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2014; a great year, and close to being a vintage one
In many ways 2014 was a year of significant milestones in the biosimilars market. And while it was a great year, it didn’t quite reach vintage status for me. Don’t get me wrong, significant progress was made across all key areas of the biosimilars market, including regulatory, clinical, commercial and legal areas. But the petty in-fighting about safety, similarity and how much money biosimilars could save health services around the world took the sheen off it for. In terms of milestones, there were plenty.
From a regulatory perspective we had the first 351(k) application submitted to the US Food and Drug Administration (FDA) – Sandoz’s EP2006 in July 2014 – which was swiftly followed by three more from Celltrion (infliximab; Aug 2014); Apotex (pegfilgrastim; December 2014); and Hospira (EPO-alfa; December 2014). Interestingly there was only two submissions to the European Medicines Agency (EMA); human insulin and filgrastim. I’m not sure much can be read into the more submissions being made to the FDA compared to the EMA. Europe is so far ahead of the US in terms of biosimilar approvals that the US was bound to start playing catch-up at some point. Several new or amended guidelines were also published in 2014. Perhaps most importantly was the EMA’s softening stance on the use of non-EEA sourced reference product as the comparator. The FDA also published its clinical pharmacology guideline, but failed to produce the good when it came to interchangeability. China also published its long-awaited biosimilar guideline, with China’s SFDA doing what many expected; copying most of the EU framework. And aligned with the stellar approval rates seen at the FDA for innovative medicines, 2014 saw the highest number of biosimilar approvals, with 12 new approvals in Europe, Canada, Korea and elsewhere.
Clinical development and data presentation activity was also high. It seemed to me that a month didn’t seem to go by in 2014 without a couple of new biosimilar clinical trials being announced. I counted well over 20 new trial initiations in 2014, most of which were focused on mAbs and fusion proteins. Some new trials in the insulin space we also announced, most notably Mylan’s Phase III programme for its biosimilar version of Lantus. Clinical data presentations also went up a gear in 2014, with several biosimilar developers presenting non-clinical and clinical data at many of the big scientific events including ASCO, ACR, ASH, EULAR and SABCS. Perhaps most interestingly Mylan changed the protocol for its Hercules programme (biosimilar trastuzumab) to allow for the inclusion of male patients. Are they having recruitment problems? For the record, I have no idea if they are or not.
In terms of commercial activity, 2014 was definitely a year of two halves. The first half of 2014 was defined mainly by the deals and alliances that were forged. Companies from developed and emerging markets joined forces to drive their biosimilar aspirations forward and leverage their combined strengths. Companies like Epirus, Pfizer, Merck KGaA, Celltrion and Samsung either forged new alliances or deepened old ones. From a business development and licensing (BD&L) perspective, plenty of money was floating about. The second half of 2014 was more about product launches and companies seeking to monetise these investments. Companies such as Nippon Kayaku (infliximab; Japan), Ranbaxy (infliximab; India), Sandoz (filgrastim; Japan) and Zydus Cadila (adalimumab; India) all launched products in 2014, taking the total number of approved and launched biosimilars around the world to 45.
Things from a legal perspective also gathered pace in 2014, with originators seemingly getting the upper hand over biosimilar companies in the courts. Both Amgen and Roche managed to dodge a request for declaratory judgement from Sandoz in relation to the latter’s biosimilar etanercept programme. What this means is that Sandoz cannot avoid the patent dance that forms part of the 351(k) pathway, something that the company seems keen to avoid with its filgrastim biosimilar, EP2006 (more on this product later). A number of other law suits were brought before the courts in 2014. These included Roche suing Biocon and Celltrion, Celltrion seeking declaratory judgement against Janssen Biotech in relation to several Remicade patents, and Amgen accusing Sandoz of not following the rules of the 351(k) pathway. Some of these cases have been resolved, others remain in the courts and are likely to conclude in 2015. Despite the successes for the originator companies, 2014 wasn’t a complete right off for biosimilar players. In the UK Hospira overturned some key patents for Roche’s Herceptin. While this was a key victory for Hospira, it doesn’t mean that biosimilar trastuzumab is coming to the UK any time soon!
