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Similar or superior?

There are mixed views on the value of developing biosimilars, despite the shorter regulatory pathway, and some see more prospects for biobetters

Two highlighter pens, one green and one redIn the last 10 years a good deal of attention has been paid to the emerging market for biosimilar drugs or, in other words, copycat versions of biologic brands. However, questions have been raised about the economics of the approach.

Companies are emerging which are asserting that, for them, the business case for developing biosimilars, even with the truncated regulatory pathways in operation in Europe and coming to fruition in the US, simply do not add up.

They believe the big market opportunity lies in so-called 'biobetters', which improve on the original biologic drug, often by applying drug delivery technology, in order to improve its dosage characteristics, safety or efficacy.

Making 'equivalent' versions of branded biologic drugs is no easy feat and is much more difficult than for small-molecule therapies. Biologic actives are much more complex molecules and there is a close relationship between the manufacturing process and a drug's clinical attributes, so traditional notions of bioequivalence, which underpin the small-molecule generic drug market, do not apply. Hence the term 'biosimilar' or, in US Food and Drug Administration (FDA) parlance, 'follow-on biologic', has been coined.

On the face of it, the economics for biosimilars remain compelling. Worldwide, biologic drugs generate more than $120bn in sales and recent market research from Datamonitor indicates that more than 30 branded biologics worth a huge $51bn will lose patent exclusivity in the next five years. The global biosimilar market is expected to grow dramatically, from $243m in 2010 to $3.7bn by 2015.

On the face of it, the economics for biosimilars remain compelling… The global biosimilar market is expected to grow dramatically, from $243m in 2010 to $3.7bn by 2015

Setting the scene
The biosimilar market in Europe is already becoming well established. A truncated regulatory pathway, which reduces the amount of clinical testing required for a biosimilar, provided that the sponsor can prove it is similar in terms of quality, safety and efficacy to the reference product, has been in place in the EU since 2005.

The US has been somewhat slower. It was not until last year's signing into law of the Biologics Price Competition and Innovation (BPCI) Act that a regulatory pathway for biosimilars was put in place to match the one for small-molecule drugs in the Hatch-Waxman Act.

The US legislation introduces two tiers of product. One tier is for biosimilars, using criteria similar to that in the EU model. The other tier is for biologics that are 'interchangeable' with the reference product, and subject to more rigorous standards. The pay-off for matching the reference product more closely is being awarded first-to-file exclusivity, as occurs with small-molecule generics.

The legislation is still in overarching form, and the detail remains to be finalised. In November 2010, the FDA held a public meeting at which drugmakers and other stakeholders could provide feedback on the BPCI pathway. Anecdotal reports indicate that some companies are fully behind the approach, while others are staunchly against it.

"Review to determine biosimilarity or interchangeability of a proposed product in a [biosimilar] application is expected to be comparably complex, technically demanding, and resource-intensive as a review of a proposed [innovator biologic] application," said the FDA at the time. Since then, though, the agency has pressed ahead with implementation and latterly issued a proposed plan for user fees to help fund the process.

Similar challenges
There is clearly a big market opportunity for biosimilars and truncated regulatory pathways have been worked out in major markets around the world, which can be used to avoid expensive phase III clinical trial programmes. So why are some people less than enamoured of the business case?

The primary issue is the technical challenge in establishing structural comparability between a biosimilar and the reference product, as even minor manufacturing changes can produce large responses in the clinical profile, and particularly the immunogenicity, of the molecule.

Companies developing biosimilars generally need to develop cell lines and recombinant protein expression systems which are close to the originator's system in order to reproduce the pattern of sugar groups (glycosylation) of the reference product. The glycosylation pattern is critical to the functionality, safety and tolerability of biologics, particularly antibodies, and helps prevent the patient generating an antibody response to the drug, which can reduce activity and cause side effects.

Matching the reference product closely can be expensive and time-consuming, as the complexity of biosimilar agents means that preparing regulatory dossiers is a more intensive process than for small-molecule generics. At present it is estimated that biosimilar development costs around $100m and takes around eight years.

