And Now For The Real Biosimilar Opportunity: Antibodies And Complex Biologics

With patents on blockbuster drugs – including Roche/Biogen Idec Inc.'s Rituxan (rituximab), Amgen Inc./Pfizer Inc.'s Enbrel (etanercept) and Roche's Herceptin (trastuzumab) – due to expire in key markets within the next three years, there's a renewed buzz around biosimilars as industry players seek to grab a share of this multi-billion dollar opportunity.

The buzz is around what some call the second wave of biosimilars: copies of more complex biologics including, in particular, monoclonal antibodies. These are the largest and fastest-growing segment of the global $110 billion biologics market. By 2020, over $100 billion in biologic sales will be off-patent, according to IMS numbers cited in a March/April 2011 article in Landes Bioscience's mAbs journal.

The excitement comes despite the fact that the first wave of biosimilar drugs – cheaper copies of smaller and usually simpler biologics such as growth hormone, insulin and erythropoietin – is widely felt to have disappointed, at least so far.

Notwithstanding selected pockets of success, for instance around EPO in Germany, where a biosimilar has captured over 60% market share, these products by and large didn't live up to expectation. Growing cost pressures simply didn't outweigh prescriber skepticism and uncertainty around the safety and efficacy of cheaper biologics (Also see "Biosimilars: Nearly The End Already, Or Is The Best Yet To Come?" - Pink Sheet, 20 Apr, 2011.).

Lessons have been learned, however, around drug positioning, the level and nature of promotional support required, and the kinds of data packages prescribers want to see in order to embrace a copy-cat biological.

Regulators have progressed, too: the EU released draft guidelines on biosimilar antibodies in late 2010, for which the consultation period ended on May 31, 2011. And FDA is catching up: the Biologics Price Competition and Innovation Act (BPCIA) was passed in 2009, and FDA began hearings on how to implement this biosimilars pathway in 2010.

This time around, most of the products losing exclusivity are far more expensive than the simpler molecules in the first wave, thus representing a more valuable opportunity, both for biosimilar sponsors, and for payers around the world seeking to curb health care spending.

And the trend will likely continue long term: by 2016, half of the top-20 best-selling drugs will be biologics; seven of those 10 will be monoclonal antibodies, and one is rheumatoid arthritis drug Enbrel, a complex fusion protein with antibody components that presents an even more complex challenge to copycats than antibodies.

Rituximab: The Pathfinder Antibody?

Thus it's not surprising that several of the companies still in the biosimilars game – as well as newcomers to it, including innovator companies such as Merck & Co. Inc. – are emphasizing monoclonal antibodies. "Most of our portfolio is monoclonal antibodies," confirmed Mike Kamarck, president of the three-year-old Merck BioVentures unit.

Rituximab will be the first major antibody to lose patent protection in Europe, in November 2013, and thus will be "the first biosimilar antibody to be launched in oncology," according to Andrew Merron, Director, Biosimilar Advisory Service and Oncology Products at Decision Resources, speaking at a June 16 conference in London. (See (Also see "Complex Biologics: Near-Term Patent Expiry Dates" - Pink Sheet, 27 Jun, 2011.) for key examples of complex biologics with upcoming patent expiration dates.)

Merron says biosimilar rituximab will open the door for other even more valuable cancer drugs, such as biosimilar Avastin (bevacizumab), Erbitux (cetuximab) and Herceptin.

Initially launched in Europe in 1998 for follicular lymphoma, rituximab (sold in Europe by Roche as MabThera) has become the fourth most successful biologic in the world, according to Decision Resources, and is still growing. 2011 sales are expected to reach $6.3 billion, including about $1 billion in immunology indications such as rheumatoid arthritis.

Critical to the drug's success – and ongoing potential – has been its multiple subsequent approvals in a range of leukemia and lymphoma subpopulations. As a result, rituximab's sales in oncology alone are comparable to Herceptin's – despite breast cancer's being a far more widespread disease. Rituximab is a relatively minor player in RA.

Little wonder then that there's already a version of biosimilar rituximab available commercially – in India. Dr Reddy's Laboratories Ltd. began selling Reditux there in 2007; the drug sold just over $5 million in 2009-10.

