On October 19, 2010, home grown Biotech Company Biocon, based in the IT heartland – Bangalore created a stir in Industry by inking an interesting international corporate business deal with the largest global pharmaceutical company – Pfizer. The deal will bring to Biocon a total sum of US $350 million and enable Pfizer to globally commercialize Biocon’s biosimilar (generic versions of biotechnology medicines) human recombinant insulin and three insulin analogues.
Before this deal, Sanofi-Pasteur, the vaccine business unit of the global major Sanofi-aventis had acquired Shantha Biotech, located at Hyderabad for a sum of Rs 3,750 Crore, in July 2009.
Just a year before the above acquisition in india, on December 11, 2008, Reuters reported, just two days after Merck announced a major push into biosimilar medicines; Eli Lilly signaled similar aspirations. This report, at that time, raised many eyebrows in the global pharmaceutical industry, as it was in the midst of a raging scientific debate on the appropriate regulatory pathways for biosimilar drugs. Be that as it may, many felt that this announcement ushered in the beginning of a new era. An era of intense future competition with biosimilar drugs in the global market, with immense commercial interest. On October 19, 2010 the biosimilar deal between Biocon and Pfizer vindicated this point.
Increasing global interest on biosimilar drugs:
Globally, the scenario for biosimilars started heating up when Merck announced that the company expects to have at least 5 biosimilars in the late stage development by 2012. The announcement of both Merck and Eli Lilly surprised many, as the largest pharmaceutical market of the world – the U.S.A, at that time, was yet to approve the regulatory pathway for biosimilar medicines. However, along with the recent healthcare reform by the Obama administration, the regulatory pathway for biosimilar drugs has now been clearly charted by the US FDA. In the developed world, European Union (EU) had taken a lead towards this direction by putting a robust system in place, way back in 2003.
What then prompts the research based global pharmaceutical companies like Pfizer, Sanofi-aventis, Merck and Eli Lilly to step into the arena of Biosimilar medicines? Is it gradual drying up research pipeline together with skyrocketing cost of global R&D initiatives?
The future global business potential of Biosimilar medicines:
Currently, over 150 different biologic medicines are available in the global pharmaceutical market. However, the low cost biosimilar drugs are available in just around 11 countries of the world, India being one of them. Supporters of biosimilar medicines are indeed swelling as time passes by. At present, the key global players are Sandoz (Novartis), Teva, BioPartners, BioGenerix (Ratiopharm) and Bioceuticals (Stada). With the entry of pharmaceutical majors like, Pfizer, Sanofi-aventis, Merck and Eli Lilly, the global biosimilar market is expected to develop at a much faster pace than ever before. Removal of regulatory hurdles for the marketing approval of such drugs in the US – the largest pharmaceutical market of the world, will be the key growth driver.
Recently, the EU has approved Sandoz’s (Novartis) Filgrastim (Neupogen brand of Amgen), which is prescribed for the treatment of Neutropenia. With Filgrastim, Sandoz will now have 3 Biosimilar products in its portfolio.
Global Market Potential of Biosimilar Drugs:
The biosimilar drug market in the world is estimated to be around U.S. $ 16 billion by 2011. Currently, off-patent biologic blockbusters including Erythropoietin offer an excellent commercial opportunity in this category. By 2013, about 10 branded biologics with a total turnover of around U.S. $ 15 billion will go off-patent, throwing open greater opportunity for the growth of biosimilar drugs internationally.
Biosimilar Drugs in India:
Sales of biosimilar drugs in India are estimated to be around U.S. $ 4 billion by 2011 with scorching pace of growth driven by both local and global demands.
Recombinant vaccines, erythropoietin, recombinant insulin, monoclonal antibody, interferon alpha, granulocyte cell stimulating factor like products are now manufactured by a number of domestic biotech companies like Biocon, Panacea Biotech, Wockhardt, Emcure, Shantha Biotech, Bharat Biotech, Serum Institute of India, Dr. Reddy’s, Ranbaxy, etc. The ultimate objective of all these Indian companies will be to get regulatory approval of these products in the US and the EU either on their own or through collaborative initiatives.
