bio betters major players and market prospects

Biobetters – major players andmarket prospectsA FirstWord Market Intelligence Report

December 2009

Biobetters -- major players and market prospectsPublished December 2009© Copyright 2009 Doctor’s Guide Publishing Limited

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Biobetters -- major players and market prospects

December 2009 i

All Contents Copyright © 2009 Doctor's Guide Publishing Limited. All Rights Reserved

Contents

Executive Summary.............................................................................................1

Biosimilars and the High Demand for New Biological Drugs ........................................2

Biological Drugs ...............................................................................................2

Table 1: Commercially Important Biological Drug Types ....................................2

Biological Drug Market Growth............................................................................3

Biosimilars ......................................................................................................3

Definition of Biosimilars ..................................................................................3

Biosimilar Regulatory Update...........................................................................3

Follow-On Protein Products in the US ................................................................4

The Biosimilar Market.....................................................................................4

Biobetters..........................................................................................................5

Possible Repercussions of Biosimilars...................................................................5

Combating Biosimilars with Biobetters .................................................................5

What Are Biobetters? .....................................................................................5

Types of Biobetter .........................................................................................5

Table 2: Biobetter Drug Design Techniques .....................................................6

Challenges in Biobetter Development .....................................................................7

Innovator Research and Development Strategies...................................................7

Rise of the Biobetter ......................................................................................7

Current Biological Research and Development Climate.........................................7

Difficult Financial Climate for Smaller Biotechnology Companies ............................7

The Need for Differentiation ............................................................................8

Active Comparator Clinical Trials ......................................................................8


ii December 2009


Manufacturing Challenges ..................................................................................8

Biological Manufacturing .................................................................................8

New Manufacturing Methods are Arriving….........................................................9

…But Do Not Obviate the Need for Differentiation.............................................. 10

Regulatory Hurdles for Biobetters...................................................................... 10

Patent Issues .............................................................................................. 10

Immunogenicity and Safety Fears .................................................................. 10

Data Exclusivity in the US ............................................................................. 11

Marketing Challenges for Biobetters .................................................................. 11

The Challenge of Marketing Biobetter Drugs..................................................... 11

Pricing and Reimbursement ........................................................................... 12

Possible Increasing Biosimilar Competition....................................................... 13

Biosimilar Price Reductions............................................................................ 13

Opinions of Thought Leaders on the Future of Biobetters ......................................... 14

Biobetter Strategies........................................................................................... 16

Monoclonal Antibodies..................................................................................... 16

Biosimilar Monoclonal Antibodies.................................................................... 16

The Future for Biobetter Monoclonal Antibodies ................................................ 16

Further Humanisation of Monoclonal Antibodies ................................................ 17

Table 3: Biobetter Monoclonal Antibodies: Towards Fully Human ...................... 17

Additional Antibody Targets........................................................................... 18

Table 4: Biobetter Monoclonal Antibodies: Additional Targets ........................... 19

Antibody-Drug Conjugates ............................................................................ 19

Antibody Fragments ..................................................................................... 19

Table 5: Biobetter Monoclonal Antibodies: Antibody Fragments ........................ 20

Glycoproteins ................................................................................................ 20


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Biobetter Pegylated Glycoproteins .................................................................. 20

Table 6: Biobetter Pegylated Glycoproteins ................................................... 21

Biobetter Glycoproteins: New Technologies ...................................................... 21

Table 7: Biobetter Glycoproteins - New Technologies ...................................... 22

Biobetter Glycoproteins: Improved Manufacturing ............................................. 22

Erythropoietin Drugs .................................................................................... 22

Granulocyte Colony-Stimulating Factor (G-CSF)................................................ 23

Interferons ................................................................................................. 23

Vaccines ....................................................................................................... 24

The Vaccine Market...................................................................................... 24

Biobetter Vaccines: New Delivery Methods....................................................... 24

Table 8: Biobetter Vaccines - New Delivery Methods ....................................... 25

Biobetter Vaccines: New Technologies............................................................. 25

Table 9: Biobetter Vaccines - New Recombinant Technologies .......................... 25

Table 10: Biobetter Vaccines - New Adjuvants ............................................... 25

Table 11: Biobetter Vaccines - New Manufacturing Technology ......................... 26

Biobetter Vaccines: More Strains.................................................................... 26

Table 12: Biobetter Vaccines - Broader Spectrum of Activity ............................ 26

Protein Hormones........................................................................................... 27

The Insulin Market ....................................................................................... 27

Novel Formulations are the Key Biobetter Opportunity ....................................... 27

New Insulin Delivery Methods ........................................................................ 27

Dermatological Insulin.................................................................................. 28

Oral Insulin................................................................................................. 28

Inhaled Insulin ............................................................................................ 28

Table 13: Biobetter Insulin Devices.............................................................. 29


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Biobetter Growth Hormones and other Hormones.............................................. 29

Other Biological Drugs..................................................................................... 29

Table 14: Other Biobetter Examples............................................................. 29

Leading Biobetter Companies .............................................................................. 30

Who are the Biobetter Leaders? ........................................................................ 30

The Biobetter Strategists ................................................................................. 30

Novo Nordisk .............................................................................................. 30

Merck & Co................................................................................................. 31

The Bioleaders ............................................................................................... 32

Roche Group............................................................................................... 32

Biogen Idec ................................................................................................ 33

Amgen....................................................................................................... 33

Sanofi-Aventis............................................................................................. 33

Eli Lilly....................................................................................................... 34

Other Large Pharmaceutical Companies ............................................................. 34

GlaxoSmithKline.......................................................................................... 34

Novartis ..................................................................................................... 35

AstraZeneca ............................................................................................... 35

Pfizer......................................................................................................... 36

Conclusion ....................................................................................................... 37

Abbreviations ................................................................................................... 39

Index.............................................................................................................. 40


December 2009 1


Executive SummaryThe earliest, or first-generation, biological drugs now have patents that have expired orare about to expire. These patent expiries, coupled with rising healthcare costs, havecreated an expectation for the future availability of biosimilars, similar to that of genericsmall-molecule drugs. Biosimilars have arrived already in many jurisdictions and there isa distinct possibility for a rapid growth in the biosimilar market in the coming years.