In other news, we got a glimpse of what pricing dynamics in the biosimilar mAbs market could look like. In Q1 2014 Norway managed to wrestle a 39 percent discount from Celltrion on its Remicade bill. Celltrion’s biosimilar version of infliximab, Remsima, came out on top in a nationwide tender in Norway prompting many to say that similar pricing strategies would be seen around Europe. According to analysts at Barclays Capital this is the highest discount they’ve seen in ex-EU5 markets, with biosimilar infliximab in some markets (e.g. Portugal) not being discounted at all. It remains to be seen if pricing in EU5 markets follows the same trend as Norway (it might in tender driven markets like Germany), but all eyes will be watching the launch of biosimilar infliximab in EU5 which could happen as early as next month, February 2015. There was also some unexpected news from Roche in relation to its breast cancer franchise. At the end of 2014 Roche announced that the highly anticipated MARIANNE study didn’t meet its primary objective of demonstrating that Kadcyla (trastuzumab ADC) is superior to Herceptin in the first-line setting. The folks at Bernstein said that Kadcyla is now unlikely to be used in the first-line setting, while its use in the adjuvant setting is also strongly called into question. Looking at this from a biosimilar company’s perspective, this was an early Christmas present and one that would have caused big smiles around board room tables.
So quite a year, and one that’s up there in terms of significant thrills and spills. And a year that set the scene for significant future developments…which leads me nicely on to what to watch out for in 2015.
2015; an amazing start and more likely to follow
So far, so impressed. Despite 2015 only being only a month old we’ve seen some major developments. A FDA’s AdCom for Sandoz’s biosimilar filgrastim, EP2006 (to be branded Zarxio in the US) was held on 7 January and to cut a very long story short, it was a slam dunk for Sandoz. The company showed beyond doubt that EP2006 is biosimilar to Amgen’s Neupogen and as a result the AdCom voted 14-0 in favour of approving the product. Sandoz also built some significant credibility for themselves as well as the wider biosimilars market.
That’s not to say the result was ever in doubt, or I doubt Sandoz’s ability to develop high quality products (they’ve been doing so in Europe since 2006). It’s just that this is the US we’re talking about. A country that has been so slow out of the starting blocks when it comes to biosimilars, some people believed this day would never come. The warm and fuzzy halo effect that came as a result of the positive AdCom recommendation even caused share prices to spike for some companies.
We Europeans have also managed to make front page biosimilar news. In the EMA’s latest list of applications for new human medicines under evaluation by the CHMP, it was revealed that a biosimilar version of etanercept had been filed. I speculated soon after that this was most likely Samsung Bioepsis filing its biosimilar etanercept, SB4, for approval. Samsung Bioepsis have since confirmed this. It’s nice to know I can get things right occasionally.
What else should you watch out for, I hear your ask? On the train home last night I wrote down as many things as I could think of that I believe are worth keeping an eye on this year. These include product approvals, regulatory changes, the increasing sensitivity to price in the US, observations on some potential “come back kids” and the emergence of some biosimilar rock stars. There is no doubt in my mind that I’ve missed something that you will consider key 2015. For that I can only apologise and urge you to get in touch so I can learn more about the issue from you.
Submissions, reviews and approvals
In Europe the biosimilar trastuzumab saga continues. Despite Celltrion completing its Phase III trial for CT-P6 in metastatic breast cancer (mBC) there hasn’t been a filing with the EMA (as of January 2015). I’ve been asked many times why and the only answer I can give is that there must have been a change of heart at the EMA in relation to the best patient population for studying biosimilar trastuzumab. The vast majority biosimilar trastuzumab programmes are being conducted in the eBC setting, suggesting regulatory advice has been given. Something to watch out for in 2015 will be any colour from the EMA in relation to the perceived change in guidance. Members of the EMA’s CHMP have been very keen to clarify the CHMP’s position on certain biosimilar issues (e.g. extrapolation) so some sort of PR or guideline change on this issue can’t be ruled out. Also in Europe we have the possibility of another biosimilar insulin approval, only this time a human insulin. I’ve previously said that I believe the sponsor of this submission is Biocon as all other companies developing biosimilar human insulin aren’t anywhere near to filing. Biocon have been very tight lipped about the whole thing, unsurprisingly. Based on the EMA taking 14 months to review Lilly/BI’s Abasria (insulin glargine) I’d say that we could expect to hear something about this in Q3 2015 (damn, there’s my first prediction).
