Biopharmaceutical Facilities Index, accessed Dec. 2016.
- Y. Zhou, Top 60 Biopharmaceutical Manufacturers in China, 2nd Edition, BioPlan Associates, Inc. (Rockville, MD), Jan. 2017.
- R.A. Rader, BIOPHARMA: Biopharmaceutical Products in the U.S. and European Markets: U.S. Approvals, 2002-present, accessed Dec. 2016.
- 13th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production, BioPlan Associates, Inc. (Rockville, MD), April 2016.
- R.A. Rader and E.S. Langer, “Thirty Years of Upstream Productivity Improvements,” BioProcess International, Feb. 2015, p. 10-12.
- R.A. Rader, Biosimilars/Biobetters Pipeline Database, accessed Dec. 2016.
About The Author:
Eric S. Langer is president and managing partner at BioPlan Associates, Inc., a biotechnology and life sciences marketing research and publishing firm established in Rockville, MD, in 1989. He is editor of numerous studies, including Biopharmaceutical Technology in China, Advances in Large-scale Biopharmaceutical Manufacturing, and many other industry reports. You can reach him at firstname.lastname@example.org or 301-921-5979.