From The Editor | September 11, 2017

Pfenex's New CEO Sizes Up Biosimilar Industry's Future

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By Anna Rose Welch, Editor, Biosimilar Development
Follow Me On Twitter @AnnaRoseWelch

Biosimilar industry

It’s not every day you catch word of a pharma company appointing a new CEO. But the past two months have been an exception. Just this month, Novartis announced Joe Jimenez will be stepping down, and the company’s current chief development officer, Vas Narasimhan, is set to take over the role. But the biosimilar space had its own CEO appointment to celebrate last month: Eef Schimmelpennink took over as CEO of Pfenex.

Schimmelpennink had only been at Pfenex for all of nine days when he talked with me about his plans for the rising biosimilar player. Though it’s still very early days in his role, his past experiences in the small molecule generics space and most recently as the CEO of biosimilar company Alvotech have readied him to lead Pfenex into this burgeoning market.

A question I’ve been considering as of late is how the biosimilar space will require companies to break from tradition. So far in the biosimilar space as a whole, we’ve seen some interesting regulatory developments. The industry has been adapting to a shift in the typical biologics development paradigm, which could lead to even more abbreviated biosimilar development models in the future. Interchangeability, which was a given for small molecule generics, became a regulatory status for biosimilars in the U.S. Starting discounts have been unimpressive for those hoping for large discounts right off the bat. And, last but not least, naming and coding have reached a surprising level of complexity. So, if we’re looking at these surface-level aspects of the biosimilar industry, it might seem all we’ve done thus far is depart from the tradition established by small molecule generics — especially in the U.S.

However, this isn’t to say that, on a business level, companies can’t learn anything from the trends we’ve observed in the past. Having both a small molecule generics and biosimilars background, Schimmelpennink is well-poised to manage a key aspect for any biosimilar company CEO: Balancing the past and the future. As he described, “Though I always prefer to look forward, sometimes it’s good to look at past experiences.”  

Schimmelpennink’s primary challenge will be one faced by many pharma companies in the small molecule generics industry and novel biologics space: How to adapt the business to a constantly changing future. Though it’s still very early in his tenure, Schimmelpennink highlights some areas he will keep in mind as he steers Pfenex’s future biosimilars onto the market.

How The Past Is Playing Out In The Biosimilar Space

In the past, Schimmelpennink led Hospira’s (now Pfizer’s) European injectables business and managed the distributor business in Eastern Europe, the Middle East, Africa, Turkey, and Greece. It was during his time at Hospira that he was introduced to the process of launching some of the first biosimilars — and one of the first mAbs — to the market, either through partnerships or directly onto the different markets. Through this experience, Schimmelpennink learned not only how to develop biosimilars and what it was like to sell them, but also that there are — and must be — seemingly countless ways to do this.  

“I quickly learned — especially once I was responsible for the global injectables business — that there’s clearly no such thing as one plan or one solution that fits all,” he offered. “We all know it’s very much product- and market-driven.”

This is a lesson that continues to rear its head for biosimilar makers (or, really, for any drugmaker). Though launch strategies will vary, Schimmelpennink argues one of the keys to getting the “right” product to the “right” market is by ensuring you have a solid supply chain in place. In fact, this is one area he argues the industry could become more efficient in the upcoming years. 

To date, the industry has sometimes struggled to ensure a stable supply of more complex molecules, which can be seen, for example, in injectables. If a similar issue were to occur in biosimilars, especially at this time when the industry is still in relative infancy, stakeholders could consider biosimilars a less trustworthy alternative to reference products, and patient access would be negatively impacted. 

Ensuring a stable supply chain will be especially important as payers continue to play a larger role in driving which biosimilar alternative is preferred. As the market matures and multiple biosimilar alternatives are available for one reference product, this becomes even more important. “The ability to respond to demand quickly with a solid supply is a clear competitive advantage,” Schimmelpennink added.

