December 1, 2016 (Vol. 36, No. 21)
Eric S. S. Langer President and Managing Partner BioPlan Associates
More and More Firms Are Setting Their Sights on Genuine, Major Market Acceptable Biosimilars
Bioprocessing in China, particularly manufacture of biopharmaceutical products, has been on a trajectory for rapid growth. Besides developing a domestic biopharmaceutical manufacturing base to serve its own very large population, Chinese biopharmaceutical companies, often aided by central and regional governments, are increasingly preparing to become major global suppliers, including manufacturing to the GMP standards of highly regulated major markets, e.g., U.S. and EU.
For most biologics in China today, this involves what are sometimes called “biosimilars,” but are more accurately “biogenerics” (i.e., not actually tested and proven to be biosimilar; no comparative clinical trials; not GMP-compliant). These are used for domestic consumption and are being sold into lesser- and nonregulated international markets.
China’s growth in bioprocessing has been documented by BioPlan Associates (www.top1000bio.com), which reports and ranks known or estimated bioprocessing capacities, related employment, and products in development for the top-ranked 1,000 global facilities. More specific data from our 2016 Directory of Top 60 Biopharmaceutical Manufacturers in China, indicates substantial improvements in terms of quality processes, and increased partnering with Western companies from the first Directory, in 2008.
Chinese biopharmaceutical manufacturing capacity (total/cumulative bioreactor volumes) has increased dramatically in recent years, along with many new companies and facilities and products in development and being manufactured. Preliminary data shows total Chinese capacity to be over 1.6 million (out of >18 million L of worldwide capacity).
Today China has about 150 bioprocessing facilities producing biologics at some stage of clinical development. In 2012, Top1000Bio covered only 105 facilities in China, with 39% growth in facilities, nearly 10% annually. Total capacity was about 1.2 million liters in 2012, with 33% growth, ≥8% annually. Most growth, particularly in terms of new facilities and companies, involves manufacture of recombinant mAbs and other recombinant therapeutics vs. vaccines and blood-derived products. Total Chinese and Indian capacities are now about the same.
The great majority of biopharmaceutical products currently manufactured and being developed in China are biogenerics, sold in lesser- and nonregulated international commerce and Chinese domestic markets. These biogenerics generally lack biosimilarity testing, manufacture to Western-type GMP standards, and comparative clinical trials. However, this is rapidly changing, with more companies now setting their sights and actively planning for eventual full GMP manufacture of genuine, major market-acceptable biosimilars.
Although Chinese facilities may still have a long way to, including there still being zero precedents for U.S. or European Union approvals of biopharmaceuticals manufactured in China, Western partners, such as Pfizer in Shanghai and Hangzhou, are bringing needed value to bioprocessing. And although innovative product development and manufacture is still rare in China, a number of innovator companies there are moving past R&D and into clinical-scale operations.
Global suppliers, such as GE, Pall, Sartorius Stedim Biotech, MilliporeSigma, Thermo Fisher Scientific and many others, have been physically present in this market, some for decades, and are now investing heavily in the region to bring in the necessary know-how, raw materials, and equipment to help their manufacturing customers meet GMP requirements.
Our Biosimilars/Biobetters Pipeline Database (www.biosimilarspipeline.com) currently reports 47 biosimilar-involved companies in China, nearly all developers and/or manufacturers and marketers, involved with nearly 100 biosimilars and about 20 “biobetters” (follow-ons incorporating some innovative or other significant difference(s) vs. reference products; thus not approvable as biosimilars).
The great majority or nearly all of bioprocessing facilities and capacity in China belong to these companies manufacturing biosimilar-type biopharmaceuticals.
Chinese companies are planning to use biosimilars, not innovative products, as their entry in the world biopharmaceutical industry, including highly regulated major markets, e.g., U.S. and Western Europe. Many are currently working on developing products and getting them into international commerce, then somewhat more regulated domestic and regional markets, and eventually, entry into major biopharmaceutical markets, with the U.S. the biggest market. This will involve further years of work upgrading bioprocessing, especially upgrading processing, documentation, and business practices to GMP and building new facilities.
Companies are choosing among different paths to attain these goals. For example, some are: extensively using Western consultants and licensing-in the latest technologies; adopting single-use manufacturing systems (presumed more GMP- and regulatory approvals-friendly); and planning or building large capacity facilities that will often require years before attaining near full capacity utilization (with government policies favoring facilities “going big”).
Foreign Involvement in China
Nearly all of the growth in bioprocessing manufacturing capacity and facilities in China involves domestic, not foreign, companies. Although there has been some limited partnering with foreign companies in building and operating facilities, this has mostly involved classic biologics (vaccines, blood products,). Big Pharma and other established major/Western market biopharmaceutical companies have generally not been constructing their own manufacturing facilities in China, either to serve the domestic or export markets. This is unlike R&D, where most every major Western company by now has invested in and off-shored basic research and early development tasks to new, often very large, facilities of their own in China, or are off-shoring R&D to a few leading Chinese CMOs oriented to serving Western companies, such as Wuxi Apptec.
BioPlan has studied the lowest costs currently attainable for commercial-scale mAb manufacture, and found a clear consensus (among Western experts interviewed) that China, as well as India, offer few real cost advantages in the big picture, with many hidden costs and problems associated with GMP foreign manufacture.
While some calculations may show lower costs for manufacturing biopharmaceuticals in China, many critical factors are often not taken into account, such as the all-important speed to market; risks to intellectual property; the slow pace of doing business in developing regions; language, translation, and cultural differences; high import duties in bioprocessing hardware; lack of experienced staff; wage increases; etc. This is besides a general lack of bioprocessing and related regulatory expertise in China with recombinant technologies at GMP and commercial scales. Another complication is that Chinese facilities are still restricted by regulations from providing CMO services, particularly product manufacturing, to foreign companies.
There are also serious questions in China that increase risks. For example, the CFDA (Chinese FDA) recently reported that ≥80% of products approved by the agency have serious deficiencies in their clinical trials, including fraudulent or inadequate data. Although some of these claims are currently being disputed, the uncertainty creates greater investment risk. Also, it must be understood that, despite its population and rapid industry growth, usage of biopharmaceuticals, familiarity, even among physicians, and affordability remain low in China. While the country has a rich history in classic vaccines and blood products, the Chinese biopharmaceutical industry has really only started-up recently and from near zero baseline.
However, there are trends for major market/Western biopharmaceutical firms establishing manufacturing facilities in China. This includes first attempts at establishing facilities expected to readily meet major highly regulated, e.g., U.S., GMP standards. The most prominent recent moves include two GE fully modularly constructed KuBio facilities coming online in China to support Pfizer as part of its $350 million investment in a fully single-use multiple 2,000 L single-use bioreactor-based facility in Hangzhou for biosimilars manufacture, along with its Shanghai facility with several 200 L bioreactors. JHL Biotech (Taiwan) is opening a CMO facility in Wuhan with several 2,000 L single-use bioreactor-based process lines.
Eric S. Langer (firstname.lastname@example.org) is president and managing partner at BioPlan Associates.