Innovator pharmaceutical companies can use biobetters to compete with biosimilars.First-generation biological drugs are largely immediate-release formulations, deliveredby subcutaneous injection or infusion. Second-generation, or biobetter, versions of thesedrugs are modified by various biochemical means in order to improve their efficacy,reduce dosing frequency, reduce immunogenicity, improve the side-effect profile, orprovide some other competitive advantage.

Biobetters generally have lower early-stage research and development costs. To besuccessful, however, they will need to have a clear competitive edge, in the form ofclinical superiority or greater ease of use. Only these clearly differentiated biobetters willbe successful in competing with biosimilars and gaining adequate reimbursement frompayers.

This report examines biobetter strategies for the leading types of biological drug,including monoclonal antibodies, glycoproteins, vaccines and hormones and identifieswhere the key opportunities for biobetter drug development lie. In addition, the articlelooks at the current state of biobetter development in leading pharmaceutical companiesand examines possible future strategies for these companies.


2 December 2009


Biosimilars and the High Demand for New BiologicalDrugs

Biological Drugs

With annual revenues currently in excess of US$120 billion, biological drugs are animportant sector of the pharmaceutical market. Biological drugs – also known asbiopharmaceuticals or biologics – contain an active agent made or derived from livingorganisms. Although some are obtained from natural sources, most are manufacturedusing recombinant DNA technology.

Commercially, monoclonal antibody therapies are the most important class of biologicaldrug, with annual revenues in excess of $30 billion (Table 1). Glycoproteins (proteinswith attached sugars) and vaccines are the next two most important biological drugclasses, each having annual revenues of around $25 billion. Glycoprotein drugs withhighest sales revenues are recombinant forms of erythropoietin (epoetin), variousinterferons and recombinant granulocyte colony-stimulating factor (G-CSF) (typesinclude filgrastim and lenograstim).

Annual global revenues for protein hormones – mainly recombinant forms of insulin forpatients with diabetes and recombinant human growth hormone (somatropin) – areroughly $15 billion. Other commercially important biological drugs include fusion proteinsand heparins.

Table 1: Commercially Important Biological Drug TypesBiological Drug Type DetailsMonoclonal antibodies Antibodies manufactured from a single DNA sequence, for the treatment

of a variety of cancers and autoimmune disordersGlycoproteins Glycoprotein hormones and cytokines (cell-signalling proteins), such as:

Erythropoietin, used to control red blood cell production in patientswith anaemiaInterferons, used for hepatitis C and multiple sclerosis treatmentG-CSF, used for the stimulation of white blood cells in oncology

Vaccines Denatured micro-organisms, or recombinant proteins, for diseaseprophylaxis

Protein hormones Simple non-glycosylated hormones such as insulin and somatropinFusion proteins Pfizer (formerly Wyeth) and Amgen’s Enbrel (etanercept) for rheumatoid

arthritis is the main example of this class of drug, created by joining twoor more proteins by fusing their coding genes

Heparins Polysaccharides used for anti-coagulationOthers Examples include enzymes, blood factors and fibrinolytic agents


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Biological Drug Market Growth

By most projections, biological drug use will grow more rapidly than that of small-molecule drugs. As the global population grows and ages, major diseases treated bybiological drugs - particularly cancer and diabetes - are increasing in prevalence.Currently, expensive biological drugs for chronic diseases are confined largely to wealthycountries. However, biological drugs will increasingly penetrate emerging markets in Asiaand South America, as incomes rise and chronic diseases become more common. As aresult, large pharmaceutical companies are racing to fill their dwindling pipelines withbiological therapies.

The earliest, or first-generation, biological drugs have patents that have expired or areabout to expire. Examples include human insulin, the earliest recombinant forms ofhuman growth hormone, erythropoietin, and many interferons. These patent expiries,coupled with the rising cost of already expensive biological drugs, have created anexpectation for future availability of cheaper biological drugs, especially in the US. Thisexpectation is centred on the future availability of ‘generic’ biological drugs, following thesame model as that of generic small-molecule drugs.

Biosimilars

Definition of Biosimilars

Cheaper versions of patent-expired biological therapies are available already, in Europeand Asia. The European Medicines Agency (EMEA) defines these drugs as biosimilars:drugs that are similar, but not identical, to a marketed biological drug (the referencedrug), with the same active ingredient, doses and indications. The large size of biologicaldrug molecules, the complexity of their manufacturing processes, their sensitivity toslight changes in this production process and their potential for immunogenicity (elicitingan immune response to the drug) mean that biosimilars are not completely identical tothe reference drug. Therefore they cannot be regarded as true generic drugs.

Biosimilar Regulatory Update

Biosimilar medicines cannot gain regulatory approval using existing legislation intendedfor small-molecule drugs. The EMEA has introduced new legislation for the EU, whichallows the approval of biosimilar versions of the simpler biological drugs, includingprotein hormones and glycoproteins. Unlike small-molecule generics, some clinicaltesting of the biosimilar is required, in order to show bioequivalence with the referencedrug. Additionally, most European governments are not allowing automatic substitutionof branded drugs with biosimilars at pharmacies, although this practice is common forsmall-molecule generics. Nevertheless, the EMEA has approved multiple versions ofbiosimilar recombinant growth hormones, erythropoietin and G-CSF.


4 December 2009


Copies of biological drugs are also available in less-regulated Asian markets. Othercountries, including Australia, have adopted the EMEA biosimilar guidelines. TheJapanese regulatory authorities issued guidelines for biosimilars (termed ‘follow-onbiologics’ in that country) in March 2009 and approved the first example, a somatropin,in June 2009. A biosimilar somatropin is also approved in Canada, although HealthCanada has not yet issued final guidelines for the approval of what it terms ‘subsequent-entry biologics’.

Follow-On Protein Products in the US

In the US, however, there is no regulatory pathway in place for the approval ofbiosimilars. The structure of the US Food and Drug Administration (FDA) regulationsallows the approval of a few simple biological drugs – including somatropin – through anabbreviated regulatory pathway. The approval of all other biosimilars will, however,require the creation of new legislation. The current US administration has indicated itsupports introduction of this legislation and two such bills were introduced to the Houseof Representatives in March 2009. However, the FDA is unlikely to be able to approveany biosimilars (commonly termed ‘follow-on protein products’ or ‘follow-on-biologics’ inthe US) until 2013, at the very earliest.

