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Expansion and concentration in the biosimilars market

Europe is the leader in the global biosimilars business. The prospects are excellent as the patents of many innovator biopharmaceuticals, including therapeutic antibodies, have reached or are about to reach patent expiry. The profitable, though difficult biosimilars market, is increasingly dominated by a handful of financially strong companies.

Experts agree that biosimilars or follow-on biologics, i.e. legally approved versions of an existing branded biologic (also referred to as innovator drug), will play an increasing role in the drug market. The revenues that pharmaceutical companies have obtained with innovator biopharmaceuticals have been continuously growing over the last years. In Germany alone, innovator product revenues have increased by around six per cent per year over the last few years. Several of these products have gone off patent and biosimilars are already on the market for three – somatotropin or growth hormone, filgrastim or G-CSF (granulocyte-colony stimulating factor) and erythropoietin or epoetin (better known as EPO). Over the next few years, the patents of some of the top-selling innovator biopharmaceuticals will expire, including Enbrel, Remicade, Rituxan or MabThera, Herceptin and Humira, which have achieved annual revenues of between four and six billion euros. The preparations for the production and approval of follow-on versions of these products has long been underway.

European market leadership

Table: Biosimilars that have been approved for sale in the EU © VfA-Bio
Unlike small-molecule generic drugs, i.e. chemical generic drugs, the production of biologically derived biosimilars takes place in living organisms and does not generate an exact replicate of the originator’s molecule. As it is virtually impossible to produce identical copies of bioproducts, biosimilar proteins are not approved as simple generics. Approval can only be based on comprehensive pre-clinical and clinical data which show that the biosimilars are extremely similar to the original drugs. The European Medicines Agency EMA leads the way internationally with its guidelines relating to the concept of follow-on versions of recombinant proteins. The guidelines have been amended on numerous occasions since 2003. No similar guidelines exist in the USA. It is worth noting that the American FDA has so far only granted marketing authorization to one protein biosimilar, and this only after a long legal dispute with Sandoz. The FDA only approved the growth hormone Omnitrope®, which was in fact the first biosimilar to be approved in Germany, as a “follow-on protein product” rather than a “generic biologic”. In contrast to the USA, the EU has to date approved 13 biosimilars (see Table). However, this only actually represents seven different drugs, as some of the 13 biosimilars are also marketed as second brands, i.e. drugs that are produced in the same production plant as the original, but sold under a different name through different distribution networks. The second brands are identical to the original drug and each can therefore be substituted for the other. In all other cases, current prescribing practice in Germany and other European countries prohibits the automatic substitution of an innovator drug or a biosimilar for another by a pharmacist if the prescribing physician has expressly stated the brand name of a product on the prescription. When a prescription contains a brand name, the pharmacist can only substitute the drug with the prescribing physician’s knowledge or explicit consent.

However, one must not get the impression that it is easy for biopharmaceutical producers to obtain marketing authorization for biosimilars from the EMA. As yet, there are no insulin biosimilars on the market, despite the fact that the patents of the innovator drugs have expired. Some companies voluntarily withdrew their approval applications as they were unable to provide the EMA with the requested information about production and efficacy on time. In addition, the EMA rejected an application for an interferon alpha-2a biosimilar after having inspected the comparative studies of the efficacy of the new drug with the reference drug.

Number of competitors falls

In order to promote the production of biosimilars – in the hope that greater competition will lead to price reductions in the extremely costly biopharmaceuticals market – the regulatory conditions for seeking approval for biosimilars are less complex than for innovator drugs. As a general rule, applicants are able to carry out shorter preclinical study programmes, and are exempt from clinical phase II trials for testing the therapy concept and determining the drug dose. When marketing authorization is sought for further indications, the biosimilar is not required to be tested for its efficacy in treating the new indications if the original drug is already approved for these indications. However, biosimilars must undergo testing in what is the most costly element of the entire approval process, i.e. clinical Phase III testing. To cite just one example, the Ulm-based generic drug producer ratiopharm had to carry out Phase I and Phase III studies with as many as 880 volunteers and patients before it receiving approval for Ratiograstim, a G-CSF biosimilar.

