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Dec 1, 2005 (Vol. 25, No. 21)

Biosimilars Shake up the Biologics Market

Take the Necessary Steps to Prepare or Risk Being Left Behind

  • Loss of patent protection now leads to a rapid decrease in sales for the innovators' branded small molecule drugs in the U.S. and, to a lesser extent, Europe. Exceptions in the U.S. include new branded indications (three years additional exclusivity) and novel delivery systems (exclusivity for life of patent if formulation is not duplicated by generic competitors).

    Thus far, companies attempting to create copies of biological productsso-called biosimilars (sometimes called biogenerics)have been held up by the lack of defined regulatory pathways in the U.S. and Europe, and/or the unwillingness of regulators to use those already available.

    However, substantial pressures could lead to the approval and use of biosimilars in the U. S. and EU in the near term. These include:

    The European Medicines Agency's (EMEA) recent guidelines outlining what's needed in a biosimilar application represent a major step toward establishing approval procedures in Europe and send a strong message about Europe's political will to do so.

    An approved regulatory pathway for biosimilars will expose the multi-billion dollar therapeutic protein market to its most significant competition yet, potentially leading to a shift in the economics and prescribing patterns for such drugs.

    The guidelines haven't answered all the outstanding questions. But one thing is certain: biopharma companies cannot afford to sit back and wait. Those who aren't preparing for the changes now will be left behind.

    The U.S. FDA has been hesitant about creating a biosimilar pathway. But progress in Europe, coupled with the cost-pressures created by the forthcoming Medical Prescription Drug Benefit, make it increasingly likely that an approval process will be implemented soon.

    These were the conclusions drawn by a panel of legal and regulatory experts during a recent audio conference, "Biosimilars Are Coming: What You Need To Know," organized by Windhover Information (www.windhover. com).

    A number of panelists view the emergence of biosimilars as the biggest shake-up in the $45 billion biologics market, which now represents about 12% of total drug sales, up from about 1% in the late 1980s. Products that lack patent protection may soon be faced with substantial competition from "Follow-on Biologics" (FOBs), the term applied to products (biosimilars or generics) intended to be replacements or substitutes for an innovator's branded product.

    The issue of biosimilars represents significant challenges to the continued success of biopharma companies in the U.S. and Western Europe. Although Japan's Ministry of Health and Welfare recently issued a new regulation affecting the documentation for approval of a new generic small molecule drug with one active ingredient, the generic drug market in Japan has been slow to develop. Due to rising medical costs, the Japanese government is seeking lower-cost alternatives. Broader use of generic drugs, potentially including FOBs at some future time, would contribute to that goal.

    Among major biopharmaceutical companies, only Sandoz (Holzkirchen, Germany), a generic division of Novartis, is known to have submitted applications for approval of a biosimilar anywhere in the world. Sandoz sued the FDA and the Department of Health and Human Services in September, and the EMEA in January 2004, to force a decision on Omnitrope, their follow-on version of hGH. Omnitrope is approved in Australia.

    The FDA has yet to respond to the Sandoz complaint. The FDA maintains that it has the authority to issue 505(b)(2) approvals for all products approved under the Food, Drug and Cosmetics Act (FDC&A) and has done so for a number of biologic drugs (menotropins, glucagon, calcitonin). In general, the FDA has said that the issue of FOBs "presents a lot of unique and difficult questions, and we remain committed to working through all these issues in a timely manner."

    BioPartners (Zug, Switzerland) filed a dossier with the EMEA for Valtropin (somatropin), a recombinant human growth hormone developed in conjunction with Korea's LG Life Sciences. BioPartners previously filed with the EMEA its biosimilar recombinant interferon alpha for the treatment of hepatitis C.

    Although many of the key questions and issues will only be resolved case-by-case, all the speakers at the Windhover conference expressed optimism that the interests of all stakeholders in the development, approval, commercialization, and use of biologics can be met.

  • The European Regulatory Scene

    Some observers of the European regulatory scene expected that the EMEA might have begun to approve FOBs last month. As this went to press, we have not seen any evidence of that.

    The EMEA is co-sponsoring a workshop on biosimilars, organized by the Drug Information Association (DIA) scheduled for December 89 in Paris. Speakers at the workshop may provide insights about the potential timing of approvals and the unresolved issues and questions.

    Linda Horton, a partner in the Brussels office of global law firm Hogan & Hartson, spoke on the proposed EMEA Guidelines and draft annexes for the approval of biosimilars, issued in May 2005. The comment period closed October 31.

