Controversy clouds biogenerics market

Drug Store News, August 28, 2006 by Amanda Chater

Controversy already is raging about biogenerics, which has the potential to become the next big thing in the pharmaceutical industry, even though there is as yet no approval pathway for them in the United States.

Biogenerics are generic versions of biotech drugs--more aptly called biosimilars, say biotech makers, because an exact replica of a biotech drug, made from living cells with large molecules, is very difficult to replicate.

The difficulties aren't disillusioning biosimilar manufacturers though, and even the world's top generic company, Teva, is trying to get a slice of the biogenerics pie.

Biogeneric drugs are very appealing because of their high potential revenues and the large market compared with the limited scope to expand in the commodity generics market.

But the United States is dragging its feet on the subject of biosimilars. The first biosimilar drug, Omnitrope from Sandoz, a human growth hormone, was approved in Europe last year, but in the United States, the FDA has classified it as a follow-on protein product because it is not an exact replica of any of the other approved human growth hormone products. It is not likely that biosimilars will be approved in the United States until 2009--until there are regulations in place to determine how to classify them.

The situation in Europe can only help the market in the United States. "If biosimilars become a success in Europe, there will be mounting pressure on the U.S.," said Joanna Cherktow, lead analyst with Datamonitor, an independent market analyst in the United Kingdom.

Once launched, the biosimilars market will grow slowly, she forecast, "because these drugs are expensive to manufacture since they're more complicated and require more clinical tests."

For this reason, there won't be a big price discrepancy between biosimilar and biotech drugs. Newton anticipates that a biosimilar will cost between 70 percent and 80 percent of a biotech drug; in the chemical drug world--a generic costs about 20 percent of its Big Pharma counterpart.

According to a new report from Datamonitor, biologic products with combined global sales of $20 billion in 2004 are currently at risk from biosimilars. The company forecasts that sales of the six key biogeneric product types--insulin, human growth factor, epoetin, colony stimulating factors, interferon alpha and interferon beta--will reach $2.2 billion by 2010 in the United States and five major European markets.

The most attractive market for biosimilars, Newton said, is epoetin--a drug commonly used to treat severe anemia, particularly, as caused by other conditions, such as AIDS, cancer or surgery--as the worldwide market for the drug is worth $10 billion, and there currently are only three products. But, Newton added, "This drug is very complex, so it will need more tests upfront, so it will be expensive." The insulin market is not as attractive "because it's already jam-packed," he explained.

Patent expirations of select key biologic pharmaceuticals

Biologic product       Branded product         Company

Epoetin alpha          Epogen/Procrit/Eprex    Amgen/J&J

Insulin                Novolin, Humulin,       Novo Nordisk, Lilly,
                       Insuman                 Sanofi-Aventis

Interferon beta 1-a    Avonex, Rebif           Biogen Idec, Serono

Human growth           Genotropin, Humatrope   Pfizer, Lilly
hormone                and others              and others

Epoetin beta           NeoRecormon             Roche

Filgrastim (G-CSF)     Neupogen                Amgen

Interferon beta 1-b    Betaseron               Schering AG

Imiglucerase           Cerezyme                Genzyme

Interferon alpha 2-b   Intron A                Schering-Plough

                       Launch      2004
Biologic product        year    sales ($m)   US patent expiry

Epoetin alpha           1988      6,735            2014

Insulin                 1982      3,774          Expired

Interferon beta 1-a     1996      2,554         May 2008,
                                                 May 2013

Human growth            1988      2,324          Expired/
hormone                                      Invalidated ***

Epoetin beta            1990      1,678            n/a

Filgrastim (G-CSF)      1991      1,428         March 2008

Interferon beta 1-b     1993       973           Expired

Imiglucerase            1991       839         August 2013

Interferon alpha 2-b    1987       318           Expired

* In Italy and France, an SPC extends the patent
to May 2007 and November 2007 respectively

** BioPartners has co-licensed this Rentschler patent
and may therefore launch in the European Union

*** Novo Nordisk's key U.S. patent has been overturned
by Teva/Savient as invalid and unenforceable. The equivalent
E.U. patent may therefore also be invalid

**** In France and Italy, an SPC extends the patent to
April 2007 and July 2008 respectively.

Source: Datamonitor: company reported information; Dolphin
patent database, Thomson Scientific, Biogen Idec.