Reditux's Indian sales don't reflect the potential of this drug in the more highly regulated Western markets, though – potential that most of the leading generics firms are keen to tap. Teva Pharmaceuticals Ltd. has a candidate in a Phase Ib trial with manufacturing partner Lonza Biologics, comparing the drug's pharmacokinetics, pharmacodynamics and safety with MabThera; this study, due to complete in November 2012, could, Merron suggested, become a Phase I/III hybrid trial that's sufficient for approval.

Novartis AG's Sandoz unit is investigating GP2013 in Phase I/II trials in RA in Europe, while Korea's Celltrion Inc., partnered with Hospira Inc., expects to start clinical trials of a biosimilar rituximab in the second half of 2011. Celltrion – which has the first FDA-approved cGMP manufacturing facility in Asia – is developing a host of complex biosimilars and claims its Herceptin copy will be the first marketed complex biosimilar, potentially ahead of Teva's rituximab copy.

The second-generation biosimilar opportunity is attracting companies from outside the drug sector, too: Korean industrial conglomerate Samsung Group has a Phase I biosimilar rituximab candidate, as part of its $266 million joint venture with Quintiles Transnational Corp., announced in January 2011 (Also see "Samsung Looks To Mirror Fellow Korean Pharma Celltrion's Path From CMO To Biosimilars Developer With Quintiles JV" - Pink Sheet, 1 Mar, 2011.).

Enbrel: Paving the Way For Complex Biologics

Merck's Kamarck won't disclose whether or not the company is in the rituximab race. But he openly talks up Enbrel as another of the earliest complex biologics likely to appear in biosimilar form.

Merck in June 2011 jumped ahead several places in the race to produce a biosimilar Enbrel by snapping up rights to Hanwha Chemical Corporation's version, which is in Phase III in Korea. Merck (which wasn't the only one wooing Hanwha) had been working on its own copy of the drug and also sells a branded anti-TNF of its own, Remicade (infliximab).

But etanercept "is tough to make it the way the originator did; it has unique sugar modifications that even antibodies don't have," explained Kamarck, previously President, Technical Operations and Product Supply at Wyeth, which developed the original Enbrel (Also see "Merck Lands Late-Stage Enbrel Biosimilar In Deal With South Korea's Hanwha" - Pink Sheet, 13 Jun, 2011.).

India's Avesthagen Ltd. in 2010 acquired a process patent to manufacture biosimilar Enbrel in India, where the private company is targeting a June 2012 launch. Enbrel isn't patented in India.

But even in the U.S, where key patents begin to expire at the end of 2012, and in Europe, where the drug is protected until 2015, "the biosimilar might be forced to launch later because of the drug's complexity," ventured Merron. He forecasted a 2014 U.S. launch, which corresponds to when Celltrion plans to launch its Enbrel copy, currently in process development.

Lessons Learned: Full Data Package Required

Whether or not it includes rituximab or etanercept, and in whichever order, the first handful of complex biologics "will be test cases as to how much analytic work and clinical data regulators will require," remarked Kamarck.

More importantly, the pioneer complex biosimilars will likely compel at least some sponsors to take on board the most important lesson provided by the first wave of biosimilar drugs: that a decent data package is required, if not to get past the regulators, then certainly to convince skeptical prescribers.

Few doctors in Europe, outside of Germany, face personal financial penalties by prescribing expensive originals; hence there's little or no incentive to switch patients to a cheaper copy with a far thinner data package supporting it.

Kamarck claimed that, at Merck at least, there won't be "any abbreviation in the depth, quality or stringency" of Phase III efficacy and safety trials, at least for the first handful of such drugs. "It would not be sound science not to establish both efficacy and safety, especially for the first wave of these products," he opined.

Although the EU guidelines in theory leave the door open for abbreviated clinical trials in some cases (for instance, requiring trials only to show safety, not efficacy, which could be demonstrated in pharmacodynamic trials), Kamarck insists that the feedback Merck has received from European regulators on four of its programs suggests that "they want full trials; doctors want the [full] data packages."

Indication Extrapolation: Yes Or No?

As well as testing regulators' and doctors' appetite for cheaper complex biologics, biosimilar rituximab and etanercept will also provide answers to another critical question facing biosimilar manufacturers: whether, and how much, indication extrapolation will be allowed.

