Agila Biotech and Pfenex Inc. to develop Biosimilars for the global Market
Biosimilars is the topic of the day as news broke of Indian Agila Biotech?s joint venture with US Pfenex Inc to produce Biosimilar products. Under the agreement Agila Biotech will hold 51% equity of the joint venture that will take advantage of Agila Biotech?s new manufacturing facility that is being built in collaboration with Bio-XCell.
Under the terms of the agreement, Pfenex will assume responsibility for developing an optimised strain and Agila Biotech will be responsible for pre-clinical and Phase I development. The joint venture will then progress the products through Phase III and into commercialisation. Together, they have outlined an initial pipeline of 6 products, with the lead product being an Interferon beta-1b Betaseron biosimilar that is used in treating Multiple Sclerosis.
What are Biosimilars?
Biosimilars can largely be thought of as the biological equivalent to generic chemical drugs in that they are products that are comparable in function to brand-name therapeutics and cost a fraction of the price.
Whilst generic drugs are the progression of patent-expired chemical compounds, biosimilars are the follow on products of Biologics which are large and complex synthetic molecules that resemble natural molecules found in plant or animal cells. Naturally produced molecules, for example Insulin, are produced synthetically using recombinant DNA technology whereby the gene that encodes the molecule is expressed in living microorganisms. This method of generating biological molecules, Biologics, has been used for many years to treat a wide variety of diseases such as Diabetes, Alzheimer?s Disease, Multiple Sclerosis, and HIV/AIDS .
The challenge for producing Biologics is that, unlike pharmaceutical compounds, replicating the active molecule is incredibly difficult due to the unavoidable errors that occur in its synthesis by microorganisms. This difficulty is eloquently described in a Nature article by Heidi Ledford who wrote:
“Making a biosimilar is more like placing a complicated family recipe in the hands of a new chef. The overall result may be roughly the same, but it is not exactly how mother used to make it”.
The Biosimilar market
The regulatory pathways, together with expensive manufacturing processes, escalate the developing costs for Biosimilars to $75–250mn USD per molecule. Yet, despite the difficulties in creating Biologic products the market potential for biopharmaceuticals is expected to reach $167 bn USD by 2015, with Biosimilars products accounting for 10% of the market ($17.9 billion USD by 2017).
The global biologic market is experiencing significant growth; however the adoption of Biosimilars is still very fragmented due to complicated approval processes required for such sophisticated products. The US accounts for most of the global spending of Biologics and is expected to be the key driver of the long-term biosimilar market, however, to date the FDA is yet to approve any Biosimilar product in the US. Other advanced economies, such as Europe and Japan, spend significant amounts on Biologics have made significant progress in approving Biosimilars by establishing a thorough approval process. Yet, despite this, uptake remains slow and is likely to remain so until the US becomes an established player. Finally pharmerging economies, such as China and India, contribute little to global Biologic spending, yet they lead in their approval of Biosimilar products. Consequently, much of the Market?s immediate growth will be found within these economies that will spread to advanced economies for long-term growth.
The strategic value of the Joint Venture
This Joint Venture will offer both companies the short-term strategic advantage of establishing themselves within the Biosimilar market in a geographical region that currently promotes Biosimilar adoption. This offers the collaboration short-term revenue and the opportunity to become key market players. The long-term strategic advantage is that once the regulatory mechanisms in more advanced economies encourage adoption of Biosimilar products both companies will be established Biosimilar producers and consequently in the position to achieve a large market share that will secure more lucrative long-term benefits.
– Jonathan Mackinnon