Working in the small molecule generics/specialty generics space also gave Schimmelpennink a good look into the broader market trends that shaped business practices and could inform those in the biosimilar space. For instance, 10 years or so ago, many of the players in the small molecule world were looking forward and trying to determine where and how they could grow and extend their businesses. “The EU and U.S., which is where the money was being made, were both changing, and the question became ‘where do we go?’” Schimmelpennink highlighted. Many companies chose to expand their reach into Eastern Europe, the Middle East, Africa, and Latin America in order to grow their portfolios and to differentiate in the small molecule space.

“I think, in principle, we’re going to see that cycle repeat itself,” Schimmelpennink added. “There’s still a huge untapped potential outside of mainland Europe and the U.S. I’m a firm believer if you get the pricing and the distribution model right, there’s a lot of potential to tap in these markets.”

Another trend worth keeping our eyes on is market consolidation. We’ve seen generics powerhouse companies like Mylan and Teva become even larger presences on the market, thanks to acquisitions. Similarly, Schimmelpennink recalled how, six or seven years ago, we saw many of the Big Pharma companies looking for growth. And now, we’re seeing many of their decisions to pursue biosimilars paying off as they become the first-arrivers on the market. “There are a lot of companies, currently more in the generics space, that need to find new drug platforms,” he pointed out. “They will be looking for ways to grow.”  

The Next Steps For Pfenex

Schimmelpennink is bracing to ask some of the same questions about Pfenex’s direction moving forward — but there is still some work to be done first. His first priority is executing on the company’s goals of bringing its products to the finish line. In fact, one aspect that drew him to Pfenex was its pipeline, which features biosimilars of Forteo, Lucentis, Betaseron, Neulasta, Cimzia, and Oncaspar. The company also is working on hematology oncology products with Jazz Pharmaceuticals, and two anthrax vaccines funded by the U.S. government. But looking through this biosimilar pipeline, one thing jumps out: it’s not dominated by the products being pursued by other players today — for instance, Remicade, Humira, and Herceptin. Schimmelpennink saw potential in the fact that Pfenex is playing in a less-crowded field.

“We’re not looking at the biosimilar market we expected four to five years ago, where we anticipated three or four players per product,” he explained. “It may go to that 10 years from now, but currently, we’re in this window where there are many more players. With our current pipeline, there may be one or two players that Pfenex will compete with, but that’s not a dozen,” he added. 

So far in his role, he’s spent time talking with the different teams to figure out where the programs are and what adjustments may need to be made in prioritization and resource allocation to bring each product to market. Though he doesn’t see clinical risks rearing their heads (knock on wood), one aspect the company is hoping to ramp up is its regulatory efforts. As they approach FDA submission with their Forteo biosimilar (currently in comparative clinical studies), they have and continue to bring the right people on board. As Schimmelpennink described, “Pfenex has many potential avenues to venture down, which is a good challenge to have — we just have to make sure we allocate the appropriate financial and human resources to each.”

Fast-forward a few years down the road, once the company has succeeded with its current portfolio, Schimmelpennink plans to address the all-important question: “What’s next?” The company’s current pipeline already reveals a diverse array of products, including biosimilars and novel products and vaccines. One benefit of this pipeline is that it bodes well for future growth in a number of directions.

In the current biosimilar space, we’re no stranger to companies evolving in order to save resources and capitalize on their strengths. We just saw the sale of Merck KGaA’s biosimilar business to Fresenius Kabi and pure-play Samsung Bioepis jump into the novel biologics game with Takeda. And Pfenex will be no exception to similar evolutions.

As Schimmelpennink explained, “There’s so much opportunity within our organization that we’ll have to make choices. Do we continue to build a full-flex biosimilar company on the current platform? Or, maybe we’ll find the opportunities lie elsewhere. Do we continue to add more novel proteins? Will we enter the enzyme world? Ultimately, the main challenge we’re going to end up facing is how we’re going to prevent ourselves from trying to be five things when we’re going to be successful focusing on one or two.”