BIOSIMILAR INDUSTRY

• Introduction to Biosimilar
• Factors contributing to rapid growth of Biosimilar sector.

A decade ago, the global pharmaceutical market was dominated by small molecule drugs. However, complex molecule drugs or biologics have now gained a significant market share. In 2019, it was not small molecule but a biologic, Humira (adalimumab), which clocked sale of US$ 19.9 Bn and become the top selling drug by revenue. The success of biologics reflects their ability to treat previously untraceable diseases, like certain types of cancer and autoimmune, and diabetes with better existing alternatives and fewer side effects. But this rare nature of treating chronic diseases and associated high R&D cost has resulted in biologics to be extremely expensive, with the most expensive biologics costing more than US$ 700,000 for a full year treatment. As a result, the high cost of biologics and their expiring patents have opened the doors to alternatives like biosimilars, a highly similar copy of the original product.

Biosimilar is a biologic medical product that is ‘similar’ to a licensed biologic product manufactured by another company and does not have any clinically meaningful difference in terms of safety, purity, and effectiveness from the reference product. It must be officially approved and can only be manufactured and sold after the reference product’s patent expires. Biosimilars are often used to prevent, treat, or cure a critical illness like cancer, chronic kidney diseases, rheumatism, etc. Biologics are made by or from living cells through a highly complex manufacturing process. They have complex structures and must be monitored carefully, as they are sensitive to changes in their manufacturing process. Biosimilars were first developed using recombinant techniques to copy or improve on naturally occurring complex peptides proteins and glycoproteins. Over time therapeutic or diagnostic agents were produced by manipulation of DNA in bacteria, yeast, or mammalian cells to produce more complex products like monoclonal antibodies. Like biologics, biosimilars are produced through living organisms.

Biologics vs Biosimilars

Biologics:

Total Time: 12 years

Total Cost: US$ 1.0 bn+

Biosimilar:

Total Time: 10 years

Total Cost: US$ 150 Mn ~ US$ 250 Mn

Source: Televisory Research, NH I&S Research Centre

The global biologics & biosimilars market was dominated by original biologics in 2015, with biosimilars accounting for a small share of US$ 2.7 Bn or just 1.3%. Now global biosimilar market has reached about US$ 6.7 Bn in 2019 and is expected to grow to US$ 56.76 Bn by 2027, at a CAGR of 30.5% (Source: Reports and data). Markets & Markets, a global research company, has also estimated global biosimilars market at US$ 11.8 Bn in 2020, which is expected to reach US$ 35.7 Bn by 2025, increasing at a CAGR of 24.7%. In 2019, Europe accounted for the largest share of biosimilar market and is expected to maintain its position also in 2020.

For the last few years, industry has experienced a significant growth, attributed to the rising incidence of chronic diseases, and increasing demand for biosimilar drugs due to its cost-effectiveness. The price of biosimilars is about 20-50% lower than its reference biologic, which leads to greater access to these drugs and significantly reduces the cost of healthcare in many countries. According to the article published by the Biosimilars Council, “The launch of new biosimilars over the next decade could save consumers as much as US$ 250 billion and boost access to biologic treatments for an additional 1.2 million patients by 2025”.

However, the key factor, that would drive rapid growth of biosimilars market in next few years, is the expiry of major biologics patents by 2030. A Biosimilar can be produced and sold only after the patent of its reference biologic expires. The original biologics currently available in the market were awarded patents for 10-12 years, many of which are going to expire in next few years. It is estimated that biologics accounting for notable portion of sales are facing patent expiration by 2020, providing a significant opportunity for the biosimilar industry.

Unlike generic drugs, which are the exact copies of their reference drug, biosimilars are only similar to their reference biologic products, therefore regulations and guidelines are required to analyse and establish the purity, safety, efficacy, consistency and structural similarity to its reference biologic product. The uptake of biosimilars has varied in different geographies depending on the regulatory approvals, prescriber support and patient awareness. The biosimilar market in Europe is among the most developed, with EMA approving its first drug back in 2006, whereas the US, the largest market for biologics, approved the first biosimilar in 2015. EMA has approved more than 59 biosimilars and US FDA has approved 27 biosimilars till December 2019, with only 12 currently on market.  

Expiry of patents of several biologics drugs provides an opportunity to other pharmaceutical companies to develop biosimilars. Furthermore, due to the reduced development and production costs, and time of approval for market entry, it helps the pharmaceutical company to enter a domain which was earlier protected by patents and carve a niche for themselves. Many players, from pharmaceutical giants to new age biotechnological firms, have entered the race for biosimilar development backed by extensive capital infusion. Leading biosimilar developers are gaining experience in taking biosimilar to regulatory approvals in different countries. Mergers and partnerships among players have helped them leverage their expertise in biosimilar development, manufacturing, and distribution.

Globally, over 200 biosimilars, which are being developed by about 70 companies for more than 50 biologics, are in various phases of development (Source: MP Advisor). The Oncology segment is expected to increase at a higher CAGR of 31.3% during 2020-2027, reaching US$ 23.7 Bn (Source: Reports Data ). Emerging economies such a China & India is likely offer tremendous growth opportunities for biosimilars players in the next few years. Asia Pacific biosimilar market is expected to increase at a CAGR of 36.6% from 2020 to 2027, owing to its untapped market potential. It is anticipated that it is likely to capture 32.8% of global biosimilar market by 2027. Europe has emerged as biggest market for Biosimilar till now and is growing at a steady rate. The US market for the biosimilar is still at a nascent stage compared to European countries given the fact that FDA had been quite slow with its approval and acceptance of biosimilars. But in 2019, it has approved 11 biosimilars. This changing stance of FDA and further any revised version on biosimilar guidelines will help in biosimilar uptick in the US. Since most of the major biologics are about to expire in the near future, partnerships for co-developing and commercializing biosimilars will play a crucial role, as players in the industry would want to exploit their ‘first mover’ advantage.