    The proposed guideline is accompanied by four annexes providing specific guidance on approval requirements for erythropoietin (EPO), granulocyte-colony stimulating factor, insulin, and somatropin (hGH). Horton pointed out that the requirements are hefty, especially in relation to those for generics of small molecule drugs. The requirements include: full quality dossier, extensive nonclinical and clinical studies, immunogenicity studies, extensive comparability, and comparative pharmacokinetics.

    The application should include a "risk specification" describing possible safety issues due to the manufacturing process being different from that of the innovator and a pharmacovigilance plan in accord with EU legislation/guidelines. The EMEA will strictly monitor compliance and is preparing a penalties regulation in case of non-compliance.

    Each application will be handled on a case-by-case basis; early discussions with the EMEA are encouraged. The same reference product should be used for all aspects of the application. Clinical studies of the biosimilar should be performed using product made by the final manufacturing process, which Horton says is a difficult requirement.

    The guidelines were prompted by political pressure for access to cheaper biologics as well as scientific pressure. Several applications are pending from BioPartners and Sandoz. The EMEA issued a favorable opinion of Omnitrope in mid-2003, but has not approved the product.

    Horton thinks the guidelines likely represent an amalgamation or compromise of the content of the pending applications. She believes the guidelines mean that the EMEA is serious about getting biosimilars approved and wants to do so in the short-term.

    Despite all the thought that has gone into the proposed guidelines, Horton identified some unanswered questions and issues: Can regulators refer to innovator data files and do they intend to? Is the safety barrier sufficiently high, particularly if a conditional approval requires that safety be shown post-marketing?

    Looking at EPO, for example, dose-to-dose variability may be critical. Will product substitution be allowed? This has been decided at the member state level so far, but she expects the EMEA to take a stance. Will individual patient consent be needed where premarket trials were small and there may be some unresolved risks?

    Horton also expressed concern about some inconsistencies. For example, the EPO annex calls for substantial clinical studies, including at least 12 months immunogenicity data plus post-market reporting. Depending on the size of the studies, relatively infrequent adverse effects may not be observed.

    The EMEA is also proposing to excuse EPO biosimilars from many safety studies carried out by the innovator companies. Horton says it is more worrying that the guideline requires testing on just one indication to get approval of all authorized indications. Despite the shortcomings, Horton believes these guidelines, or something like them, will be approved.

    The potential approval of biosimilars may not automatically lead to widespread switching to biosimilars. Perceptions of safety may play out against price, especially as biologics become more complex. For a range of economic reasons, the price of biosimilars is not likely to be much lower than the innovator's original drug.

    Reimbursement of biosimilars and switching from the innovator product will be decided by each country. Doctors and patients may perceive biosimilars to be less safe. Innovators can be expected to leverage their reputation, brand, and safety data to discourage switching.

    Horton asked rhetorically about the utility of the regulatory pathway offered by the guidelines. Given the stringent data requirements, risks, and uncertainties around post-approval marketing, will potential competitors be better off developing improved biologics, distinguishable from the original in dosage convenience?

  • U.S. Regulatory Environment

    Gillian Woollett, Ph.D., chief scientist of Novitt & Engel (Washington, D.C.), spoke about the situation in the U.S. There is no comprehensive pathway for substitutable FOBs, although the Hatch-Waxman Act applies to some biologics, the so-called biologic drugs that are approved under the Food Drug and Cosmetic Act. These are mainly hormones (e.g., hGH, insulin, and others), but most biologics are licensed under the Public Health Service Act. While follow-ons can be approved already, and have been (e.g., interferons), they cannot be designated as substitutable.

    Dr. Woollett believes that the combination of the biotech industry's success, the costly products, and the associated pressures on the medical system make new legislation for the approval of substitutable PHS Act FOBs inevitable. Existing biotech product portfolios whose patents have expired are at risk.

    Many innovator companies have not planned for their own success. Their high-margin, lifesaving products are receiving substantial economic and political attention. Although traditional generic companies have not been convincing in their demands to apply the generic drug model (ANDA approvals) to most biologics, experienced companies have taken credible positions in support of FOBs based on application of sound science leveraging modern technologies.

    A fair, data-driven, economically viable solution will be essential, Dr. Woolett believes. She also contends that the experience and resources of innovators will give them advantages. They can meet the regulatory requirements, but can be efficient only if regulations are consistent and predictable.

    The developers of FOBs, including second-generation products, must be particularly efficient in overcoming barriers to be competitive. Although better technology helps, it provides no guarantee.

