Despite how far we have come, there is still ample room to grow.
Biosimilars have come a long way since their initial entry in the U.S. on March 6, 2015. However, with a number of unanswered questions (such as pricing, availability, and interchangeability) and a lack of understanding in the marketplace, biosimilars still have so much opportunity to grow in prominence in the U.S.
What is a Biosimilar?
According to the FDA, biosimilars are a type of biological product that are “highly similar to an already FDA-approved biological product.” An interchangeable biological product, on the other hand, “in addition to meeting the biosimilarity standard, is expected to produce the same clinical result as the reference product in any given patient.”
Although there is a significant market for biosimilars in Europe, the U.S. is considered to be the largest market for biosimilars.
“Biosimilars are specialty drugs that are made out of biologics—or out of living organisms,” said Pankaj Mohan, CEO of Oncobiologics. “The way I look at it is these are very expensive, critical drugs, and its availability and affordability depends on how the biosimilar industry shapes up.”
Biosimilars are a way to reduce the cost of biologic drugs so that they are more affordable and widely available, Mohan said.
Only now entering the U.S. market, biosimilars have been introduced in Europe for some time. Although there is a significant market for biosimilars in Europe, the U.S. is considered to be the largest market for biosimilars.
A scientist at work in Oncobiologics’ integrated downstream process development labs. (Top image: Technicians ready a single-use bioreactor for operation.)
Cost
“There is a significant amount of political and social pressure that’s been driving the lower cost of healthcare in the U.S.,” Mohan explained.
Many consumers have voiced complaints regarding the cost of biosimilars—specifically that they do not have the same discount as generics.
Compared to the discount that small molecule generics can expect—which can be as much as 90 percent—typical discounts for biosimilars range between 20 and 40 percent.
“Biosimilars is a totally different category than small molecule generics,” said Mohan. “It’s a big technical hurdle to develop biosimilars and very complex to manufacture, and it takes a significant amount of investment to get regulatory approval. One has to do complete PK and at the same time has to do the most expensive part which is doing the phase 3 trials (which is not required for small molecule generics).
“The cost of developing a biosimilar is high. . . . It’s highly specialized, and with the investment that it needs, it falls in a totally different category than small molecule generics.”
In addition, there is only a small group of players who are working within the biosimilars space—from small, niche companies, such as Oncobiologics, to the biotech and pharmaceutical giants, such as Amgen and Pfizer.
Compared to the discount that small molecule generics can expect—which can be as much as 90 percent—typical discounts for biosimilars range between 20 and 40 percent.
Furthermore, only a small percent (5-8 percent) of the U.S. population takes specialty drugs, such as biosimilars.
“We do still have a significantly high drug cost—30 to 40 percent of the total cost of overall budget of drugs—which is why there’s significant pressure in the U.S. [to have biosimilars enter the U.S. market],” said Mohan. “The FDA has been approving these drugs [biosimilars] for launch and that would be a major opportunity for lowering the cost of healthcare.”
Manufacturing at Oncobiologics leverages single-use technology. Here, a technician prepares single-use tubing for sterile connections.
Keys to Success
The FDA sets an expectation for biosimilars that requires significant technical horse power to create a highly similar drug to the innovator drug.
“From our standpoint, if we meet that criteria for analytical similarity—to be highly similar—and then lead into phase 1 and phase 2 (and be successful), then the path [to FDA approval] is straightforward,” said Mohan. “I believe that there is a clear path that the FDA has laid out for biosimilars launch, because the nature of biologics requires high technical skill and (at the same time) significant investment.”
In addition to having a clear path to navigate down, there are three key fundamentals to a successful biosimilar operation, according to Mohan:
- Technical rigor
- High analytical similarity
- Reduced cost of development
“There is the top tier aspect of technical hurdle. For that, you need a highly-talented and experienced work force working in an infrastructure that drives successful complex development and manufacturing. The second is that it has have very high analytical similarity, which would require scientific rigor at the development stage so that it leads to high probability of clinical success. The third is to be able to reduce the cost of development.
“Development and manufacturing cost a lot, along with the clinical trial. So, a successful company—and that’s where our business model hones in—is a company that’s able to do the technical aspect and (at the same time) provide best in class pricing flexibility.”
According to Mohan, a major element of market penetration is competitive pricing.