It is worth mentioning here that to give a fillip to the Biotech Industry in India; the National Biotechnology Board was set up by the Government of India under the Ministry of Science and Technology way back in 1982. The Department of Biotechnology (DBT) came into existence in 1986. The DBT now spends around US$ 200 million annually to develop biotech resources in the country and have been making reasonably good progress. The DBT is reported to have undertaken an initiative for quite some time to prepare regulatory guidelines for Biosimilar Drugs, which is expected to conform to international quality and patients’ safety standards.
Steps taken by the Indian pharmaceutical companies:
Biosimilar version of Rituxan (Rituximab) of Roche used in the treatment of Non-Hodgkin’s lymphoma has already been developed by DRL in India. Last year Rituxan clocked a turnover of over US$ 2 billion. DRL also has developed filgastrim of Amgen, which enhances production of white blood-cell by the body, and markets the product as Grafeel in India. Similarly Ranbaxy has collaborated with Zenotech Laboratories to manufacture G-CSF.
On the other hand Glenmark is planning to come out with its first biotech product by 2011 from its biological research establishment located in Switzerland.
The focus is on Oncology:
Many domestic Indian pharmaceutical companies are targeting Oncology disease area for developing biosimilar drugs, which is estimated to be the largest segment with a value turnover of over US$ 55 billion by the end of 2010 growing over 17%. As per recent reports about 8 million deaths take place all over the world per year due to cancer. May be for this reason the research pipeline of NMEs is dominated by oncology with global pharmaceutical majors’ sharp R&D focus and research spend on this particular therapy area. About 50 NMEs for the treatment of cancer are expected to be launched globally by 2015.
Current size of the Indian oncology market is around US$ 18.6 million, which is expected to be over US$ 50 million by the end of 2010; the main reason being all these are and will be quite expensive products.
A trigger point for more collaborative initiatives:
It is expected that the recent Pfizer – Biocon deal will trigger many other collaborative initiatives between the global and the local pharmaceutical companies.
Among India biotech companies, Reliance Life Sciences has already marketed Recombinant Erythropoietin, Recombinant Granulocyte Colony Stimulating Factor, Recombinant Interferon Alpha and Recombinant tissue plasminogen activator. This company has been reported to have the richest pipeline of biosimilar drugs in India. Companies like Wockhardt, Lupin, DRL and Intas Biopharmaceuticals are also in the process of developing an interesting portfolio of biosimilar drugs in India to fully encash the fast growing global opportunities.
Biosimilar global business model will fast gain ground:
Many large research-based global pharmaceutical companies, after having encountered the ‘patent cliff’, are now looking at the generic and biosimilar businesses, in a mega scale, in the emerging markets of the world, like India. Our country has witnessed major acquisitions like, Ranabaxy, Shantha Biotech and Piramal Healthcare by Daiichi Sankyo of Japan, Sanofi-aventis of France and Abbott of USA, respectively. We have also seen collaborative initiatives of large global companies like, GSK, AstraZeneca, and Pfizer with Indian companies like DRL, Aurobindo, Claris, Torrent, Zydus Cadilla, Strides Arcolab and now Biocon to reach out to the fast growing global generic and biosimilar drugs markets.
This trend further gained momentum when immediately after Biocon deal early this week, on October 21, 2010, Pfizer strengthened its footprints in the global generics market with yet another acquisition of 40% stake in Laboratorio Teuto Brasilieiro of Brazil with US $240 million to develop and globally commercialize their generic portfolio.
Conclusion:
All said and done, the recent international deal of Pfizer and Biocon to globally commercialize four biosimilar insulin and analogues, developed by the later in India, does signal a new global status for the Indian biosimilar drugs to the pharma MNCs, who were vocal critics of such drugs developed in India, until recently.
Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.