The biosimilars market is suddenly booming, with established biopharma giants and nimble start-ups all clamoring for a piece of the action. But such steep competition means that only the wise will survive.
By Günter Jagschies
Biosimilars have been around for years, but the biopharma industry – as well as the healthcare community – has been slow to embrace them. Today, however, the competition is really beginning to heat up, with a rising tide of new biosimilar approvals coming from both established companies and new players, including companies in emerging markets, such as India. Approvals in the US have really helped boost the market, and we’re also seeing the first biosimilars coming to market under China’s new FDA-like regulations. Previously, it could take two years for an IND to be approved in China – now, it can be done in six months.
Fig 1. Drivers and hurdles for the successful introduction of biosimilars
The original regulatory guidelines were designed by the EMA back in 2005 and many other countries have created regulations since then. In 2012, the FDA introduced its own regulations, which are similar to the EMA’s but with a stand out exception: only when a biosimilar company files its dossier do they find out what opposition they will meet along the way. A copy of the biosimilar application is passed on to the originator company within 20 days after the applicant has been informed (by the FDA) that the dossier has been accepted for BLA review. Thereafter a process sometimes referred to as the “patent dance” begins between the biosimilar and the originator businesses, independent on the approval process, to present and discuss intellectual property issues and to eventually resolve them; only then is the originator’s defense strategy revealed and can be responded to. An approval may be given by the FDA, but the beginning of biosimilar marketing may still be delayed due to the outcome of the “patent dance” (example: adalimumab biosimilars in the USA).
As more countries take cues from existing guidelines, the regulatory environment is becoming much more transparent and predictable, which is very positive news for companies who need to plan for the regulatory hurdles ahead.
Right now, newly introduced biosimilars are almost exclusively antibodies, covering a range of indications, including autoimmune diseases, Crohn’s disease and cancer. We’re also seeing a few insulin biosimilars coming to market – mainly copycats of Lantus, the most successful long-acting insulin model. A major reason that these molecules are being targeted is revenue, which regularly hits $6 billion annually but can exceed $10 billion.
Given that the largest driver behind biosimilar development is financial rather than a need for medical alternatives, biosimilars commonly appear in therapeutic areas with proven profit margin. Right now, at least 100 companies are working on just 5–10 molecules. The competition will be fierce! And though some competition can be a good thing, after a certain point it becomes destructive unless many of these businesses would fail in the process, market share for everyone would just be too small to be attractive. For the first generation of biosimilars, price reductions were often around 30 percent, but we’re now looking at 50–70 percent reductions versus originator products. The “race to the bottom” is a double-edged sword: good for patients and healthcare systems, but potentially bad for companies who are facing limited revenue potential and a low market share, which will certainly constrain their ability to sustainably finance further projects.
Making a market impact
A number of companies have found success in the biosimilars market, but these are notably large and established players, such as Novartis, Amgen and Eli Lilly – companies that already have everything they need to be successful: experience in biological drug manufacture, financial muscle, and brand recognition. If you’re a new kid on the block and you’re trying to enter Western markets, you will be facing steep competition. There are some keys to success – but there are also common pitfalls.
Consider facility size
It’s not advisable to build a huge facility – particularly before you have something on the market. Avoid investing too heavily in production scale that you might not need in the future and instead consider a modular, flexible approach that can adapt to meet your future needs. You can always build capacity in a stepwise fashion as you begin to need it. However, do invest in efficient production technology and a powerful analytical laboratory to make sure you’re always in control of quality.
Approach clinical trials wisely
A cleverly designed clinical trial can have huge benefits. A good example is Celltrion and their antibody drug Remsima, which is a biosimilar of infliximab. They ran a relatively small clinical trial, but received approval for all the medical indications that infliximab has collected over the years – so they gained a whole portfolio of autoimmune diseases for the cost of one trial.
Stand out from the crowd
It’s not enough to have a molecule that can pass a clinical trial – you need market access, and you need a “hook.” Consider what your product offers that the competition doesn’t: a quick way of reliably diagnosing the patients prior to application of the therapeutic or a convenient and painless administration device could be examples. Without a unique angle, you’re entering an already fragmented market and joining 10 other companies with the exact same idea – and you’ll have to join them in the ensuing race to the bottom of the pricing scale!
Choose your market
If you want a significant market share, you have to think globally. Emerging markets are an important area to consider when developing biosimilars; patients in emerging markets are very open to biosimilars and there are less restrictions concerning changeability. However, it means that price becomes an even bigger focus, although governments may offer incentives to businesses that want to develop biosimilars and commit to low prices. They may also prefer local industry to imports, as they see the biosimilars industry as an opportunity to grow the local expertise and the related job market.
Looking forward, I predict that we will see a greater variety of biosimilars within the next few years – every molecule that can be copied and turned into a successful biosimilar will be copied and turned into a successful biosimilar! For now, the focus is likely to be on the biopharma drugs ranking highly in revenue terms. More options will open as intellectual property expires, and it’s relatively easy to get started in biosimilars given that there are platform technologies and established approaches available.
I also predict that we will see a change in the uptake of biosimilars – I think we will see biosimilars begin to command a much larger market share than before, which will change our entire industry. We are likely to see a trend of lower prices – both for biosimilars and legacy drugs (originator companies will have to fight back by lowering their own prices, the only other alternative would be to defend the market with clearly superior next generation products).
Today, biosimilars and originator biopharma drugs are considered separate to one another. With more and more biosimilar approvals, the lines will blur. Biosimilars will simply become part of the normal competition. For all players in the biopharma industry, it pays to begin to adapt to the market changes now. Whether we like it or not, we must all embrace the biosimilar future!
Günter Jagschies is Senior Director of Strategic Customer Relations, Cytiva, Freiburg, Germany.