Biological drugs are highly-effective protein drugs produced in living cells.
With the advent of recombinant DNA technology in the late 1970s, biologics emerged as a new source of medicines. Since then biological drugs have revolutionized the treatment of serious disease such as diabetes, multiple sclerosis, cancer, and more recently, also arthritis, skin and eye diseases. The size and complexity of the proteins which constitute active pharmaceutical ingredients (APIs) in biological drugs is much higher compared with traditional small molecules which are produced through chemical synthesis. A small molecule, such as Aspirin, has a weight of 180 Daltons compared with ranibizumab, the active pharmaceutical ingredient in Lucentis®, which has a mass of 48,000 Daltons.
Biosimilars are approved pharmaceuticals that are similar to a biological reference product in terms of quality, safety and efficacy. They are approved in highly regulated markets such as the EU and the US via stringent regulatory pathways following loss of exclusivity of their originator reference products. Development of biosimilars requires deep expertise in protein expression, purification, analytics as well as clinical and regulatory aspects.
What are the benefits of biosimilars?
Many biological drugs have become widely used and improved the life of millions of patients globally. This is true for the VEGFa-inhibitors, giving vision back to elderly with Age related macular degeneration who previously had no treatment option, the TNF-inhibitors that has revolutionized the treatment of rheumatoid arthritis and the PD1 inhibitors having saved patients from deadly cancers previously untreatable.
The problem is only that these drugs are very expensive making them accessible only for patients with the financial means, either via public or private funding.
Millions of individuals globally are currently suffering from diseases for which there is a treatment they cannot afford.
Biosimilars are so far typically launched with a 20-40% discount vs. the reference biological drug improving significantly the accessibility of the treatments and generating massive cost savings for private and public payors. The results can be seen clearly as the number of treatment days per capita have increased significantly as biosimilars are entering the market.
How are biosimilars developed?
Because of the size, the structural complexity, and the living cell systems they are derived from, the development and production of biosimilars demand a great deal of time, effort and expertise. The reverse engineering of these drugs is made even more difficult because of the natural variations which occur in these biological molecules. The essential principle in the development of any biosimilar drug is similarity with the established reference drug.
To achieve this threshold, the producer of the biosimilar must ensure that the drug quality, safety and efficacy are comparable to the biological reference product. A small molecule can be characterized and compared in-vitro with the original molecule and shown to be an exact copy.
This is not the case for proteins where different analytical methods have to be used to characterize the protein and demonstrate a high a likeness compared with the originator drug as possible. After having demonstrated high comparability of the biosimilar to the originator product via this panel of in-vitro analytical methods clinical trials can be initiated.
Typically, biosimilars have to go through a phase I trial with the objective to demonstrate equivalent pharmacokinetic profile to the originator product after which equivalent efficacy and safety shall be demonstrated in a phase III trial. It typically takes six to seven years to complete the development of a biosimilar.
Why Xbrane has chosen to focus on biosimilars?
Development of novel drugs is critically important for the society, as it brings new treatments to individuals suffering from various diseases, significantly improving and prolonging their lives. However, Xbrane believes it has an equally important role to play in the society. As these novel drugs typically are priced at a level making them unaccessible for large parts of the global population it is equally important to develop more cost efficient versions of these drugs and thereby making them accessible to the global population. Our fundamental belief is that if there is a treatment, it should be available for everybody.
Probability of Success for Biosimilar
Probability of Success for Novel Drug
Source: Informa Pharma’s Biomedtracker database, based on 108 tracked biosimilar development programs and over 10,000 novel product development programs.
We also believe that biosimilars typically present very attractive business cases with a risk/reward profile that suits us well. Analyzing data from 108 biosimilar programs in Informa Pharma’s Biomedtracker database, reveals an average probability of success for biosimilar programs from entering phase I to market authorization of 78%. This stands in sharp contrast to the probability of success for novel drug development programs estimated to about 10% from entering phase I to marketing authorization, based on data from over 10,000 novel drug development programs in the same database. Actually, the probability of success of biosimilar programs is actually more in line with probability of success of traditional generic programs, which historically has been at about 90%.
At the same time, due to the deep technologial and scientific know-how required for biosimilar development, there are only a very limited number of companies in the world with the know-how and capabilities to develop and produce biosimilars, particularly when it comes to meet the strict regulatory standards in Europe and in US. This creates barriers of entry and has resulted in on average 2-5 biosimilar competitors on the first wave of biosimilars in Europe and a price discount to the reference product of 20-40%. This creates a profit generation dynamic which is more similar to novel drugs than to traditional generic drugs for which price discounts can go up to 90% day after patent expiration as 10-15 generic competitors enter at the same time.
We therefore see biosimilars as falling in between, with a risk profile more similar to traditional generic drugs and a reward profile more similar to novel drugs, a risk/reward profile we find very attractive.
|Traditional Generics||Biosimilars||Novel Drugs|
|Development Costs 1||< € 10 million||€ 50-100 million||Up to € 1 billion|
|Probability of success 2||+90%||78%||10%|
|Barriers of entry||Low||High
Patent Protection Technological/scientific know-how
|Typical price discount, relative to reference product 3||90%||20-40%||N/A|
|Typical differentiators||Price||Low cost position via proprietary technology. Sales & marketing/brand.||Clinical/regulatory approach. Sales & marketing/brand.|
1 Tufts Center for the Study of Drug Development (CSDD). 2 Informa Pharma’s Biomedtracker database, based on 108 tracked biosimilar development programs and over 10,000 novel product development programs. 3 The impact of biosimilar competition in Europe