At the Financial Times' Global Biotech Conference, held in London on October 20 2004, industry experts gathered to discuss key issues facing the biotechnology industry. Two presentations and a panel discussion were devoted to one of the hottest topics - biogenerics.

These are copies of biological products, such as erythropoietin, interferon or human growth hormone, which are now some of the most lucrative in the world. Johnson & Johnson's EPO products for anaemia, Procrit and Eprex (originally developed by Amgen), alone had sales of $4.1 billion in the 12 months to June 2004, according to IMS MIDAS data - making it the world's eighth best-selling pharmaceutical product.

Australia clears Sandoz hGH
The success of biopharmaceuticals has made generic firms keen to launch cheaper copies - but they have met with frustration as the major regulatory agencies have yet to finalise appropriate routes for their approval. Unlike small molecules, biological products can be affected by their production process - a factor the developers have used to lobby against biogenerics.

The FDA has been considering the matter over the summer of 2004, and the EC has passed legislation for the approval of "similar biological medicinal products" that is due to take effect in late 2005. Biogeneric applications can already be made to the EMEA, and on October 25, BioPartners submitted an MAA for an alpha-interferon product for the treatment of hepatitis C (similar to Schering-Plough's Intron A and Roche's Roferon-A). Moreover, on October 4, the Australian Therapeutic Goods Administration approved Omnitrope, a biogeneric form of recombinant DNA human growth hormone from Novartis' generics unit Sandoz. So, perhaps biogenerics are finally getting nearer the market...?

Teva describes the "battleground"
As Israel Makov, President and CEO of Teva, the world's largest generics manufacturer, told the FT conference, biogenerics have become a battleground and now is a pivotal time for the biotechnology industry. He noted that for traditional pharmaceuticals, lost patents and expired exclusivity periods provide an incentive for companies to develop new products - an incentive that was missing in the biotech industry; 70% of FDA-approved small molecules have generic counterparts, whereas Epogen/Procrit could have 28 years of exclusivity if its patents do not expire until 2017 - something no small molecule would have.

On a more emotional note, he pointed out that many patients could not afford expensive biological drugs, while on a larger scale biogenerics could lead to "dramatic" savings for the healthcare system. The stakes are huge: worldwide sales of biological products could reach $50 billion in 2004, representing 10-15% of the total pharmaceutical market. Biologics also represent approximately one-quarter of the total industry's pipeline. Moreover, the top 10 biotech companies have a market share of 84%, versus 51% for the top 10 pharma firms - and because many only have one or two key products, they are prepared to fight tooth and nail to protect them.

Manufacturing issues dominate
As Makov pointed out, the stakes are also significant for generic manufacturers, which have to make a series of investments to produce biogenerics. But he commented that Teva would gladly assume patient management costs to assure them that its products were truly equivalent to the brand.

He also shot down some of the widely held misconceptions about biogenerics, for example that products could not be adequately characterised, or that manufacturing processes affected the final product - what about all the changes the developers have made to their production methods?

Using hGH as an example, Makov highlighted that five companies currently produce it, all using different production systems, yet in theory all the products (worth $1.7 billion annually according to IMS) are equivalent to pituitary hGH. And in his opinion, Biogen Idec's multiple sclerosis therapy Avonex (interferon beta-1a) was granted FDA approval with an abbreviated application - a Phase I bioequivalence study - as most of the clinical trials had used a different version.

hGH market share
(12 months to June 2004)

Source: IMS MIDAS

Patrick Vink, Global Head of Biopharmaceuticals at Sandoz, then took up the baton. Stating that he had moved into the generics industry from big biotech himself, Vink described the arrival of biogenerics as a logical step in the evolution of the biotech industry, and expressed some exasperation at the regulatory delays: one whole session of the recent FDA workshop was devoted to what to call the products (the verdict was 'comparable biologics').

Referring to the issue of bioequivalence, Vink said there was no point in exposing patients to unnecessary clinical trials by duplicating them to win approval for biogenerics. He did, however, say that bioequivalence testing would have to be decided on a case-by-case basis in a process that would need to be discussed by the industry and regulators. Like Makov, he said the science was in place, Sandoz was merely waiting for some regulatory clarity.

He also echoed Makov in remarking on the investments that Sandoz would need to make in biological products, in terms of manufacturing and R&D. Biogenerics might also need a higher level of marketing than traditional generics, to demonstrate their benefits to physicians and insurers.

Why weren't problems foreseen?
For the panel discussion, led by conference chair Martyn Postle, CEO of Cambridge Healthcare and Biotech, Makov and Vink were joined by Radan Spaventi, Chief Scientific Officer of Pliva, a major generic manufacturer based in Croatia. One question was why the generic industry had not foreseen the lack of a regulatory pathway for biological products. The panellists put forward a number of reasons:

• a very young industry presented difficulties for regulators
• generic firms struggled with the science, and perhaps focused too much on manufacturing rather than regulatory issues
• strong lobbying from the biotech industry

They all stressed that the approval process was the key issue. As Makov stated, if regulators ask for significant trials, biogenerics could become 'me-too' products - i.e. not significantly cheaper than the original brand because of the high development costs (traditional generics are sometimes as little as 10% of the brand price). Moreover, if they were me-toos, promotional costs would be higher, as doctors would have to choose between different versions of the same molecule.

Another delegate asked if antibody products were also being copied. While the generic executives did not see any reason why not in the future, at the moment they are focusing on simpler proteins like hGH or GCSF (Neupogen), for which analytics are already available. Generic antibodies, however, could be in the pipeline in time for the first patent expiries of major products like Herceptin (trastuzumab) and Rituxan (rituximab).

The final question was timelines: when did the panel foresee the first biogeneric launches? Makov believed it would be some time this decade, while Vink noted that some less regulated markets, such as China, already had them - and took heart from Australia's approval of his company's Omnitrope hGH product.

So, the generic manufacturers are geared up and ready to go - all they need is a green light from the regulatory agencies.

This article was written by Selena Class, Deputy Executive Editor of IMS Company Profiles, which covers a number of leading generic and biotech companies. IMS Generic Planning and IMS Generic Market Analyzer can provide further insight into current and future generic opportunities.

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Relevant reports on this topic:
Global and regional sales information:

• Amgen
• Biogen Idec
• Johnson & Johnson
• Novartis
• Pliva
• Teva

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