In the US sentiment toward biosimilars is at an all-time high. The warm, fuzzy feeling that people have following the positive FDA AdCom for Sandoz’s biosimilar filgrastim (EP2006) a couple of weeks ago has everyone saying that the US has come of age and the FDA will be shelling biosimilar approvals like peas. I’m not sure that will happen as there are heftier challenges in front of the FDA in the near-term. While Sandoz has done a fantastic job at proving that EP2006 is biosimilar to Neupogen, we need to remember it’s a simple protein that’s very well characterised and has the same mechanism of action (MOA) across all five of its indications. Apotex’s pegfilgrastim AdCom could be as straightforward as EP2006’s, but I’d recommend reserving judgement on other AdComs, including Hospira’s SB309 (EPO-zeta) and Celltrion’s CT-P13 (infliximab). EPO-alfa and infliximab are more complex than filgrastim (due to glycosylation) and we’ve already seen very differing approaches to extrapolation from the EMA and Health Canada for biosimilar infliximab.
Regulatory changes and refinements
Fingers (and legs) crossed we should see draft FDA guidance on interchangeability this year. Not a prediction, just reporting what the FDA has promised. That being said, the FDA did say they’d make it available in 2014, but several people I’ve spoken to who know far more about the US market than I do tell me that the Agency is still formulating its stance on the issue, hence the delay. I’m really looking forward to reading it and seeing what the FDA is thinking in terms of what’s needed to gain interchangeability status for a biosimilar in the US. Will it provide concrete guidance or just be a plain vanilla guideline that leaves everything to be decided on a case-by-case basis? I’m not sure really. Most people I’ve spoken to about this think plain vanilla is all the FDA can provide. Being too prescriptive is likely to cause problems in interpretation and stop sponsors from seeking scientific advice (which the FDA has continually said it recommends for all biosimilar programmes).
In Europe, where we’ve had a fully functioning biosimilars pathway since 2004, there is an argument for not making any changes and sticking to what works. That being said, an updated insulin guideline could be published sometime during 2015. Outside of that, I’m struggling to see what major revolutionary changes are needed. One potential issue that could emerge in 2015 is how the EMA deals with classes that don’t currently have guidelines. For example, take clotting factors. In the old overarching guideline blood and plasma derived products (e.g. clotting factors like factor VII) weren’t eligible for a biosimilar application. In the new one those exclusions have been removed. Does this mean that the EMA is considering a class level guideline for clotting factors? Are we about to see biosimilar versions of NovoSeven hit the clinic?
Across all markets the biosimilar naming issue continues to rumble on. Only recently Australia’s Therapeutic Goods Administration (TGA) said that following recent international developments in the area of biosimilar naming it will not be continuing with the previously proposed naming convention for biosimilars while a review of the policy is undertaken. A key reason, says the TGA, is the World Health Organization’s (WHO) biological qualifier (BQ) proposal published in July 2014 which superseded the previous International Non-proprietary Names (INN) position statements. Elsewhere biosimilar naming continues to generate significant debate. Sandoz has taken to Twitter to gets its message across that the INN system has been in place for more than 60 years in around the world and deviating from it for biosimilars will impede greater patient access. The FDA is expected to make some statement on the naming of biosimilars, but when that will be is anyone’s guess.
Market opportunities vs. commercial realities
As I’ve mentioned previously, deal flow in the biosimilars market was pretty healthy in 2014. Big pharma, small biotech and everyone in between took a slice of the action and ponied up some considerable BD&L dollars. Since 2010 there have been well over 60 biosimilar focused deals, and for the most part all of the key players are partnered somewhere around the world for at least one part of their portfolio. Moving forward I expect more deals to be announced, but as time ticks on the number of deals is likely to fall while the costs of entering these deals is likely to increase (damn, another prediction). The logic behind this is pretty simple; there are only so many good partners to go around, and good partners are becoming a scarce commodity.
This is where interest in the “third wave” of biosimilar opportunities could come into its own. Far too many companies are chasing opportunities within the very tight range of the big mAbs (e.g. trastuzumab, rituximab, adalimumab), fusion proteins (e.g. etanercept) and modern insulins (e.g. insulin glargine) that see patents expire over the next 3-5 years; the so-called “second wave” opportunities. Forward thinking companies are eschewing potential opportunities within the second wave and focusing on longer-term goals. For example, Formycon is developing biosimilar versions of products which are due to lose patent protection in 2020 and beyond. By offering a slightly differentiated development strategy, companies like Formycon have the ability to drive significant growth and attract high quality partners.