The Biosimilar Market

Currently, the biosimilar drug market accounts for only around one percent of the totalbiological drug market and is largely restricted to less-regulated Asian markets.Biosimilars are likely to remain more expensive to develop than small-molecule generics,owing to the clinical testing requirements. Biosimilars are therefore unlikely to offer thesame sharp price discounts achieved by generics. Additionally, the lack of substitution atpharmacies will mean high marketing costs.

Nevertheless, there is a distinct possibility for rapid growth in the biosimilar market inthe coming years. This will become increasingly likely if a biosimilar regulatory pathwayis implemented in the US. If biosimilars build a good safety profile in Europe and Japanover a number of years and this leads to introduction of automatic substitution inpharmacies, another boost to the biosimilar market will follow.


December 2009 5


Biobetters

Possible Repercussions of Biosimilars

If lower-cost biosimilars become an established sector of the biological drug market inNorth America, Europe and Japan, what will be the repercussions? The majorconsequence is likely to be downward pressure on prices. Although biosimilars will notoffer the large price reductions offered by small-molecule generics, even a modestundercutting of price will limit the pricing options for branded biological drugs. Furtherconsequences of biosimilar competition could be a lowering of the commercial viability ofbiological drugs with smaller potential markets. Novel biological therapies for rarerdiseases and personalised therapeutic approaches - which necessarily have a smallerpotential patient pool - may be less viable when future biosimilar competition is expectedto reduce revenues.

Combating Biosimilars with Biobetters

What Are Biobetters?

Whether or not biosimilars become established will be revealed over the coming years.There is no guarantee that biosimilars will become accepted, although some degree ofbiosimilar success is likely. However, there is one, often overlooked strategy thatinnovator pharmaceutical and biotechnology companies can use to compete withbiosimilars: ‘biobetters’.

First-generation biological drugs are largely immediate-release formulations, deliveredby subcutaneous injection or infusion. These injected biological drugs can be modified byvarious biochemical means in order to improve their efficacy, reduce dosing frequency,reduce immunogenicity, improve the side-effect profile, or provide some othercompetitive advantage. In this article, second-generation drugs produced using suchprinciples will be termed ‘biobetters’.

Types of Biobetter

Techniques for developing biobetters involve engineering the protein structure of thedrug. Engineering can entail the alteration of the amino acid sequences or theglycocomponent of a glycosylated protein, or the attachment of proteins or otherchemicals such as polyethylene glycol (PEG: pegylation).


6 December 2009


Design techniques for second-generation biologicals are grouped into four types,depending on their purpose (Table 2). Novel biobetter formulations allow alternative andmore convenient dosage formats, potentially leading to improved patient compliance.

Table 2: Biobetter Drug Design TechniquesTechnique Description Suitable Biological Drug

TypesNew formulation Development of controlled-release,

subcutaneous injection, oral, dermatological orinhaled formulations

All biological drugs

Engineering toproduce longer-acting drug

Pegylation, albumin fusion or conjugation withcarrier protein, in order to increase half life

Mainly glycoproteins, andsimple hormones

Engineering toimprove drugfunction

Protein engineering, glycosylation, addition ofconjugates and adjuvants, design of antibodyfragments and others


New manufacturingmethod

Development of microbial, insect and plant-based cell manufacturing systems


Techniques to increase the half-life of a biological drug in the body can lead to reduceddosing frequency, improved bioavailability and reduced toxicity. Methods to achieve thisinclude covalent conjugation with PEG (pegylation), which has already been proved toincrease the half-life of drugs in the body. Other methods for increasing a drug’sduration of action include controlled-release formulations, fusion with human albuminserum and conjugation with fusion proteins.

A third design technique uses more radical protein engineering to alter the function andclinical effectiveness of a biological drug. Examples include conjugating a monoclonalantibody with a cytotoxic agent, engineering a fragment of monoclonal antibody, re-engineering live or inactivated vaccines as recombinant vaccines and altering theglycosylation pattern of a glycoprotein in order to alter its pharmacokinetic properties.

A fourth technique is to improve the protein manufacturing system.

Of course, biobetters may be produced by combining a number of design techniquesfrom the four available. For example, glycoengineering of a protein may both improve itsefficacy and increase its half-life.


December 2009 7


Challenges in Biobetter Development

Innovator Research and Development Strategies

Rise of the Biobetter

The expense of biological drug development, increasing competition from small-moleculedrugs and other biological drugs for the same disease targets, the global financial crisisand the imminent threat of biosimilars are leading to increasing interest in thedevelopment of biobetters. These generally have lower early-stage research anddevelopment costs, and the developing company can choose an active or placebocomparator in clinical trials, depending on what is more suitable for their developmentstrategy. However, clear superiority in clinical outcome or ease of use will be essential insuccessful future biobetter development strategies.

Current Biological Research and Development Climate

Biological drugs are much more expensive to develop than traditional small-moleculedrugs. These higher costs must be recouped in higher selling-prices, which in turn candecrease the chances of obtaining satisfactory reimbursement from governments andhealthcare providers. Biological drugs have been developed for many of the morecommon cancers and autoimmune disorders; the remaining targets often have lowerpatient populations, and are less commercially attractive. Often multiple drugs are indevelopment in a crowded biological drug pipeline for these remaining targets.

Furthermore, if lower-cost biosimilars become established in major markets, they couldprecipitate price reductions among all competitor drugs in a given class. Competitionfrom small-molecule drugs is increasing in some categories, such as the erosion of salesof Roche’s breast cancer monoclonal antibody Herceptin (trastuzumab) byGlaxoSmithKline’s (GSK) Tykerb (lapatanib).

Difficult Financial Climate for Smaller Biotechnology Companies

The challenge of biological drug development is being heightened by today’s moredifficult financial climate. The current global economic crisis is causing a drought infunding for smaller biotechnology companies, which require large amounts of capital. Asa result, the established trend of large pharmaceutical companies licensing biologicalpipeline products and acquiring smaller biotechnology companies is likely to accelerate.

Smaller biotechnology companies need funding for late-stage development andmarketing expertise. Large pharmaceutical companies need to buy innovation to fill thinpipelines. It is true that these larger pharmaceutical companies are merging, reducing innumber and becoming more risk-averse. In the longer term, however, declining funds


8 December 2009


for research and development in larger pharmaceutical companies should maintain theirinterest in acquiring pipeline biological drugs from external sources.

