Teva Pharmaceutical Industries ($TEVA) and Samsung Electronics separately hit the pause button last fall on development of biosimilars of Roche's ($RHHBY) drug Rituxan. Both indicated they were trying to read the tea leaves for what exactly regulators will require for approval. Given that the U.S. has yet to fully map the pathway, their near-simultaneous decisions have cast a pall over the highly anticipated but infinitely complex biosimilars market.
Ganesh Kaundinya, chief scientific officer at biologics and biosimilars developer Momenta Pharmaceuticals ($MNTA), doesn't mind a little regulatory uncertainty. To him, it offers the industry a chance to use evolving science to shape the regulatory approach. Still, Kaundinya understands the difficulty some companies have plunging ahead when they don't know what lies ahead.
"This is not for the faint of heart," the Momenta co-founder says. "This is for somebody who is really committed to going into it with deep pockets and wants to stay in it for several years before they can know the answer to it."
For those responsible for mapping a manufacturing strategy for biosimilars, these uncertainties add to the pressure of an already complex and challenging endeavor. Large-molecule drugs are derived from cells, and a higher level of precision is required in commercial manufacturing than in producing small-molecule products. The proteins are easily affected by variations in the manufacturing process, making it difficult to get a viable, repeatable entity. That also makes manufacturing more expensive, a factor that may weed out some players.
The complexity of biosimilars means that other aspects of the process must be interwoven into manufacturing decisions. Thomas Vanden Boom, vice president, global biologics research, development and manufacturing operations at Hospira ($HSP), says that to be successful, a company requires expertise across a broad range of disciplines. That includes everything from molecular genetics and cell-line development to bioseparations and microbiology, "to name just a few."
Amgen's ($AMGN) Geoff Eich, executive director for research and development policy, believes the evolving nature of the business necessitates having a close and flexible relationship with the regulators who will provide definition to this new market.
Whether biosimilars manufacturers grow this expertise in-house or acquire it on the open market is one of the many, many decisions they must make. Those in the trenches of biologics and biosimilars say any number of manufacturing models will evolve. Biotech companies like Amgen, which are already making biologics and are targeting biosimilars, have the know-how and the infrastructure to do it themselves. Biogen Idec ($BIIB) has lots of biologics manufacturing expertise but is also partnering with colossus Samsung. The South Korean company intends to bring its famed knowledge of cost reduction to bear on biosimilars production in order to sell them at half the price of the innovator product.
Matthew Hudes, U.S. managing principal in biotechnology at Deloitte Consulting, thinks the competitive price pressures that will drive the biosimilars business may very well lead to the first innovations in biologics manufacturing in 15 to 20 years.
"This is potentially a disruptive force in the industry, and it presents an opportunity for process innovation," Hudes says. "We have always thought of the biotech industry as one which had tons of innovation in the area of medicine and manufacturing and process sciences, but it now goes beyond that to innovation in the hardcore manufacturing processes."
Size matters
Exactly how large the biosimilars market will become is anyone's guess. IMS Health projects that biologics sales will surpass $200 billion by 2016, from essentially nothing a decade ago, and that is the base from which the biosimilars industry will spring. IMS Health says the biosimilars market may be only $1.9 billion to $2.6 billion by 2015 but foresees it being the fastest growing segment of biologics once the market takes hold.
A number of top-selling biologics, including Herceptin, Humalog, MabThera, Remicade and Aranesp, will lose product patent protection over the next 5 years. Many of these are blockbusters and have already been targeted by companies hoping to cash in on the growing demand worldwide for the life-extending benefits of some biologics and the growing frustrations over the prices they command.
Emerging markets, with outsized needs and supportive governments, may provide the low-hanging fruit for biosimilars sales. The U.S., however, will be what IMS Health says is the "cornerstone," accounting for up to 10% of the global market and $25 billion in sales by 2020.
Conquering the complexities of biologics to get to biosimilars
Amgen's Eich believes that getting to the manufacturing endpoint of biosimilars is a stepped process that begins with a comprehensive understanding of the reference product. That is needed for designing a "reproducible, repeatable molecule." To him, that includes understanding the relationship between the structure of the molecule and its function in the human body. He believes regulators will want manufacturers to know, and show, not only where there are structural differences, "but more importantly, what are the structural/function relationships so they can understand the effects that those differences may have in patients."
Bruce Leicher, general counsel and head of government affairs at Momenta, sees it similarly. Many companies may follow what he refers to as the European model of assuming there will be differences with their biosimilars and then showing they don't matter. Momenta is relying on technology that it says can thoroughly characterize an innovator product. Leicher says the technology will allow Momenta to control for differences in its cell lines so they are so "insignificant that the two products will be essentially the same." Momenta is shooting for a level of exactness that it believes will lead to "interchangeability" status for at least some of its products.
Interchangeability, when a follow-on biologic is close enough to be substituted for the innovator in the way that generic small-molecule drugs are today, is a hotly debated topic unto itself. The FDA has yet to say what it will take to demonstrate interchangeability, a status that would boost the marketability of a follow-on by giving doctors, patients and payers a sense of security at a discounted price.
If Momenta and other companies taking the path of highly characterizing innovator drugs can reach the results they are looking for, Leicher thinks the FDA will have to think hard whether it must require all biologics makers, including innovators, to reach such exacting standards. If it does, that would be another factor that would affect development and manufacturing.