Agreed, the whole third wave of biosimilar opportunities isn’t a new concept. Teva was one of the first companies to talk about it. Which makes me believe that Teva, along with another biosimilar developer that disappeared for while could be planning a comeback. Several people I’ve spoken to have heard the same rumours as me; Teva is planning something in the biosimilars space which is focused on the third wave, and our old friends at Merck BioVentures could also be getting the band back together. Teva already have a marketed biosimilar product (biosimilar filgrastim) so have the necessary experience. And now that Copaxone seems safe from generic predators, they might drop the Copaxone blinders and start looking for new opportunities for growth. Merck & Co. are still very much in the hunt for biosimilar glory, having partnered with Samsung Bioepsis on insulin and oncology mAbs. But I get the feeling there’s more going on behind the scenes, and I wouldn’t be surprised if Merck’s eyes weren’t firmly on third wave opportunities.
When it comes to balancing market opportunities and the commercial realities of competing in the biosimilars market, two more situations come to mind and deserve close attention. In Europe there is broad agreement that biosimilar infliximab from Celltrion and Hospira will be launched in the major EU markets of France, Germany, Italy, Spain and the UK (EU5) sometime in H1 2015 (it could be as early as February 2015). By all accounts performance of biosimilar infliximab across some of the minor EU markets has been mixed. Even in Norway where they obtained the famous 39 percent discount, uptake seems to have stalled (as of August 2014). With a patchwork quilt of companies marketing the product for them in Europe, Celltrion will be hoping for a decent return on investment as EU5 markets are likely to be where the bigger returns will come from. In the US there has been much debate about how sensitivity to price is increasing. Thanks to Gilead’s pricing strategy for Sovaldi and Harvoni, both miracle drugs that are used to treat (and cure!) hepatitis C, payers in the US are now highly sensitised to irrational pricing. As such, well thought out biosimilar pricing strategies will be a critical success factor in the US. Pharmacy benefit managers (PBMs) like Express Scripts are on the prowl for cost savings, particularly as more high cost therapies are coming down the pipe (e.g. PD-1s in oncology and PCSK9’s in lipid management). Biosimilars are not the only thing PBMs are looking to save costs, but they are firmly on their radar.
Recruitment patterns and the emerging “rock stars” of biosimilar world
It’s been very interesting to read the job adverts for biosimilar roles over the last year. For the most part, commercially focused roles have become more common compared to a few years ago when companies were looking to recruit clinical and regulatory folks. Pfizer, Hospira, Sandoz and Merck & Co. have all been recruiting and all of the jobs say one thing; we need people who know how to sell and market biologics. As many countries are still wrestling with the whole “interchangeability/substitutability” issue, it’s pretty clear that a focused sales and marketing strategy will be needed to drive uptake of biosimilars. All that being said, I don’t believe sales and marketing will be the King makers in all of this. My last prediction is that Medical Affairs teams will emerge in 2015 as the “rock stars” of biosimilar world. While sales and marketing will be responsible for selling the product, and R&D will be responsible for developing the product, medical affairs provides that cohesive, integral and highly respected role in pharma that focuses on meeting the physician’s needs. Perhaps most importantly, medical affairs acts as a liaison to health care professionals and professional organizations, and gets very involved driving and shaping thought leader development; basically the people that biosimilar companies need to back their products and tell other physicians to use them.
So, where are we headed?
I finished my last article for BiotechDueDiligence by saying that I hoped that 2014 would be a year when we could all find some common ground. I asked that well all got behind biosimilars and made the sector work. Perhaps I was being a little optimistic for that much to happen in the space of 12 months. Progress has been made, and more progress is sure to be made in 2015. But we have a long way to go. I remain optimistic, however, about the future of the biosimilars market and I can’t wait to see what the future brings.
The views expressed in this article are mine, and mine alone. Furthermore, all information in this article is only current as of the date of publication. If you're reading this article sometime after its original publication, it may not reflect accurately recent events. Please read and understand the complete Biosimilarz Blog Disclaimer.
This piece was independently written by and solely expresses the views of Dr. Duncan Emerton. Please read and understand the complete BiotechDueDiligence Disclaimer.
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