The Need for Differentiation

As large pharmaceutical companies search the market for innovative biologicaltechnology and biological therapies to fill their pipelines, those most likely to attract theirattention are candidates that allow clear differentiation from first-generation products.Examples include biobetters that are longer-acting versions of existing blockbusterbiological drugs in a late stage of development, and technology platforms or deliverydevices offering improved formulations. Such options will be particularly attractive formarketers of first-generation biologicals nearing the end of their patented period andrequiring a follow-on version.

The need for differentiation will be paramount, if biosimilars become established in aparticular section of the market. If this happens, there is likely to be downward pricingpressure on all drugs in that particular class and only drugs clearly clinically superior willescape the effect.

Marginal differentiation among novel branded biological entrants, such as a lack of clearclinical superiority or only marginally more convenient formulations, will leave themmore vulnerable to biosimilar competition.

Active Comparator Clinical Trials

Currently the FDA and the EMEA do not require the use of an active comparator in trialsconducted for the approval of a new drug, although developers often use them when itwould be unethical to use placebo-controlled clinical trials (for example, for certainpatients with cancer). In the near future, however, the use of active comparator trials islikely to become more common. With demonstrated clinical superiority of new biologicaldrugs likely to become of critical importance, active comparator trials will be required toconvince both pharmaceutical companies to license a drug and also healthcare providersto adopt and reimburse such therapies. The motivation for pharmaceutical companies toconduct comparative testing is likely to increase over time, as the marketplacedemonstrates demand for this information.

Manufacturing Challenges

Biological Manufacturing

Biologicals are manufactured using complex manufacturing processes involving livingcells. A majority of currently-marketed biological drug are manufactured in mammaliancells, although some simpler non-glycosylated biologicals are manufactured in


December 2009 9


Escherichia coli bacteria. Compared with small-molecule drug manufacture, mammaliancell line manufacturing requires more stages and more rigorous quality control, andthere is greater possibility of contamination. The raw materials and cell lines required formanufacture may be subject to limited supply or be restricted by special regulations inmultiple jurisdictions.

Inevitable minor variations in the biological manufacturing process - such as the purityof raw materials, the cell culture conditions or storage conditions - can cause a degree ofheterogeneity in the final product. The manufacturing process defines a particularbiological drug in a way not applicable to small-molecule drugs. For example, theprocess may subtly alter the three-dimensional and complex folding properties of theprotein. The variability in glycosylation patterns inherent in mammalian cell culturemanufacturing methods is a particular problem because it may cause variations in theimmunogenicity or potency of the final product.

New Manufacturing Methods are Arriving…

Compared with older, first-generation biological drugs, biobetter manufacturers can takeadvantage of newer manufacturing methods. Newer manufacturing systems for the morecomplex, glycosylated biologicals include yeast, insect and plant cell-based systems.Compared with mammalian cell lines these systems tend to be simpler and producehigher yields of therapeutic proteins at lower cost. In addition, they have the potential toyield a much more homogeneous product in terms of glycosylation patterns. Yeast,bacterial and plant strains, engineered to eliminate immunogenic components and tobetter represent glycosylation patterns found in human proteins, are promising methodsto replace mammalian cell lines. Additionally, antibody fragments, destined to join full-size monoclonal antibodies in usefulness as therapeutics, are particularly suitable formanufacture in microbial and yeast systems.

Another newer manufacturing method that may help in the development of competitivebiobetters is the production of therapeutic proteins from the milk of transgenic animals(animals with an implanted gene for the therapeutic protein). This method may allow theproduction of high volumes of proteins at low cost. Also, in the field of monoclonalantibodies, antibody fragments may prove to be cheaper and easier to manufacture.

Many Indian and Chinese pharmaceutical companies have biological manufacturingtechnologies comparable with those in North America and Europe but with a lower unitcost. Asian manufacturing sites are increasingly complying with good manufacturingpractice guidelines (GMP) and gaining FDA and EMEA approval. These sites offer theopportunity for the contract manufacturing of cheaper biobetters.


10 December 2009


…But Do Not Obviate the Need for Differentiation

Although these new manufacturing methods may reduce the production costs of abiobetter, this does not obviate the need for differentiation. This point is illustrated byShire’s ill-fated erythropoietin, Dynepo (epoetin delta). In 2007, Shire launched Dynepoas a unique erythropoietin drug: the only one produced in human cells. However, partlybecause Dynepo was not sufficiently clinically superior to any of its competitors, saleswere disappointing. Shire ceased commercialisation in 2008.

Regulatory Hurdles for Biobetters

Patent Issues

Biological drugs are protected by patent suites that protect not only the entire moleculeor parts of it, but also humanisation techniques, production processes, methods of useand indications of use. These patents are more complex than those protecting small-molecule drugs. Additionally, the FDA does not maintain the listing of the patents relatedto biological drugs (again, unlike small molecules).

The decision to develop a biobetter version of an existing therapy will involve complexanalysis of the expiry of patents, and even the outcome of litigation, that could affect theproduct. On the other hand, the complexity of biological drugs and the patentsprotecting them means that these patents may offer only partial protection. Biologicaldrug patents may turn out to be easier to circumvent than those on small-moleculedrugs, e.g. by making a very small change in a protein, but preserving the core design.

Immunogenicity and Safety Fears

Future biobetter drug candidates are likely to face the challenge of increased regulatoryconcern over the safety and immunogenicity of biological drugs. It has long been knownthat biological drugs can cause immunogenicity. This involves the drug stimulating animmune reaction, resulting in the production of antibodies against the drug andunintended clinical consequences.

The concern of regulatory authorities has been exacerbated by recent immunogenicityissues affecting biological drugs. A well-known example is the sudden increase in reportsof pure red cell aplasia (PRCA) in patients receiving subcutaneous injection oferythropoietin drugs during 1999-2002. Although the exact reasons remain unclear, it isnow thought that leachates from the drug’s packaging served as immunologicaladjuvants causing immunogenicity and the adverse reactions.

No standard method for the preclinical screening of protein therapeutics forimmunogenicity currently exists. In future, immunogenicity issues might be reduced by


December 2009 11


greater use of predictive animal modelling, or by using computer models to avoid theinclusion of immunogenic portions of proteins early in drug development. For theforeseeable future, however, immunogenicity remains a primary safety concern forregulators, who are likely to insist on stringent post-marketing monitoring programmesand risk management strategies for new biobetters. Rarer immunogenic effects can onlybe detected and assessed when large numbers of patients have been treated with aproduct.

