Volume 87 Issue 2 | pp. 28-29
Issue Date: January 12, 2009

Biosimilars Bet

Merck uses new technology to enter nascent follow-on biologics market
Department: Business
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YEAST AT WORK
GlycoFi's technology could be a big edge in the biosimilars market
Credit: GlycoFi
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YEAST AT WORK
GlycoFi's technology could be a big edge in the biosimilars market
Credit: GlycoFi

THEY AREN'T yet big sellers and there isn't even a clear way to approve them in the U.S. In fact, nobody can agree on a name for them: Biogenerics? Biosimilars? Follow-on biologics? Bioequivalents?

Whatever you call them, therapeutically equivalent versions of biologic drugs—mostly proteins and peptides—have suddenly become an area of interest for drug companies looking to establish some consistency in their portfolios. Merck & Co., which recently unveiled plans to enter the arena in a big way, believes its technology enabling complex proteins to be made in yeast could prove a major advantage as the field matures.

The Food & Drug Administration currently has no clear framework to approve biosimilars, and so far only Omnitrope, a human growth hormone from Sandoz, has made it to U.S. consumers. But the European Union hammered out legislation that led to the launch of a few biosimilars, and industry observers are confident the U.S. will settle on an approval framework under the Obama Administration. With the health care consultancy Decision Resources forecasting some $10 billion in sales of biosimilar versions of 18 major drugs by 2017, the products could be a lucrative addition to any company's portfolio.

For Merck, the launch of its follow-on biologics unit, Merck BioVentures, is part of a larger business diversification effort. The company has been on something of a roller-coaster ride in recent years, with highs from successful new products swiftly turning into lows when a safety concern or generic competitor eviscerates sales of an existing drug. In addition to starting up MBV, the company is also focusing on selling its older, more stable products in growing overseas markets. Combined, those efforts could help the company generate a steadier profit flow.

The company has lofty goals for MBV, according to Frank Clyburn, senior vice president and general manager of the new unit. It plans to sink more than $1.5 billion in R&D into the business by 2015 and expects to have at least five products in late-stage development by 2012. In fact, Merck is planning a 2012 launch for its first product, a form of erythropoietin that will compete with Amgen's anemia drug Aranesp. Clyburn wants to unroll at least five more biosimilars between 2012 and 2017.

Merck has been mapping out its follow-on biologics strategy for some time. In 2006, it paid $400 million for GlycoFi, a biotech firm that had figured out how to produce glycosylated proteins in yeast. Merck then invested in manufacturing capacity in Elkton, Va. The plant is slated to come on-line in 2012, just in time for its first batch of biosimilars to hit the market.

"We think we're actually in a position to develop best-in-class protein therapeutics."

At first blush, Merck's foray into biosimilars seems to stray from its stated mission of "discovering, developing, and delivering novel medicines and vaccines." After all, although traditional small-molecule generic drugs require process chemistry expertise, the market's attitude is that anyone making those drugs is simply a copycat.

But the complexity and cellular origins of a biologic means it cannot be identically reproduced like a small molecule can. Small-molecule generics require simple tests to prove they are equivalent to the drug they are copying, whereas companies pursuing biosimilars must spend years going through much the same process as the innovator did to prove a drug's efficacy and safety. This includes conducting rigorous clinical trials and filing a full biologics license application with FDA.

Furthermore, manufacturing and purifying biologics is an expensive proposition. Companies can't simply rely on active ingredients from low-cost suppliers in Asia, as they often do for traditional generics.

EVEN WHEN a formal regulatory pathway is established, industry experts believe it will be a robust process involving human testing. "When you compare small molecules and biologics, it's clear there's always going to be a significant clinical component to almost any biologic brought forward," says James Blackwell, senior consultant at BioProcess Technology Consultants.

The incentive to develop biosimilars, however, is that the outcome of all the tests is far more predictable because companies are copying a proven winner; spending that money will likely mean some financial reward, a far cry from the high failure rate that plagues the development of totally new drugs.

It's no surprise, then, that several big pharma firms have their eye on the market. In addition to Merck, Roche and Sandoz, the generics arm of Novartis, are both active participants, while AstraZeneca and others have expressed interest. Not to mention the handful of generics firms looking to establish themselves in biosimilars.

But Merck believes its strategy will set it apart. "While many in our industry have strategies that on the surface sound similar to Merck's, a closer look will show that's not the case," Dick Clark, Merck's chief executive officer, said last month.

Indeed, GlycoFi's technology does appear to give Merck an edge over its potential biosimilars competitors. Researchers have long sought to better control the location and number of sugar molecules attached to a protein. Currently, most biologics are made in mammalian cells, specifically Chinese hamster ovaries, which produce a heterogeneous mixture of glycoforms, or different forms of the same glycosylated protein. That heterogeneity has been the primary challenge in producing biosimilars: In essence, there has been no way to make an identical biologic.

GlycoFi, on the other hand, has engineered yeast to make a homogeneous glycoform, which Merck believes offers an edge on several fronts. First, it means a product made by a scientist in the lab at a 3-L scale is the same one produced in a manufacturing plant at the 2,000-L scale. "From a scalability and bioprocess perspective, we think it is going to be a big advantage," Clyburn says.

MERCK ALSO believes the more consistent product profile will help convince insurance companies and physicians to recommend their products. "They'll know what they're getting with the Merck follow-on product as compared to others coming onto the market," Clyburn says.

Importantly, Merck could even offer a product that is more effective than the original drug. Weeding through the dozen or so glycoforms produced by mammalian cells to pluck out the most active is a difficult and impractical task; GlycoFi's technology, on the other hand, allows researchers to easily study the activity of each individual glycoform and narrow in on the most effective one.

"We think we're actually in a position to develop best-in-class protein therapeutics," Clyburn says. He believes the company's technology will permit the production of a specific glycoform of a monoclonal antibody or other protein that features better distribution in targeted tissues, is more potent, and has a better half life than the innovator product.

This "biosuperior" strategy is the real advantage in the nascent field, Blackwell says. The traditional generics sector is almost purely a game of speed and price; the winner is the firm that gets to market fastest and at the lowest cost. Biosimilars, however, are unlikely to be significantly cheaper than the originator drugs, and players will have to compete on different grounds.

At the same time, a more potent molecule often means lower doses. "When you develop a superior process and product, many times it has a lower cost of goods," Blackwell says.

 
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