Rituximab is the extreme example, given that its uses span cancers as well as RA. Current EU draft guidelines for biosimilar antibodies, expected to be finalized without major changes, say indication extrapolation is possible, given overall evidence of biosimilarity.

But it also adds that such extrapolation becomes "more challenging" if the indications for the originator product are widely different – in the case of a reference mAb licensed both as an immunomodulator and as a cytotoxic agent.

In the U.S, it appears that the emerging 351 (k) pathway for biosimilar applications will in theory allow extrapolation between indications, but debate over what some say are over-burdensome data requirements continues (Also see "Biosimilars Pathway Dilemma: When Should Sponsors Pick (k) Before (a)?" - Pink Sheet, 23 May, 2011.).

Kamarck acknowledged the importance of indication extrapolation for the commercial success of complex biosimilars – whose development cost, as it is, will likely exclude all but the most deep-pocketed players.

"Our preference is for a definitive Phase III comparative study in the most sensitive indication, with a proposed open-label study in all further indications," he said, adding that these open-label studies could be pre-or post-approval.

Doctors surveyed by Decision Resources' Bio-Trends division suggested that they would only use a biosimilar antibody in the indication it was tested in, however, Merron reported.

The same survey highlighted a fact already evident from experience with the first-generation biosimilars: that doctors' prescribing hurdles will be higher than the regulators'. Most hematologist-oncologists said they'd want to see at least two Phase III trials before prescribing biosimilar rituximab.

National differences emerge, too: over 80% of surveyed French prescribers would want to see efficacy trials versus the reference product, and the French demand higher levels of immunogenicity testing than their German or U.S counterparts. And while U.S. doctors would mostly accept two years or less of clinical trial data for biosimilar rituximab, less than 60% of French hematologists would be prepared to do so.

Building Trust, Early – And Via Branding

Decision Resources predicts as a result that uptake of biosimilar rituximab will be more rapid in the U.S. than in Europe. Less conservative attitudes among doctors coupled with huge budgetary pressures may prove them right – despite the relative lack of experience with first-generation biosimilars in the U.S.

But whatever the trans-Atlantic differences, it's clear that the first handful of complex biosimilars will likely need far more extensive clinical trial support data than their followers.

"Maybe eventually we will be able to do less. But at the outset of this new business, one ought to be as stringent as one can. Even a small hiccup could take the opportunity away from us – and patients," said Kamarck.

Merck, along with large competitors such as Teva, Sandoz and Pfizer, can afford to pay to keep biosimilars' promise alive. For companies like these, the opportunity to get in early and capture trust-building relationships with doctors, payers and insurers is enormous.

So, says Kamarck, is the opportunity to leverage Merck's brand in order to do so: he suggested that biosimilars "may work better as brands," positioned not simply as cheaper copies, but as an entirely new treatment proposition: 'value' products aimed at improving access, but "with the same efficacy and safety as is associated with the Merck brand."

The Only Way Is Up, Including For First-Wave Biosimilars

Given the estimated cost of developing a complex biosimilar – about $200 million – and the lackluster success of the first wave of drugs, it's still a risky game, especially as innovators hone their defense strategies, including improved follow-on drugs as well as patent litigation.

But Kamarck and others are betting things can only go one way, given economic pressures. "If doctors are offered an attractive product that's safe and effective, and cheaper, it's hard to believe they won't push it," he argued. Already, he said, "there's a lot of interest from U.S payers in what we're doing."

And maybe it's too early to judge the success or otherwise of the first-generation biosimilars. "There was initial reluctance when chemical generics first appeared" several decades ago, recalled Claudio Albrecht, CEO of Swiss-based generics firm Actavis Group, which is on the brink of finalizing a biosimilar insulin deal with Poland's Bioton SA and is seeking a partner-driven ticket into the biosimilar antibody arena too.

"It will take time to build trust among doctors and patients, and it will take gentle pressure from legislators," he said.

But once that trust is there, biosimilars' success could mirror that of small molecule generics, Albrecht suggested – or even surpass it, given that many biologics address critical, life-threatening diseases.

Indeed, although they're more complex to copy and make, biosimilar antibodies may face an easier path than their first-generation counterparts given that their forebears, although still struggling to wow investors, haven't thus far thrown up any major safety issues.

By Melanie Senior