Monday, November 23, 2015

Stocks DD Opines & Cites: Biosimilars - Arguably a Big, Complex, Niche Business Opportunity of this Decade in Pharma


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In just the next 5 years alone until 2020, a staggering $67b revenue/year Biologic drugs will go off-patent. That number will be even more huge if you take in to account the next 10 years. Arguably this is one of the biggest, niche business opportunities in the Pharma industry. Unlike the branded pill industry (Eg: Lipitor) this business opportunity is restricted to the specialized few due to the complexity of Biologics: in proving equivalence, manufacturing process and quality assurance as well as the high Capex needed. So only a handful of companies can compete in this niche opportunity making this very attractive business for these specialized companies. Even specialty drug companies of the likes of Amgen, Merck, Novartis are trying to get a piece in this huge niche opportunity. Here is a list of some companies/JV's attempting to bring Biosimilars in the Developed markets:
  • Novartis/Sandoz
  • Hospira/Celltrion
  • Pfizer
  • Actavis/Amgen
  • Boehringer Ingelheim
  • Mylan/Biocon
  • Baxter/Momenta
  • Merck/Reddy
  • Merk/Samsung
  • Richter
  • Oncobiologics

Biosimilar news

www. Biosimilarnews.com 


Regulatory Pathway  
Here is the FDA-follow-on-biologics pathway -Link

Biosimilars vs Interchangeable Biologic 
(Why I believe Interchangeable biologic can take bigger market share?)

From the FDA site:
Quote
A biosimilar product is a biological product that is approved based on a showing that it is highly similar to an FDA-approved biological product, known as a reference product, and has no clinically meaningful differences in terms of safety and effectiveness from the reference product. Only minor differences in clinically inactive components are allowable in biosimilar products.

An interchangeable biological product is biosimilar to an FDA-approved reference product and meets additional standards for interchangeability. An interchangeable biological product may be substituted for the reference product by a pharmacist without the intervention of the health care provider who prescribed the reference product
Quote

It is logical to expect the interchangeable biologic to make a bigger dent in the market as it is substitutable to the brand. Watch out for companies like MNTA that purportedly are aiming for interchangeable biologics. Of-course the opportunity is large but yet at the same time it seems there are many unknowns to produce interchangeable biologic. See this New England journal article


Assorted Links
1) The next 5 year Opportunity is staggering - Link
2) Biosimilars - Niche business - Link
3) The 1st biosimilar in the US is already launched this year. This is the Biosimilar for Neupogen named Zarsxio - Link
4) Companies have set their targets on the Top selling biologics like  Humira ($10b/year) - Link. Amgen is working with Allergan ($AGN) on biosimilars of Eli Lilly's ($LLY) Erbitux and Roche's Avastin, Herceptin and Rituxan

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