Untangling The Sticky Biosimilar Web – How Indian Companies Should Exploit This Frontier
For many biotech companies, March 6, 2015 was considered as one of the major milestones in the development of global biosimilars market as US FDA gave its nod to the first biosimilar product – almost 9 years after EU approved launch of mimics of biological drugs in 2006 – in the country. This provided an opportunity to Indian pharma companies, active in biotechnology arena, to exploit the world’s largest biologics market.
Many of the Indian companies – such as Biocon, Dr Reddy’s, Zydus Cadila, Wockhardt, Intas, etc – are already active in biosimilar markets in India and other emerging markets. Dr Reddy’s Laboratories Ltd, the first Indian firm to rollout a biosimilar, has seen its biologics business grow multiple-fold since the launch of Reditux (rituximab) in 2007 and its products are currently being sold in over 10 emerging markets.
Dr Cartikeya Reddy, executive vice president – biologics, Dr Reddy’s Laboratories Ltd, observes, “We have increased patients access to these otherwise unaffordable drugs by 7-10 times across these markets, while simultaneously reducing the burden on healthcare systems. Our revenues have grown at a CAGR of 30 percent year-on-year and our regions of focus are the US, India & South Asia, Southeast Asia, Russia & CIS, Latin America and the Middle East & North Africa.
”Dr Cartikeya Reddy, EVP – biologics, Dr Reddy’s Labs Dr Cartikeya Reddy, EVP – biologics, Dr Reddy’s Labs Currently, the company has four biosimilar products – rituximab, filgrastim, pegfilgrastim and darbepoetin – sold across various markets – emerging and developed. The next two products, trastuzumab and bevacizumab, are in clinical development and are expected to be launched shortly. “Besides these, we have multiple molecules in early development with two additional molecules entering toxicology phase towards the end of the year. By FY20, our overall portfolio will exceed 15 products which will include 5 new products in clinical development. We will continue to follow a global development approach for all our current and future products,” added Dr Cartikeya Reddy.
Similarly, Biocon Ltd, which received its first approval for insulin glargine in a developed market (Japan) in March this year, is gearing up to submit application for approval in Europe and the US for four products – namely pegfilgrastim, trastuzumab, insulin glargine and adalimumab – in FY17. Regulatory filings for the four most advanced biosimilar programs are likely to provide the company an early mover advantage in an over $ 30 billion addressable market.
Dr Arun Chandavarkar, CEO & Jt MD, Biocon Ltd Dr Arun Chandavarkar, CEO & Jt MD, Biocon Ltd “We already have approvals in over 60 emerging markets for our rh-Insulin and in over 20 emerging markets for our insulin glargine. These markets have begun to contribute significantly to our revenues. We expect trastuzumab approvals in emerging markets to make meaningful contribution to our revenues beginning FY17. Overall, the revenue growth from these markets is expected to be robust in the near-term,” states Dr Arun Chandavarkar, CEO & joint managing director, Biocon Ltd.
The global biosimilar industry is growing rapidly with the market estimated to reach $ 20 billion by 2020. Biopharmaceutical products with current sales of $ 72 billion are expected to be off patent by 2024. According to a Deloitte report, the loss of patent protection between 2014 and 2022 for 11 established biologics products – representing 48 percent of total biologic sales – combined with increasing global focus on improving healthcare access and reducing the cost of care, presents growth opportunities for biosimilars manufacturers in both developed and emerging markets.
Steven Lehrer, CEO, Cipla BioTec Steven Lehrer, director, Cipla BioTec This has attracted new players in the biosimilar space. For example, Cipla, one of the leading generics manufacturer know for providing affordable drugs globally, last week announced its plans to set up a new biotech facility for the production of biosimilars in South Africa. “We plan to file our first dossiers in 2018 and market our products as soon as regulators approve them. Access (to biosimilars) is an issue worldwide. Less than 30 percent of patients in the US and EU receive treatment mainly due to costs reasons. We aim to solve this problem worldwide,” says Steven Lehrer, director, Cipla BioTec, the biotechnology arm of Cipla.
According to Ministry of Commerce and Industry, India’s pharmaceutical export segment has more than doubled from $ 7.8 billion in 2008 to $ 16.5 billion in 2014. With biologic treatments introduced for diseases such as diabetes, cancer, multiple sclerosis, and rheumatoid arthritis, potentially lucrative biosimilars market could emerge as another growth driver of India’s pharmaceutical sector.
To increase global reach and market acceptance of their products, Indian companies are setting up manufacturing base overseas. For example, Biocon has reportedly invested $ 200 million on its just commissioned insulin plant in Malaysia.
“From a capacity perspective, we are well-placed to cater to our mid-term demand in both emerging and developed markets. Our major greenfield expansion project for insulins in Malaysia was successfully commissioned and received local cGMP certificates. This allowed us to commence the necessary validation batches to enable filing for global approvals in FY17,” said Dr Chandavarkar.
Similarly, Cipla is investing about Rs 600 crore (Rand 1.3 billion) in the new biosimilars manufacturing facility in South Africa, which the company intends to use to serve local as well export markets such as US, Europe and Asia.
Though biosimilars have emerged as important tool to treat cancer and autoimmune diseases, they are only used by about 8 percent of patients worldwide due to the high costs of these drugs. As more companies join the bio-generics race, prices are likely to fall resulting in higher usage. According to IMS Health study, patient access to biologic treatments has grown by as much as 100 percent following the availability of biosimilars.
Dr Reddy observes, “Dr Reddy’s aim is to accelerate global access to biosimilars. In emerging markets, we aim to alleviate the unmet need caused by exorbitant prices of originator biologics through a broad portfolio of affordable, high quality biosimilars. In developed markets, where the medical need is already substantially met, we aim to drive significant reduction in the cost of biologics treatments through proven products that rapidly gain patient, physician, provider and payer acceptance.”
The IMS study highlighted that greater acceptance of biosimilar medicines in a growing number of therapy areas and an active pipeline of 56 new products in clinical development are expected to deliver total savings of as much as $110 billion to health systems across Europe and the US through 2020. Probably this is one of the reasons why US President Barack Obama is pushing for setting the exclusivity period for biologic drugs at 7 years instead of 12 to ensure early availability of cost-saving copies in the market. If this happens, Indian companies should be ready for a windfall of opportunities.
