Biosimilar manufacturing: Choices, challenges, and capacity uncertainty
While global biologics sales are forecasted to surpass $200 billion by 2020, the biosimilars market may only reach $1.9 to $2.6 billion by 2015 , despite the fact that the biosimilar market is touted to be the fastest-growing segment of biologics once biosimilars takes hold, according to IMS Health. We may be witnessing the beginning of that market ramp-up in biosimilar sales with Hospira’s recent EU approval of Inflectra, a biosimilar of Remicade – the first European approved monoclonal antibody biosimilar therapy.
As many companies compete for a piece of the biosimilar market, forecasting the overall demand and the corresponding manufacturing supply capacity required to manufacture biosimilars will be challenging. To manage the risk of this capacity uncertainty, many biosimilar developers are outsourcing their manufacturing. We recently conducted a bioPULSETM survey to explore the effect of biosimilar development on overall outsourcing and manufacturing capacity in both established and growth markets.
There appears to be a wide range of opinions among the survey respondents regarding the effect that the increasing numbers of biosimilars will have on capacity. BPTC understands the concern for a potential capacity shortage is real, however we do not believe that biosimilars alone will cause a capacity shortage. There are relatively few biosimilar products in development compared to the number of innovator products in development, titers continue to increase and in regulated markets, demand for biosimilars will likely erode demand for existing products. So, we do not expect biosimilars will have a significant impact on global capacity demand.
While available capacity may or may not be an issue, demand for commercial manufacturing was the most important factor for the survey respondents. Who can forget the shortage of manufacturing capacity that sent shockwaves through the biotech industry – when Immunex’s capacity shortage for manufacturing Enbrel caused a rationing to rheumatoid arthritis patients because of the unexpectedly high demand?
Interestingly, to help manage access to capacity, roughly 33% of the respondents do not plan to use CMOs because they either already have or will have their own capacity to develop and manufacture their biosimilars. This manufacturing strategy suggests that many companies may be leveraging existing, or building additional, assets to control the development and cost of their biosimilars pipeline.
For those who will use CMOs for their biosimilar manufacturing, a strong majority indicated they would seek CMOs with global regulatory compliance records. This approach indicates that many biosimilar developers will be targeting multiple geographic regions, as opposed to just a few countries, for approval and sale of their biosimilar products. From a business perspective, this is a logical strategy to leverage the relatively fixed CMC costs across as many countries as possible.
In contrast, there is a small cohort of companies that are targeting a regional CMO strategy for biosimilar development. This strategy can offer substantial opportunities for developing biosimilars for growth markets, such as China or Brazil, where there is significant unmet medical need for these products, and the regulatory hurdles are perceived to be lower than other parts of the world. We may even see a shift in the next five years in the percentage of biosimilar developers seeking CMOs with global regulatory compliance records to this regional approach considering three quarters of the respondents indicated that they either plan to increase or keep the same their outsourcing to CMOs in emerging markets. This shift may indicate that companies are beginning to take advantage of incentives offered by some countries to manufacture drugs within their borders or are planning to develop a biosimilar for a limited geographic region.
Nearly 25% of respondents have an alternative biosimilar sourcing strategy which does not involve the use of growth market CMOs within the next five years. This strategy could indicate that companies are establishing centers of excellence for global supply of their biosimilar products, which would not be located in an emerging market, but may still supply biosimilar products to these markets.
Due to the high cost to manufacture any biopharmaceutical product, coupled with the need to keep manufacturing costs low for biosimilars, it is not surprising that a significant number of respondents indicated that they “will not” or are “not likely” to manufacture their biosimilar in multiple locations. Yet, it is somewhat surprising that a quarter of the respondents indicated they are “somewhat likely” to manufacture in multiple locations.
It is clear from our bioPulse survey results that biosimilar developers are taking a variety of approaches and targeting various geographic markets to ensure supply of their products, employing a combination of in-house and outsourced manufacturing, in both established and growth markets. Once the biosimilar market is firmly established, likely within the next 5-7 years, we’ll see if this multimodal supply is still valid.
Blog article by: Patti Seymour