For that reason, biosimilars command higher prices relative to their reference products than small-molecule generics, which has helped mitigate the market share fall-off of branded biologics after the introduction of copycat versions.  The discounted price tag of a biosimilar is estimated to range from as little as 10 per cent to as much as 50 per cent off the branded drug.

Another risk is that after investing so much in a biosimilar's development, the regulatory authorities may classify it as a different drug. That could mean it would not be interchangeable with the reference product and would require additional studies, diminishing the return on the sponsor's investment.

As regulatory pathways open up, the market for biosimilars will also become more crowded, with multiple players competing with the reference product on price but without the innovator's brand recognition. And since regulatory, clinical and brand development requirements vary by region, it may be impossible to develop a global biosimilar product, forcing developers with international ambitions to carry out multiple development programmes.

For some, the biosimilar figures do not add up. The high cost of development, manufacturing and marketing means that margins may be tight and preclude sufficient price discounting to encourage substitution of a well-established brand. There is some evidence for that view. The first US-approved biosimilar, Sandoz' human growth hormone Omnitrope, has 'low single-digit' market share, according to the company, and a few million dollars in annual sales, despite being on the market since 2006.

Given that biobetter development is akin to the traditional line-extension model in pharma, it is no surprise that many of the players are companies with established biologic brands

Better rationale?
Some see more potential in developing biobetters, which can claim a therapeutic advantage over both the reference product and biosimilars alike, despite the fact that they are unlikely to make use of truncated regulatory pathways.

Like biosimilars, biobetters are already an established category, albeit largely as line-extensions from biologic brands. For example, several drugs on the market make use of PEGylation technology, which involves the attachment of a polymer to increase the half-life of the molecule in the body. Examples include Amgen's Neulasta (pegfilgrastim) and Pfizer's Somavert (pegvisomant).

Another strategy is to engineer the glycosylation pattern of the molecule to render it 'more human', and defend it against attack by the immune system. Amgen used this approach in its Aranesp (darbepoetin alfa) product, for instance.

Biobetter developers have greater freedom to choose their expression system as they are not tied to the originator's process, and this increases the likelihood of lowering manufacturing costs. It goes without saying that each should exhibit clear clinical benefits and be able to be positioned in the market as an improved therapy, commanding equivalent or premium pricing. The intellectual property (IP) position can also be stronger.

All that imparts greater risk and costs money, of course, as does the marketing challenge of building brand recognition and capturing market share from the originator, particularly as cash-strapped health systems strive to reduce spending on prescription medicines.

Given that biobetter development is akin to the traditional line-extension model in pharma, it is no surprise that many of the players are companies with established biologic brands, such as Roche, Biogen Idec and Amgen.

Novo Nordisk and Merck & Co are notable in that they have made biobetters an intrinsic part of the product development strategy, while AstraZeneca division MedImmune recently rewrote its strategy to focus almost exclusively on developing biobetter versions of antibody-based drugs.

A new class of biobetter company is also emerging. These tend to be smaller, sometimes virtual firms that outsource development and manufacturing tasks in order to reduce costs, cut the time to market and increase the return on investment.
These companies include Prolor Biotech, whose drug delivery platform has already been used under licence in Merck's infertility drug Elonva (corifollitropin alfa) which was approved in Europe in January 2010. Others include US companies Itero Biopharmaceuticals and Femta Pharmaceuticals, and Polytherics of the UK.

Although it is widely held that biobetters lack an abbreviated pathway, some observers have contended that on occasion they may be able to make use of regulatory routes such as the BPCI, being better but also highly similar as specified in the US legislation. One example could be extending half-life through PEGylation, in which the functional properties of the molecule are the same but the pharmacokinetic profile and dosing frequency is improved.

Ultimately though, trying to compare and contrast biosimilar and biobetter strategies is likely to be overly simplistic.

For some developers, getting to market as quickly as possible in order to capture market share will reap dividends. Others deciding to take the longer route in order to create a premium product will also be successful. This could be a case of comparing apples with oranges.

Phil Taylor

The Author
Phil Taylor is a freelance journalist specialising in the pharmaceutical industry



8th August 2011


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