CHO cells in a culture dish. © T.T. Puck, 1994

The number of manufacturers and distributers listed in the Table suggests a greater diversity of competitors than actually exists. Following a number of acquisitions in the last few years, the European biosimilars market is now dominated by a few big companies: Sandoz is a subsidiary of the Swiss Novartis group that acquired Hexal in 2005; the Slovenian producer Lek is also part of Sandoz. ratiopharm, which used to be the largest German generic drug producer, was sold to Israeli Teva Pharmaceutical Industries in March 2010. Teva had previously acquired the Lithuanian contract manufacturer SICOR. Hospira is a big US generics producer that produces its bacterially synthesized G-CSF biosimilar in Croatia. The company’s CHO- (Chinese hamster ovary) derived epoetin biosimilar Retacrit (along with the second brand Silapo) is produced by Uetersen-located Norbitec, of which the German generic drug producer Stada is a shareholder. At present, Laupheim-based Rentschler Biotechnologie GmbH is the only independent German drug producer. Rentschler is a global leader in the contract production of active drug ingredients using mammalian cell cultures (notably CHO cells, see BIOPRO article “Cell culture technology: hamster cells and the production of biopharmaceuticals”) for big pharmaceutical companies.


The end of BioGeneriX

Only financially strong companies with huge experience in drug approval processes can afford the complex and costly development of biosimilars. In 2000, ratiopharm established its Mannheim-based subsidiary BioGenerix AG whose goal was to focus on the preclinical and clinical development of biosimilars. The company was highly successful in this area, and the first ratiopharm biosimilar, which contains the same ingredients as the original Amgen product Neupogen, was approved by the EMA in 2008 after a development time of only six years. Additional clinical Phase III studies, including some studies to test the efficacy of an epoetin biosimilar, were concluded and marketing approval applications were filed.

Schematic of an epoetin molecule with its carbohydrate chains © Institute of Immunology, Heidelberg

In the meantime, Ulm-based Merckle Biotec GmbH established a plant for the production of biopharmaceuticals, which enabled the company to work with the entire value creation chain within the Merckle group of companies, which also included the ratiopharm group. However, during the financial crisis in autumn 2008, the Merckle group experienced enormous setbacks, which eventually led to the sale of ratiopharm to Teva.

At this time, Teva, the largest generics producer in the world, was only a minor actor on the European market. The decision to acquire ratiopharm was made on the basis of the company’s objective of turning “ratiopharm into the hub for Teva’s European growth strategy”, as Shlomo Yanai, President and CEO of Teva put it. Teva is pursuing a completely new biosimilars strategy. In early 2009, Teva placed a G-CSF biosimilar on the Swiss market. This biosimilar – Tevagrastim – is identical to Ratiograstim and is - just like Ratiograstim - produced in the SICOR facilities, which are also owned by Teva. According to information published by the newspaper “Mannheimer Morgen”, there are plans to close down the Mannheim-based BioGeneriX subsidiary in early 2012; part of the company’s research has already been relocated to Ulm where it will be concentrated. Some of the 30 remaining  BioGeneriX employees have been offered jobs in Ulm.


Antibody biosimilars

The somatotropin and G-CSF biosimilars that have so far been approved are relatively small, simple proteins with no carbohydrate components. They are produced in bacterial cell cultures (natural G-CSF is, however, glycosylated). Epoetin is a protein with as few as 165 amino acids, but it has four carbohydrate chains that are important for its proper function. It is produced in mammalian cells, which makes the production process rather complicated. The epoetin derivatives currently on the market are all named after different Greek letters and differ from each other in their carbohydrate proportion. None of the derivatives is identical with the natural active ingredient.

Molecule model of an IgG antibody. © Institute of Immunology, Heidelberg

The production of antibodies which companies such as Teva believe will become blockbusters in the biosimilar business of the future, is even more complex than the production of somatotropin and G-CSF biosimilars. The largest group by far of biopharmaceuticals currently on the market are monoclonal antibodies. The patents of many of these biopharmaceuticals are due to expire in the near future. One such biopharmaceutical is Rituximab, a chimeric antibody against the CD20 surface antigen that is used for the therapy of malignant lymphomas and rheumatoid arthritis. Rituximab achieves annual revenues of more than six billion dollars. In Europe, where the drug is marketed as MabThera, the Rituximab patent is due to expire in 2014. With this date in mind, Teva is already conducting clinical studies to test its own antibody version for the treatment of non-Hodgkin lymphomas and rheumatoid arthritis in order to be prepared for the production of  the first “follow-on” antibody, subject to marketing authorization, that will allow it to carve out a leading position in the future biosimilar market. Teva has already signed a strategic partnership with the Swiss company Lonza, the world’s largest contract biopharmaceuticals company.


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