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Eric Langer has over 25 years experience in biotechnology and life sciences strategic marketing management, market research, and publishing. He has held senior management and marketing positions at biopharmaceutical supply companies. He has published and authored many books and reports on topics in Biotechnology, Large-scale BioManufacturing, and bioscience commercialization and communication. He teaches at Johns Hopkins University marketing management, biotech marketing, services marketing, and marketing in a regulated environment. In 1989 he co-founded BioPlan Associates, Inc. to provide market analysis, and strategy to biotech and healthcare organizations.
With a healthy supply of biosimilars heading to the approval pipeline, will license holders turn to contract manufacturers for development and production?
Biosimilars are finally becoming mainstream global products, including more than 20 having received approval in the European Union. The United States has been a prominent country lagging behind in its biosimilars approvals, with four approved by FDA. But many more approvals are on the way. This article examines impacts biosimilars are having on the biopharmaceutical contract manufacturing organization (CMO) sector. This includes capacity needs, and where biosimilars are requiring improved services, particularly related to biosimilarity testing and bioassays.
There is definitely a healthy number of biosimilars in the development pipeline. Currently there are more than 800 biosimilars destined for major/Western markets, and others, better termed ‘biogenerics,’ targeted at lesser- and unregulated international markets and developing countries. The Biosimilars Pipeline Database (1) also notes 650 companies worldwide involved as developers, manufacturers, and marketers.
The current, earliest entrants into biosimilars manufacture and marketing have been Big (Bio)Pharma companies, including those at the top of the biopharmaceuticals market. Many are involved in manufacturing and marketing the biosimilar targets (reference products). These companies and their initial biosimilars, so far, have largely been developed and manufactured in-house. However, is the start of a trend for these large established biopharmaceutical companies to shift their new biosimilar development and manufacture to CMOs? This makes sense, with most regulatory uncertainties about biosimilar development and approvals largely addressed by now, although FDA is still years behind in issuing needed regulations and guidance, such as for naming, to use for biosimilar products.
But biosimilars are essentially “equal opportunity” products. Adding biosimilars to a product portfolio would provide rapid market access and an easily accessible path to expand and consolidate disease or portfolio marketing. But the biggest impact of biosimilars will involve new entrants to the biopharmaceutical industry.
In terms of players, biosimilars will be supporting entrance by a diverse set of companies worldwide. This includes small- and mid-sized major market biotech business model companies, generic-drug companies, foreign entities, companies for whom biosimilars are their sole products, and many others. Numerically, the majority of those involved in biosimilars are not the Big (Bio)Pharma players, although these companies can be expected to continue to dominate, at least in the near term. Rather, the largest number of involved companies will be smaller, and most of these lack the infrastructure to fully commercialize a biosimilar in-house.
This is where CMOs come in, and in BioPlan Associates’ analyses, bioprocessing CMOs are seeing an overall approximate 15% increase in revenue annually due at least in part to supporting biosimilars development and manufacture (2). This will likely increase during the next few years.
There are three rather highly specialized areas where CMOs provide services to biosimilar developer clients:
Bioprocessing design, product development, and scale-up are now rather routine for biopharmaceutical CMOs. Their clients have a large choice, with more than 100 CMOs worldwide capable of developing bioprocesses--although relatively few can actually manufacture to full GMP standards, and most lack needed capacity to support large late-stage trials and product commercialization. Although biosimilars will have inherently smaller market demands for capacity, the number and variety of products and clients will continue to grow.
Biosimilars and other biopharmaceutical products are highly complex and contain diverse structures and different active agent conformations, including being glycosylated, and having variable carbohydrate polymers attached to protein backbones.
Biosimilarity and related testing is the most commonly outsourced aspect of biosimilars development. Determining and documenting biosimilarity to regulatory agency expectations requires development of massive amounts of data from mass spectrometry and other chemical analyses, biological activities assays, other bioassays to prove similar (or a lack of) immunogenicity, and other adverse effects. Few facilities/companies have all of the required specialized equipment and expertise in-house, with no recourse other than to outsource these tasks. This testing requires large state-of-the-art mass spectrometry and other highly expensive and complex equipment. Commonly, generation of the mass spec data can cost more than $10 million.
Results from BioPlan’s annual survey of biopharmaceutical manufacturing professionals (2) rather consistently show that analytical studies are the most commonly outsourced activity.
Bioassays are a somewhat more problematic area, with much more diversity in testing, including testing for biological activities, both desired and undesired. Biosimilars-supporting bioassays, such as chemical analyses, require specialized equipment along with high levels of expertise, with bioassays needing consistency if they are to be useful. Data study consistently show problems and desired improvements in bioassays (see Figure 1). The top bioassay areas reported in 2015 as needing improvements were:
Other areas with more than 25% citing these as needing improvements included bioassays of proteins with multiple functional domains and better stability assays, with these also among the many bioassays needed to prove biosimilarity.
More than one-third of survey respondents cited problems with comparability, including biosimilarity and bioassays. Various CMOs offer high-end biosimilarity chemical and/or biological testing and documentation services. This includes most of the largest biopharmaceutical CMOs, and CMOs (or perhaps best called CROs) that specialize in these and often other biopharmaceutical testing services.
While much biosimilarity and bioassay testing being outsourced, and with few facilities having the needed equipment and expertise, the market for CMO manufacturing of biosimilars is also large. Manufacturing, even of biosimilars with their smaller markets, requires equipment and staff, likely for a decade or longer during the life of a biosimilars product.
Related to this, the biopharmaceutical CMO industry is highly stratified in terms of size, scale of bioprocessing, and revenue. Top companies, such as Lonza, Boehringer Ingelheim, and Sandoz (Novartis), dominate, with revenues often more than $1 billion/year, mostly from manufacture of commercial products for major markets, at full cGMP. Commercial manufacturing contracts are generally the most profitable.
The mid-tier CMOs most often support development up to GMP, late-stage trials, and commercial manufacturing, including CMC Biologics, FujiFilm Diosynth, KBI Biopharma, and a number of others. These organizations typically have revenues over $100 million annually. Some are moving more into supporting commercial-scale GMP manufacturing, with large-scale fixed stainless steel bioreactors, or large single-use bioreactor systems. A large number of CMOs provide smaller-scale bioprocessing services, such as preclinical and initial clinical studies. These smaller facilities are not candidates for commercial manufacturing, and generally lack biosimilarity testing equipment and expertise.
Biosimilars will be the means by which many CMOs will move up in size and profitability. Approximately 30% of commercial biopharmaceutical products (reference products) are manufactured by CMOs, mostly by the large first tier, and some mid-scale CMOs. Outsourcing of biosimilars manufacturing-along with biosimilarity and bioassays testing-is expected to expand, particularly as biosimilars and their approvals become more common and less risky. With hundreds of biosimilars in development, expect substantial competition and drop outs, as eight or more biosimilars for each major reference product are developed. In fact, biosimilars in a few years are likely to outnumber the innovative biopharmaceuticals. And biosimilars are likely where opportunities for CMOs will similarly expand as they grow their services.
1. BioPlan Associates, Biosimilars/Biobetters Pipeline Database.
2. BioPlan Associates, 13th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production (BioPlan Associates, Inc. Rockville, MD., April 2016).