Dialing in capacity
Momenta already has some experience characterizing molecules. It and Sandoz got FDA approval in 2010 for enoxaparin, a complex generic of Lovenox, the blockbuster blood thinner from Sanofi-Aventis ($SNY). The generic brought in more than $1 billion its first year, Kaundinya said. Momenta is developing other biosimilars with Baxter International ($BAX) as well as working on novel biologics. Momenta is very much a consumer of biopharmaceutical manufacturing, and so Momenta's Kaundinya has given it a lot of thought.
One of the questions that used to keep Kaundinya up at night was whether there would be enough manufacturing capacity globally to handle all of the biosimilars. The buildup of capacity in Asia has assuaged that fear, as has the improved productivity of mammalian culture systems. "What 5 to 10 years ago seemed to be a gram per liter of CHO manufacturing levels are now routinely 3- to 5-grams-per-liter capacity," he says. "That right away shrinks your need for capacity by three- to 5-fold."
There is also the potential provided by disposable bioreactor technology, which offers the possibility of keeping manufacturing costs lower, giving companies "enormous flexibility in the way they are committing their finances."
All of this has led the Momenta co-founder to his current position: "I don't think steel and mortar are going to be the limiting factor in getting these biologics to market."
These days, Kaundinya thinks more about how manufacturers will dial in and dial out capacity given that the number of biosimilars competitors for a particular biologic and their pricing could change demand quickly.
Research by Ronald Rader's Biotechnology Information Institute, for example, shows that companies have announced plans for 21 biosimilars and 12 "biobetters" of Roche's blockbuster Herceptin. There are another 21 biosimilars and 15 biobetters aiming to take on Roche's Rituxan. Not all of these will make it to market or be approved in any one market. But a biosimilars maker could get approval and quickly capture market share only to see much of it evaporate 6 months or a year later if more competitors make it through the approval process.
These kinds of external factors will put the production forecasting for biosimilars at odds with some of the traditional approaches. "Will they have to increase or shut down demand at short notice?" Kaundinya wonders. "That is something that we don't have answers to."
A reliable supply
When it comes to production capacity, another consideration that many biosimilars developers may have given little thought to is a reliable, ongoing supply. Given that many of the drug shortages in the U.S. have been of complex, sterile products, Eich thinks the FDA will want companies to not only show they can manufacture a follow-on biologic but also are able to tackle any problems head-on.
This requires understanding what regulators expect in terms of quality systems, good manufacturing practices and state-of-the-art technology. The agency also wants to know that companies "are focused on patient safety," Eich says. "I think it is both a commitment and an art form to be able to achieve a quality and reliable supply with biological medicines."
The patient-centric approach can become a factor in the event of a change in manufacturing, a site change or technology upgrade.
"If you do those things right, then you work backwards and you say what are the necessary steps, not just to submit to, but to work with the regulators on manufacturing changes," Eich explains. He said many biopharma folks don't understand that when a company makes a manufacturing change for drugs that are as sensitive as biologics, there is a risk assessment the manufacturer does independently, but also one done hand-in-hand with regulators.
"So you work back to understand what data you may need to generate to work with regulators to approve the change. All of that takes place long before the change is enacted so that it gives us a lot of confidence that the changes we make are always improving the product, improving the process, improving the service," Eich says. "It is not just when there is a manufacturing change. You have to do that every day."
He believes there is a steep learning curve to some of this and that companies like Amgen with the practical experience of tackling the complex issues of complex drugs are the ones most likely to succeed in the nascent biosimilars market.
All of these considerations support the position Vanden Boom at Hospira takes, that manufacturing cannot be isolated from all the other aspects of developing a biosimilar. To get manufacturing right takes a level of scientific expertise that can be a barrier to entry to those companies shooting to get a biosimilar to market. Vanden Boom has the experience to lean on because Hospira is one of the few companies manufacturing biosimilars for sale in Europe, where copycat biologics hit the market years ago.
Vanden Boom says Hospira has bolstered its internal expertise with a global network of specialized contract research partners in areas like virology and immunology. Partnerships make sense, he said, because they lower the barriers to entry, save money and allow companies to focus on their specific areas of expertise. "We've certainly benefited from our partnerships with Stada/Bioceuticals and Human Genome Sciences [now a unit of GlaxoSmithKline ($GSK)]," he said.
Hospira is also working hard to develop and expand its in-house expertise. In 2009, it acquired a biologics manufacturing facility in Croatia. The plant is manufacturing the white blood cell stimulator filgrastim that Hospira sells in Europe. "We believe the vertical integration we've achieved with filgrastim reinforces our commitment to the biosimilars space and enhances our credibility with customers," Vandem Boom said.
So what does the future hold?
As Kaundinya looks into the next 5 years, he sees the evolution of a new marketplace, the creation of an entirely novel business. "That means it comes with a lot of opportunities," he says. "That means it comes with a lot of uncertainty. It really comes down to nobody knows the rules."
And because the rules have yet to be set, Deloitte's Hudes says that companies need to be building a lot of flexibility into their manufacturing strategy.
"This is an inflection point for the industry and for the manufacturing side," Hudes says. "For a lot of reasons, we are going to want to emulate some of the practices that occurred in other industries that have more rapid cycle times and changeovers, the ones that went through the manufacturing revolution 20 years ago."
"I think we will see quite a bit of change as regulations come into focus and as practical experience comes into play," Hudes says. "Companies need flexible arrangements with flexible capacity."
-- Eric Palmer (email | Twitter)