The need for extended pharmacovigilance will be reinforced by other safety fearsaffecting biological drugs. These include the increase in progressive multifocalleukoencephalopathy in patients with multiple sclerosis taking Biogen Idec and Elan’sTysabri (natalizumab) and fears of increased risk of cancers and cardiovascularconditions in patients taking anti-TNF (tumour necrosis factor) biological therapies.

Data Exclusivity in the US

The introduction of a pathway for biosimilars in the US is likely to be coupled withintroduction a period of data exclusivity for innovative biological drugs. Indeed, thelength of this data exclusivity period is the main issue holding up the introduction ofbiosimilar legislation. Groups representing generic pharmaceutical manufacturers arecalling for a much shorter data exclusivity period than groups representing companiesrelying on innovative biological drugs. However, the adoption of too short a period islikely to increase the difficulty for pharmaceutical companies of recouping theirinvestment in the research and development costs of new biological drugs. This willdiscourage the development of biobetters and favour biosimilars.

Marketing Challenges for Biobetters

Biobetter drugs will face an increasingly challenging market environment in the comingyears. Future biosimilar competition will exacerbate the difficulty in obtaining adequatereimbursement from governments and healthcare providers. Demonstrated clinicalsuperiority, and innovative marketing techniques, are likely features of the commerciallysuccessful biobetters of future years.

The Challenge of Marketing Biobetter Drugs

Although biobetter drugs may benefit from lower early-stage research and developmentcosts than novel biological drugs, generally they will have all the marketing costsassociated with novel biological drugs. Options for marketing biological drugs are oftenmore limited and more time-consuming than for conventional small-molecule drugs.These drugs are typically marketed to hospital-based specialists and require a morescientific, data-driven marketing campaign.


12 December 2009


The marketing of biobetters will require traditional methods of drug marketing, includingdirect contact with physicians through representation, samples, direct advertising andsponsorship of education. Additionally biobetters must be marketed to consumers, andthird-party payers through sponsorship, advertising and media releases.

Biobetters will often be marketing to patients with chronic conditions such as multiplesclerosis, diabetes or rheumatoid arthritis. These patients tend to be well informed abouttheir condition. Biobetter marketing to these patients will increasingly requiresophisticated and personalised approaches, such as use of Web2.0 marketingapproaches, rather than broader-based techniques such as direct-to-consumeradvertising (in the US and New Zealand). This personalisation will help biobetters tocompete against established market incumbents.

Pricing and Reimbursement

The challenge of gaining adequate reimbursement for biological drugs is likely toincrease in the coming years. Biological drugs are increasingly subjected to rigoroushealth economic assessments, such as those conducted by centralised governmentbodies, including the National Institute for Health and Clinical Excellence (NICE) in theUK. The NICE has rejected a number of biological therapies as not cost-effective by theircriteria. This initially included Roche and Novartis’ Lucentis (ranibizumab) for age-relatedmacular degeneration, although this decision was later reversed.

In other countries, such as the US or France, reimbursement for biological therapies hasbeen much more generous. However this may not continue for much longer. In the US,the world's largest market for biological therapies, the current administration is intent onhealthcare reform. Apart from the introduction of a regulatory pathway for the futureapproval of biosimilars, an effort to reduce healthcare costs is likely to put downwardpressure on all biological drugs in the US.

Newer biological therapies experience more access restrictions when payers do not valuethe incremental clinical benefit offered by the treatment. This illustrates that innovationin itself will not be sufficient for a biobetter. Payers must be convinced of real clinicalbenefit, such as life extension rather than mere life improvement.

To combat future pressures on healthcare spending, biobetter manufacturers are likelyto employ innovative strategies. Returning to the case of Lucentis in the UK gives arecent example. Novartis, which markets it in the UK, has struck an agreement with theUK National Health Service (NHS), whereby the NHS funds the initial injections ofLucentis, but Novartis covers the cost of the drug beyond 14 injections.

Other possible techniques that biobetter manufacturers may use to gain reimbursementinclude annual price caps for a therapy, help with patients’ co-payments where these


December 2009 13


exist, lowering costs to the current standard of care and payment for only the firstportion of a treatment.

Possible Increasing Biosimilar Competition

Currently the EMEA is of the opinion that healthcare practitioners must decide if abiosimilar is substituted for an innovator’s reference drug. Most European states havebanned automatic substitution of biosimilars for branded biological drugs in pharmacies.Similarly in the US, the FDA does not hold the opinion that follow-on biologicals,approved through an abbreviated pathway, are equivalent to branded versions.

It is uncertain whether the automatic substitution of biosimilars will ever becomecommon. If patients and healthcare practitioners accept biosimilars and automaticsubstitution becomes common, this will boost biosimilars considerably and providestrong competition for biobetter manufacturers. A factor already favouring biosimilars isthat regulations in Europe do not require biosimilars to have a unique international non-proprietary name (INN), which would aid possible future automatic substitution.

Biosimilar Price Reductions

What will be the effect of increasing biosimilar market penetration? If biosimilars becomean established sector of the pharmaceutical market in both North America and Europe,as seems distinctly possible, this is likely to lead to price reductions. This will not matchthose reductions achieved by small-molecule generics, owing to the highermanufacturing, clinical testing and marketing costs of biosimilars. Estimates vary, butanalysts typically envisage biosimilars retailing at a 10-25 percent reduction, comparedwith innovator drugs. This is likely to lead to a corresponding downward pressure on theprices of all biological drugs in a particular class.

Unless biobetters are clearly demarcated as clinically superior they could struggle in theface of this biosimilar price-reducing effect. Even when a biobetter is markedly clinicallysuperior, the scope for price rises immediately after launch - in an attempt to recouprevenues lost to future biosimilar competition - will be limited, owing to the already highprice of biological drugs.


14 December 2009


Opinions of Thought Leaders on the Future ofBiobettersTo gauge current opinion, a number of thought-leaders were interviewed. They areinvolved in the development of improved monoclonal antibodies, glycoproteins, vaccinesand insulin. Their opinions on the future direction of biobetter development in thesefields are reproduced below. Areas that experts identified as areas favourable forbiobetter development included antibody-drug conjugates, adjuvated influenza vaccinesand oral formulations of interferons and insulin.

