Is the biogenerics battle about to heat up?

With patents set to expire on some of the early recombinant protein therapeutics, Datamonitor reports, many generic companies are honing their capabilities to produce their own versions of the product

By Editor on Feb 22, 2006

With patents set to expire on some of the early recombinant protein therapeutics, Datamonitor reports, many generic companies are honing their capabilities to produce their own versions of the products. And the high cost of biotech drugs makes them prime targets for cost-cutting measures, the group says.

At immediate risk from biogenerics, says Datamonitor's pharmaceutical markets analyst David Evans, are insulin, human growth factor, epoetin, colony stimulating factors (CSFs), interferon alpha and interferon beta.

Espicom Business Intelligence reports that biological drugs account for 10% to 15% of the world pharmaceutical market, about $30 billion in the US alone. Datamonitor's analysis concludes that global sales of biologics by top pharma and biotech companies reached $56.2 billion in 2004, up 18.3% form 2003.

And the biologicals sector is outperforming the pharma industry as a whole, Espicom says. But the development of the biogeneric sector faces significant obstacles, the group predicts.

While generic versions of off-patent chemical-based products have had great success, biogenerics, Espicom says, are expensive to develop and the nature of the current regulatory system precludes approval in most cases, particularly in the US, where the FDA has yet to issue detailed guidance on biogenerics.

Lack of a regulatory pathway, Datamonitor says, led to refusals to approve Sandoz's growth hormone Omnitrope in the US and in Europe. But the group reports that, especially in the EU, regulatory authorities are making progress to enable a first generation of biogenerics.

The combined size of this market makes it a tempting target, and pressure from generics companies and from governments has driven the development of regulatory pathways, Evans says.

In 2003, the European Commission created a legal framework for biosimilars, allowing the EMEA to move forward and publish several draft guidelines, including specific clinical and non-clinical data requirements for four product types insulin, human growth factor, epoetin and CSFs.

In the US, Datamonitor says, branded opposition has had a much greater influence at slowing regulatory reform. Evans says Congress has yet to create legislation for biogenerics and the FDA has been unwilling to use the controversial 505(b)(2) pathway to approve generic versions of growth hormone and insulin.

Datamonitor predicts biogenerics could be on the market as early as 2006 in the EU and by 2009 in the US, putting biologic products with combined global sales of $20 billion in 2004 at risk. But because the nature of biologics virtually rules out exact generic copies, the group points out that developing and commercializing biogenerics is wrought with complexity and expense.

The branded pharma community questions whether if a protein cannot be absolutely characterized, it can be considered an equivalent to the originator's product and approved without full clinical trials.

In Europe, Datamonitor says, the compromise of a full preclinical data package and relatively small clinical trials (at least 300 people for epoetin, for example) appears to have been accepted. But in the US, the group reports, branded pharma is campaigning for tighter controls, citing problems with red cell aplasia that affected patients taking Johnson & Johnson's Eprex (epoetin) after only a minor change in its manufacturing procedure.

Despite the obstacles, Evans predicts sales of the six key biogeneric product types will reach $2.2 billion by 2010 in the US and five major EU markets. Datamonitor points out that second-generation branded products, such as Aranesp (darbepoetin alpha) and insulin analogs, may rapidly diminish the market for first-generation biogenerics, but could themselves ultimately become generics targets.

To be successful, biogenerics makers will have to move beyond typical generic company strengths, Evans says. New skills will be required in biotechnology, manufacturing, clinical trials, regulatory compliance, pharmacovigilance testing and marketing, he points out.

All in all, generics companies will have to create an entirely new business model for biogenerics in many ways, closer to the branded biotech model, Evans says.

And the investment to put a biogeneric through the necessary clinical trials will be considerable, Datamonitor predicts, requiring strong financial backing and regulatory expertise expected at least initially from only a few top biogeneric players: Sandoz, Teva, BioPartners, ratiopharm (through its subsidiary BioGenerix) and Stada (through its affiliate Bioceuticals).

But the group is quick to point out that branded pharma will make every effort to protect their franchises through legal opposition, as well as lifecycle management strategies, such as additional patent protection and second-generation products or advanced delivery methods.

The feeling is that we have not yet even seen the start of the key confrontations in biogenerics, Evans says. But as generics products approach the market, the real battles will begin.

To learn more about Datamonitor's research, visit www.datamonitor.com .

And if you are interested in generics sales and marketing strategies, be sure to register for eyeforpharma's 2nd annual Generics Marketing and Sales Summit Europe 2006 being held in Berlin, May 16-17. To learn more, visit www.eyeforpharma.com/generics2006 .