A manufacturing engineer works with a 2000 L single-use bioreactor in the upstream production suite of Oncobiologics’ 20,000 sq. ft. manufacturing facility.
Pipeline
Every company selects the products in their pipeline for a variety of reasons. For Oncobiologics, most of its assets have been selected based on the following considerations:
- Market potential
- Their number of entry in the market space
- Partnerships
“We believe in partnering in a way that can dramatically help us reduce the cost of development, because it is a very expensive proposition as a small company to be able to fund all of these assets if we don’t partner,” said Mohan.
Oncobiologics picked Humira, for example, “because it was something that we needed to have,” Mohan explained.
Since there are a lot of people working on Humira, the Oncobiologics team tried to distinguish their product through product differentiation (having a unique formulation with lower site irritation and pain associated with the product), formulation pattern that will help the company navigate around AbbVie’s patent landscape, working with the FDA to obtain a phase 3 protocol that will allow them to seek both biosimilarity and interchangeability, as well as pricing flexibility.
“We believe that we are one of the first companies that will be entering into a phase 3 trial that may allow us to seek interchangeability as well,” said Mohan, referencing their Humira biosimilar.
Quality Control scientists prepare samples of a biosimilar product.
Challenges
When asked what the most significant challenge(s) is/are when developing a biosimilar, Mohan’s response was simple and said with a laugh: “The biggest challenge is money.”
Though, finances aren’t the only challenge a biosimilar company will face.
According to Mohan, some of the greatest challenges that biosimilar operations must address are:
- Investments
- Finding the right people/team that have the scientific rigor and capabilities that these complex programs require
- Planning the infrastructure: in-house vs. outsourcing
- Partner to help reduce the cost of development as much as you can
- Provide the best-in-class pricing flexibility
Embracing Innovations
“We have, in house, the latest state-of-the-art single-use technologies at the largest scale possible, which is a 2,000-liter scale. We have built this in an infrastructure here, which has the latest state-of-the-art GMP manufacturing at a very low capital base,” said Mohan. “By instituting a technology, such as single-use technology, we are able to drive down cost of manufacturing tremendously.
“At the same time, most of the smaller, niche players—like us—actually outsource manufacturing which is a significant cost burden. If you look at the largest companies, they have development at one place and manufacturing at another, which leads to significant technology transfer and cost.”
Experts now expect the worldwide sales of monoclonal antibody biosimilars to reach approximately $56.5 billion in 2030. In 2014, biologics reached $175 billion in sales, which is rising rapidly and has come close to a quarter trillion dollars in 2015.
Oncobiologic has demonstrated a six-week technology transfer time. Compared to companies who outsource their manufacturing operations, Oncobiologic’s timeframe is considerably shorter.
“We have in-house manufacturing, in-house development, and we don’t outsource the drug substance manufacturing part of our manufacturing,” said Mohan. “Given that we have a large pharma capability in a small biotech culture with a low capital cost of single-use technology—all of this adds up to give us a lower cost of manufactured products.”
The process of identifying a DNA to then entering into a phase 1 trial takes about two years, Mohan said.
It is less time for a smaller company, such as Oncobiologics, since they do not have to deal with technology transfer in the development portion of manufacturing, like bigger pharma companies do. Since their operations are small and all in-house, they are able to move more swiftly than larger operations.
Opportunities for Growth
Biosimilars are the next phase of growth for the biopharmaceutical sector, according to Mohan.
“It is a major element of biopharmaceutical growth because, as you know, the R&D productivity for innovative drugs are not as high. There aren’t multiple new drugs coming from the biologic space every year. The reason large pharmaceutical and biotech have focused on biosimilars is because they’re expecting a drop in their sales. . . . People are jumping into this because this is a highly lucrative sector at this point in time. There’s an evergreen pipeline of drugs that are going to get off patent,” said Mohan.
Experts now expect the worldwide sales of monoclonal antibody biosimilars to reach approximately $56.5 billion in 2030. In 2014, biologics reached $175 billion in sales, which is rising rapidly and has come close to a quarter trillion dollars in 2015.
“There is a huge dynamic in play here, where there’s significant financial gain. At the same time, it’s a club that is exclusive because it’s a significant technical hurdle,” said Mohan. “But those companies that are establishing themselves here are here for the long-term.”
This feature story can also be found in the November/December 2016 issue of Pharmaceutical Processing.
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Filed Under: Drug Discovery