In the monoclonal antibody field, Dr. Frank Osterroth, Senior Vice PresidentBiotherapeutics, Biotest (Germany) is of the opinion that antibody-drug conjugates willachieve future success:

‘After the success of monoclonal antibodies in the improvement of both efficacy as wellas tolerability in rheumatoid arthritis and other autoimmune diseases compared to theconventional DMARDs [disease-modifying anti-rheumatic drugs], I believe monoclonalantibodies will continue to increase their position in cancer indications. I expectnumerous new monoclonal antibodies and immunoconjugates to deliver a high value topatients both as monotherapy and in combination with already establishedchemotherapies. Patients with cancers that are refractory to conventional therapies willprofit most from these new agents. The next important example might be Genentech’strastuzumab conjugated with DM1 for the treatment of refractory forms of metastaticbreast cancer.’

For vaccines, David S Fedson MD, former Professor of Medicine, University of VirginiaSchool of Medicine and former Director of Medical Affairs, Aventis Pasteur MSD (nowSanofi Pasteur MSD), believes that influenza vaccines will be of key future importance,and that cell culture manufacturing methods and novel adjuvants will be the two mostimportant methods for improving existing influenza vaccines:

‘The only industrial capacity the world will have for manufacturing influenza vaccinesover the next few years will be the egg-based facilities currently found in the producingcountries. There is not going to be a real increment in vaccine production capacity untilcell culture facilities come online in late 2011 and 2012. Until then we will be stuck withexisting systems. It would be possible to produce a larger number of doses of pandemicvaccines - and this would translate into sales for vaccine companies - if there were broadagreement on producing antigen-sparing adjuvated vaccines.’

Nadav Kidron, Chief Executive Officer, President and Director, Oramed (Israel) believesnovel insulin formulations offer the greatest potential for improvements over existingtherapies:


December 2009 15


‘I see the greatest clinical and commercial opportunities in improving insulin-based drugsin the development of an oral insulin capsule. Firstly an oral insulin capsule would helpimprove the compliance rate. Secondly and the most important difference is that an oralinsulin capsule mimics the natural physiological processes of the body and the insulin isdelivered to the liver first and then the bloodstream.’

Biobetter oral formulations also have potential in the interferon sector, according to Dr.Joseph M. Cummins, founder and Chief Executive Officer, Amarillo Biosciences:

‘I believe that every clinical condition that is treated with high dose injectable interferoncan be treated with low-dose oral interferon without the toxicity. Recombinant interferonhas been used orally with success in animals and man.’

In the following section, these biobetter strategies are explored more fully, for each ofthe major types of biological drug.


16 December 2009


Biobetter StrategiesThe key strategy for biobetter developers is differentiation from first-generationbiological drugs. How much differentiation will be required and which technologies willallow the development of commercially viable biobetters in the different biological drugtypes? This section examines possible future strategies.

Monoclonal Antibodies

Biosimilar Monoclonal Antibodies

The threat from biosimilar monoclonal antibodies in key European, North American andJapanese markets has not yet arrived. Nevertheless, biosimilar monoclonal antibodytherapeutics are already available in India. Key US and European patents on the currentlargest-selling, first-generation monoclonal antibodies, Mabthera/Rituxan, Herceptin andRemicade, may expire before 2014, with Avastin following suit some years later. Thesedrugs will be the prime targets for biosimilar manufacturers:

Roche and Biogen Idec’s Mabthera/Rituxan (rituximab), targeting CD20 andindicated for non-Hodgkin’s lymphoma and rheumatoid arthritis

Roche’s Avastin (bevacizumab), targeting vascular endothelial growth factor(VEGF) and indicated for a number of cancers including colorectal, non-small celllung and breast

Roche’s Herceptin (trastuzumab), targeting HER2 and indicated for HER2-positivebreast cancer

Johnson & Johnson and Merck & Co.’s Remicade (infliximab), targeting TNF-alpha(Remicade rights were shared by Johnson & Johnson and Schering-Plough prior tothe November 2009 merger between Schering-Plough and Merck & Co. Arbitrationis in progress to determine whether Johnson & Johnson or Merck gain control aftermerger.)

The Future for Biobetter Monoclonal Antibodies

Technology improvements, rather than new formulations, are likely to be the key meansfor producing biobetter monoclonal antibodies. These technologies are likely to includefurther humanisation of antibodies, increasing the number of targets to which antibodiesbind, antibody-drug conjugates and antibody fragments.


December 2009 17


Further Humanisation of Monoclonal Antibodies

A key biobetter strategy in the monoclonal antibody sector of the biological drug marketis likely to be re-engineering of monoclonal antibodies, with the aim of reducing theirimmunogenicity or increasing their efficacy. The main technique for achieving this will bereducing the proportion of murine sequences in monoclonal antibodies, and increasingthe number of human sequences.

Older, chimaeric monoclonal antibodies (those containing both murine and humanprotein sequences) such as Mabthera/Rituxan and Remicade, will be replaced withhumanised variants containing fewer murine sequences. Biobetter developers willreplace humanised monoclonal antibodies (such as Avastin and Herceptin) with fullyhuman biobetters. This strategy is already underway and has been successfullyemployed by pharmaceutical companies. For example Abbott’s Humira (adalimumab) isa fully human biobetter version of the chimaeric Remicade (Table 3).