    After posing the question as to whether a new statue for the approval of FOBs could be a winwin for all parties, Dr. Wollett insisted that to achieve this all biologics would be held to the same high standards. Biopharmaceutical companies would benefit from regulations based on state-of-the-art science. Intellectual property (IP) rights do not have to conflict with patient access.

    Compromises on IP, liability reform, and regulatory burdens could make FOBs a net benefit for the industry, as well as to patients and healthcare systems around the world.

  • Importance of New Technology

    The capability to characterize and duplicate complex biological materials, including mixtures, may emerge as a critical success factor in the development of FOBs and copies of other biological drugs.

    Momenta Pharmaceuticals (Cambridge, MA), which has technology licensed from MIT for the sequencing of complex sugars and characterization of complex mixtures, is an example. The company has applied the technology to develop M-Enoxaparin, a generic version of Lovenox, a low molecular weight heparin product.

    Lovenox is distinct from the protein drugs at the center of the biologics debate because it is a complex mixture composed of linear polysaccharides and as a result does not have the immunogenicity or folding issues associated with proteins.

    Momenta chose what might be one of the most difficult challenges for an ANDA. Enoxaparin sodium, the active ingredient in Lovenox and M-Enoxaparin, is obtained by alkaline depolymerization of heparin benzyl ester derived from porcine intestinal mucosa. The average molecular weight of the many structures that make up enoxaparin is about 4,500 Daltons, with individual chains ranging from less than 2,000 Daltons to over 8,000 Daltons. Only 1525% of the chains in enoxaparin sodium include the structures that are responsible for anticoagulation.

    Alan Crane, president and CEO, says Momenta took on the challenge because it has a better capability than others to characterize complex mixtures such as heparins. "We believe that our patented technology has characterized Lovenox and demonstrated that M-Enoxaparin contains the same active ingredients." Given that no two batches are either identical or as similar as two batches of small molecules, consistency must be ensured by creating a generic product that takes into account the batch-to-batch variability of the innovator product.

    According to Crane, Momenta's technology has enabled the company to meet the requirements for the filing of an ANDA. A generic must demonstrate therapeutic equivalence to the branded drug, which requires the same active ingredients, same route of administration, dosage form and strength(s), and bioequivalence, which enables an FDA "A-rated" substitutable generic.

    Momenta, in collaboration with Sandoz, submitted an ANDA for M-Enoxaparin, a generic equivalent to Lovenox, in August. Approval would enable the companies to seek a share of the U.S. sales. Worldwide sales of Lovenox were about $2.4 billion in 2004.

    Momenta has the potential to apply its technology to characterize glycoproteins, potentially creating an even larger business opportunity. The protein/antibody market is projected to grow to over $60 billion by 2010.

    Nine of the top-ten marketed proteins are glycosylated, which determines critical product properties. This includes physical properties such as protein folding, stability phosphorylation, and receptor binding, as well as clinical properties such as efficacy, safety, tissue targeting, half-life, and immunogenicity.

  • Industry Perspective

    Industry leaders speaking at a press conference last month in London were considerably less optimistic about the timing of approvals of biosimilars in the U.S. and Europe. Jim Greenwood, president and CEO of the U.S. Biotechnology Industry Organization, said the legal and regulatory framework for biosimilars in the U.S. was far from ready.

    "I think we are probably several years away. There are certainly those in Congress who are advocating a pathway for generics, but there is a fairly widespread understanding in Congress that biologicals are not the same as small molecules. It is quite a different thing to try to produce a biosimilar. Even tiny variations in structure can stimulate immune responses in patients."

    Simon Best, the incoming chairman of Britain's BioIndustry Association, said that preparations for biogenerics were more advanced in Europe but that even there nothing was imminent. "You might see something on the market in Europe a bit quicker, but my hunch is that would be still be two to three years away."

    A "Follow-on Biologics" conference will be held on December 1214 in New York City. The conference is co-sponsored by the FDA and the New York Academy of Sciences, in collaboration with the National Institute of Standards and Technology.

    The goal of the meeting is to address the scientific issues associated with the characterization and demonstration of similarity of protein pharmaceutical products. The meeting will provide an overview of currently available analytical methodologies and technologies as well as perspectives on future technologies.

    The focus will be on the use of analytical techniques to characterize follow-on biologics, and on the effect of the fermentation and purification processes on product quality attributes. The meeting will also address the challenges to characterizing and comparing proteins in the absence of reference standards for the active pharmaceutical ingredient.



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