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Achieving double-digit growth through 2011, biotech-based active pharmaceutical ingredients (APIs) are expected to far surpass growth rates for chemically synthesized APIs.
Biotechnology-based active pharmaceutical ingredients (APIs) account for a smaller portion of the global market for APIs compared with chemically synthesized APIs, but their growth prospects are much stronger. Double-digit growth is projected for the global market for biotech APIs, including APIs from innovator companies. And growth for biogeneric APIs or biosimilars is even more robust, particularly for Asia-Pacific markets.
Crunching the numbers
The global market for biotech APIs was $9.15 billion in 2007 and is expected to reach $16.07 billion by 2011, according to a recent analysis by the Chemical Pharmaceutical Generic Association (CPA, Milan, Italy) (1). These projections represent average annual growth for biotech APIs of 15.1%, nearly triple the projected average annual growth rate of 5–6% for chemically synthesized APIs.
Recombinant proteins account for the largest share of the global biotech API market at $6.18 billion, or 68% of the global market, followed by monoclonal antibodies at nearly $2.04 billion or 22% of the market, and vaccines at $935 million, or 10.2%, according to CPA (1). The leading recombinant proteins are erythropoietin, which accounts for $1.3 billion, or 14.2% of the global market for biotech APIs, recombinant human insulin at $900 million, or 9.8% of the market, and granulocyte colony-stimulating factors at $550 million, or 6% of the market.
Strong growth is projected for both therapeutic proteins and monoclonal antibodies, with projected average annual growth of 15.9% for therapeutic proteins and 14.6% for monoclonal antibodies (1). This double-digit growth is compatible with recent growth in the global market for biotech APIs, which had average annual growth of 18.8% through 1999–2007. Similar growth is projected through 2011 as the market is expected to increase at an average annual rate of 15.1% through 2011 and reach $16.07 billion, according to CPA (1).
Approximately 84% of the global market for biotechnology-based APIs is based in the developed economies in North America, Western Europe, and Japan. The United States accounts for $5.14 billion, or 56.2% of the global market, Western Europe $1.42 billion, or 15.5%, and Japan $780 million, or 8.5%. Among Western European countries, the United Kingdom is the largest producer of biotechnology-based APIs, accounting for roughly 35% of total biotech output in Western Europe.
Growth in these geographic markets will be robust through 2011. Average annual growth of biotech APIs from 2007 through 2011 is projected at 14.0% in North America, 10.6% in Western Europe, and 21.7% in Asia Pacific, which is led by growth of 33.2% in China and 30.1% in India, according to CPA (1).
Increased attention to post-translational modification (PTM), or the chemical modification of a protein, is an important trend in biotech-based API production, according to CPA. Typical PTMs may involve the following:
• Acylation, or the addition of an acyl group to the protein
• Pegylation, or the attachment of polyethylene glycol polymer chains to the protein
• Glycosylation, or the addition of polysaccharides to proteins. Glycosylation is the most prevalent PTM used, accounting for more than one-third of all approved biotech-based APIs (1).
PTM not only enlarges a protein’s function, but also can offer other benefits such as improving product stability, obtaining a slower or a faster action of the product, increasing the biological half-life of a protein, creating new fusion products such as alefaept or etanercept, or influencing immunogenicity.
Unlike the market for chemical-based generic APIs, the current and potential market for biosimilars is less defined. The major reason for this is unlike chemically synthesized APIs, it is more difficult and complex to establish bioequivalence for a biotech-based API. In general, a biosimilar must be identical to the master cell bank of the originator reference product and have the same safety and effectiveness as the originator reference product. The purity of the biosimilar must also not vary outside the limits displayed by the reference product (1). The complex nature of establishing bioequivalence, has in turn, created an uncertain regulatory framework for approving biosimilars, particularly in the US.
Compared with generic drugs using chemically synthesized APIs, the cost of developing a biosimilar product may be more expensive because of the cost and time for additional analytical and clinical testing. Estimates for developing a biosimilar product may be between $10 million and $50 million compared with between $1 million and $2 million for developing a generic drug using chemically synthesized APIs, according to CPA (1).
Despite these challenges, biosimilars are projected to enjoy strong market growth. The biogeneric API market was valued at $1.16 billion in 2007, and $1.28 billion in 2008. The market is expected to reach $3.36 billion by 2011, representing average annual growth of 30.3% (1). This rate of growth, albeit from a much smaller base, is more than double the rate of growth for innovator’s biotech-based APIs. The market for innovative biotech APIs was nearly $8.00 billion in 2007 and $8.84 billion in 2008. The market for innovative biotech APIs is expected to increase at an annual average growth rate of 12.3% to reach $12.71 billion by 2011 (1).
On a geographic basis, China dominates the global market for biogeneric APIs with a projected value of $685 million or 58.8% of the global market in 2007, according to CPA (1). India accounts for $95 million or 8.1%, and other Asia-Pacific countries, $80 million or 6.9%. The dominance of Asian countries, particularly China, for generic biotech-based APIs is expected to continue. The market in China is expected to increase at an average annual growth rate of nearly 30% to reach $1.95 billion and by nearly 27% in India to reach $245 million by 2011 (1). In total, China, India, and other Asia-Pacific countries are expected to account for nearly 71% of the global market for generic biotech-based APIs by 2011. In contrast, the regulated markets in North America and Western Europe, where the regulatory framework for biosimilars is still unfolding, are projected to count for only 10% of the global market for generic biotech APIs by 2011. Western Europe is projected to account for $235 million, or 7.0%, and North America only $90 million or 3.1% (1).
Erthyopoietin is expected to be the leading biogeneric API by 2011, accounting for $1.35 billion of 40.2% of the global market, followed by granulocyte colony-stimulating factors at $800 million or 23.8%. Human growth hormone and interferon alpha are projected to account for 7.4% and 8.6%, respectively (1).
1. “World Biotech APIs Market,” Chemical Pharmaceutical Generic Association (Milan, Italy, 2008).