Table 3: Biobetter Monoclonal Antibodies: Towards Fully HumanBiobetter Description Current Development

PhaseHumira (adalimumab,Abbott)

Fully human monoclonal antibodytargeting TNF-alphaPotential biobetter for Remicade(infliximab, Johnson & Johnson/Merck& Co.*)

Marketed

Simponi (golimumab,Johnson & Johnson/Merck &Co.)*

Fully human monoclonal antibodytargeting TNF-alphaPotential biobetter for Remicade

Approved (US FDA andEMEA, 2009)

Motavizumab (AstraZeneca) Humanised monoclonal antibodybinding to RSV FPotential biobetter for Synagis(palivizumab, AstraZeneca/Abbott)

Submitted (US FDA, 2008)

Arzerra (ofatumumab,GlaxoSmithKline/Genmab)

Fully human monoclonal antibodytargeting CD20Potential biobetter forMabthera/Rituxan (rituximab, Roche)

Approved (chroniclymphocytic leukaemia, USFDA October 2009); PhaseIII (non-Hodgkin’slymphoma, rheumatoidarthritis)

Ocrelizumab (Roche/BiogenIdec)

Humanised monoclonal antibodytargeting CD20Potential biobetter forMabthera/Rituxan

Phase III

RG7159 (Roche) Humanised monoclonal antibodytargeting CD20Potential biobetter forMabthera/Rituxan

Phase II

Veltuzumab(Immunomedics/Nycomed)

Humanised monoclonal antibodytargeting CD20Potential biobetter for

Phase II


18 December 2009


Biobetter Description Current DevelopmentPhase

Mabthera/RituxanCD20 antibody (Eli Lilly) Potential biobetter for

Mabthera/RituxanPhase II

Ramucirumab/IMC1121B (EliLilly)

Fully human monoclonal antibodytargeting VEGFR-2 Potential biobetter for Avastin(bevacizumab, Roche)

Phase III

Zalutumumab/HuMax-EGFr(Genmab)

Fully human monoclonal antibodytargeting EGFRPotential biobetter for Erbitux(cetuximab, Eli Lilly/Bristol-MyersSquibb/Merck KGaA)

Phase III

Necitumumab/IMC-11F8 (EliLilly)

Fully human monoclonal antibodytargeting EGFRPotential biobetter for Erbitux

Phase II

VEGFR: vascular endothelial growth factor receptor; EGFR: epidermal growth factor receptor; TNF: tumour necrosisfactor; RSV F: respiratory syncytial virus F protein

*REMICADE/SIMPONI rights were shared by Johnson & Johnson and Schering-Plough prior to the November 2009 mergerbetween Schering-Plough and Merck & Co. Arbitration is in progress to determine whether Johnson & Johnson or Merckgain control after the merger

Additional Antibody Targets

Another technology improvement for existing monoclonal antibody therapeutics will be toincrease the number of binding targets.

Trion is developing engineered monoclonal antibodies that are bispecific; that is, capableof binding to two different targets. This is achieved by combining the halves of twodistinct full-sized antibodies, a tumour-specific mouse antibody and a T-cell specific ratantibody in one molecule. Trion’s Rexomun (ertumaxomab), currently in Phase IItesting, is able to bind to the HER2 target in patients with breast cancer in a mannersimilar to that of Herceptin. However, as a bispecific antibody, Rexomun is also able tobind to T-cells, recruiting them in a second defence mechanism against the tumour.

Roche is investigating a novel monoclonal antibody, pertuzumab, for use in combinationwith Herceptin for patients with HER2-positive breast cancer. Pertuzumab inhibits thepairing of HER2 with other HER receptors, a key mechanism of tumour growth inpatients with this type of breast cancer (Table 4).


December 2009 19


Table 4: Biobetter Monoclonal Antibodies: Additional TargetsBiobetter Description Current

DevelopmentPhase

Pertuzumab in combinationwith Herceptin (trastuzumab,Roche)

Humanised monoclonal antibody acting asHER2 dimerisation inhibitorPotential biobetter for Herceptin alone

Phase II/III

Rexomun (ertumaxomab,Trion)

Bispecific antibody targeting HER2Potential biobetter for Herceptin

Phase II

Antibody-Drug Conjugates

The strategy of further humanisation has already been employed for some antibodytargets, but has not always resulted in great clinical benefit or reduced immunogenicityand side effects. Opportunities to increase the number of targets for particularmonoclonal antibodies are limited. Companies are therefore investigating othertechniques, including antibody-drug conjugates and fragments.

Antibody-drug conjugates are monoclonal antibodies linked to cytotoxic drugs orradioactive isotopes, designed to bind to, and destroy specific cancer cells. Someantibody-drug conjugates containing radioisotopes have already been launched, buthave not enjoyed great commercial success. Antibody-drug conjugates are morechallenging to design and manufacture than traditional monoclonal antibodies.

Nevertheless, biobetter conjugated versions of monoclonal antibodies are likely toachieve some future commercial viability. Antibody-drug conjugates have potential forsignificant therapeutic benefit, if they are capable of destroying cancer cells, rather thanmerely slowing their proliferation. Roche is currently conducting clinical trials of aconjugated biobetter version of Herceptin in collaboration with ImmunoGen.Trastuzumab-DM1 is a humanised antibody conjugated with the cytotoxic agent DM1, forthe treatment of HER2-positive metastatic breast cancer. It is undergoing Phase II/IIItesting.

Antibody Fragments

Currently-marketed monoclonal antibody therapeutics are mostly full-sized antibodies,matching the size of naturally-occurring human antibodies. Fragments of monoclonalantibodies have significant future therapeutic potential because their smaller size mayallow them to reach a host of targets unavailable to full-sized monoclonal antibodies.

Antibody fragments targeting the same receptors as older, full-sized monoclonalantibodies are also biobetter candidates. Such fragments offer the possibility for easiermanufacturing in microbial systems and the potential advantage of greater tissuepenetration. Certain antibody fragments have displayed increased stability and hence


20 December 2009


potential for decreased dosing schedules or use in pulmonary or dermatologicalformulations.

Roche and Novartis’ Lucentis (ranibizumab) is a fragment of the parent monoclonalantibody Avastin, both of which target VEGF. Following the serendipitous discovery thatAvastin was of use in treating age-related macular degeneration, Genentech (nowRoche) developed Lucentis, specifically designed for ophthalmic applications. Otherantibody fragments in development (Table 5) include those targeting TNF, which arehence potential biobetter versions of Remicade or Humira.

Table 5: Biobetter Monoclonal Antibodies: Antibody FragmentsBiobetter Description Current

DevelopmentPhase

Lucentis (ranibizumab,Roche/Novartis)

Antibody fragment targeting VEGF, developedfrom Avastin

Marketed

Cimzia (certolizumabpegol, UCB)

Pegylated humanised antibody fragmenttargeting TNF-alphaPotential biobetter for Remicade

Marketed

ART621 (Arana) Antibody fragment (domain antibody) targetingTNFPotential biobetter for Remicade

Phase II

ESBA105 (ESBATech) Antibody fragment targeting TNFPotential biobetter for Remicade

Phase II

Glycoproteins

Carbohydrate groups are attached to many different proteins to form glycoproteins. Themost commercially important of these are erythropoietin, G-CSF, α-interferon andβ-interferon.

Biobetter Pegylated Glycoproteins

The most successful biobetter glycoproteins have been longer-acting, more-convenientpegylated versions of first-generation glycoprotein drugs (Table 6). Pegylated epoetinbeta, G-CSF and α-interferon have enjoyed considerable commercial success, althoughmarket opportunities remain for pegylated β-interferon and improved pegylatedformulations of all glycoproteins.


December 2009 21


Table 6: Biobetter Pegylated GlycoproteinsBiobetter Description Current Development

PhaseMircera (methoxypolyethylene glycol-epoetin beta,Roche)

Pegylated epoetin betaBiobetter for NeoRecormon/Epogin (epoetin beta,Roche)

Marketed

Neulasta(pegfilgrastim,Amgen)

Pegylated G-CSFBiobetter for Neupogen (filgrastim, Amgen)

Marketed

Pegasys(peginterferon alfa-2a, Roche)

Pegylated interferonBiobetter for Roferon-A (interferon alfa-2a,Roche)

Marketed

Pegintron(peginterferon alfa-2b, Merck & Co.[formerly Schering-Plough])

Pegylated interferonBiobetter for Intron A (interferon alfa-2b, Merck& Co. [formerly Schering-Plough])

Marketed

PEG IFN(peginterferonbeta-1a, BiogenIdec)

Pegylated interferonPossible biobetter for Avonex (interferon beta-1a, Biogen Idec) or Rebif (interferon beta-1a,Merck KGaA)

Phase III

Maxy-G34(pegylated G-CSF,Maxygen)

Pegylated G-CSFPossible biobetter for Neupogen

Phase II

Biobetter Glycoproteins: New Technologies

In addition to pegylation, a range of other new technologies is under development aimedat biobetter glycoproteins (Table 7). Many of these technologies attempt to lengthen thehalf-life of the drug in the body and hence increase convenience and patient compliance.Techniques include engineering the protein to alter its glycosylation pattern or itssequence of amino acids, fusing it with albumin or a carrier protein, and usingcontrolled-release technology.

Medgenics are developing Epodure, a device to deliver a sustained dose of erythropoietinover a period of many months. The device, termed a biopump, is an explant of thepatient’s own skin with genes inserted that express and secrete erythropoietin.


22 December 2009


Table 7: Biobetter Glycoproteins - New TechnologiesBiobetter Description Current

Development PhaseAranesp(darbepoetin alfa,Amgen)

Hyper-glycosylated analogue of epoetin alfaBiobetter for Epogen/Procrit/Eprex (epoetin alfa,Amgen/Johnson & Johnson)

Marketed

Albuferon (ABF656,Human GenomeSciences/Novartis)

Albumin-interferon fusion proteinPossible biobetter for Intron A (interferon alfa-2b,Merck & Co. [formerly Schering-Plough])

Phase III

Locteron (interferonalfa-2, Biolex)

Recombinant interferon alfa (BLX-883), combinedwith PolyActive controlled-release technologyPossible biobetter for Pegasys or Pegintron

Phase II

IFN Alpha XL(interferon alfa-2b,Flamel)

Long-acting interferon alfa-2b adsorbed on carrierprotein (Medusa platform)Possible biobetter for Pegintron

Phase II

Epodure(erythropoietin,Medgenics)

Explanted biopump, expressing and producingerythropoietinPossible biobetter for Epogen

Phase I/II

Biobetter Glycoproteins: Improved Manufacturing

Biotechnology companies are developing improved manufacturing methods forglycoproteins. For example, Merck & Co. is carrying out Phase II testing on adarbepoetin alfa candidate drug (MK-2578) manufactured in yeast cells.

However, glycoprotein biobetters will have to demonstrate a clinical advantage overcompetitors in addition to a superior manufacturing method. Shire’s epoetin deltaproduct, Dynepo, manufactured in human rather than animal cells, was withdrawn fromthe market in 2008 because it did not offer sufficient clinical benefits over competitorproducts.

Erythropoietin Drugs

Three recombinant erythropoietin products dominate the global market: Amgen andJohnson & Johnson’s Epogen/Procrit/Eprex (epoetin alfa); Roche’s NeoRecormon/Epogin(epoetin beta) and Amgen’s glycoengineered biobetter, Aranesp (darbepoetin alfa).Longer-acting Aranesp offers the advantage of requiring less frequent dosing. Patentsprotecting first-generation epoetin products have expired, except those protectingEpogen in the US that run until 2013. Aranesp is still protected by multiple patents.Roche has launched a pegylated biobetter, Mircera (methoxy polyethylene glycol-epoetinbeta), although it has suffered from the lack of a US launch as a result of patentinfringement litigation. All these erythropoietin drugs treat anaemia following renalfailure or chemotherapy.


December 2009 23


The EMEA has approved multiple biosimilar epoetin products in Europe and these haveachieved significant market share in Germany. The erythropoietin market is now verycompetitive. Shire’s decision to cease commercialisation of Dynepo illustrates this highlevel of competitiveness.

Longer-acting epoetin biobetters currently in development are likely to struggle incompetition with Aranesp, Mircera and epoetin biosimilars. These biobetters includeMerck & Co.’s version of darbepoetin alfa manufactured in yeast cells currently in PhaseII testing, and Medgenics’ erythropoietin-producing gene therapy implant in Phase I/IItesting. Additionally, all erythropoietins face possible future competition from biologicaland small-molecule drugs that are designed to control erythropoiesis by mechanismsother than replacing natural erythropoietin. They include AffyMax’s Hematide, currentlyin Phase III clinical testing and FibroGen’s FG-4592, in Phase II testing.

Granulocyte Colony-Stimulating Factor (G-CSF)

The two leading recombinant G-CSF drugs on the market are Amgen’s Neupogen(filgrastim) and Roche’s Neutrogin (lenograstim), used to treat neutropenia (low levels ofwhite blood cells) in oncology applications. Key patents on Neupogen have expired inEurope but remain active in the US until 2013.

A biobetter pegylated version of Neupogen – Amgen’s longer-acting Neulasta(pegfilgrastim) – now has annual sales exceeding those of Neupogen. Neulasta’s keypatents are expected to lapse in 2015.

G-CSF is an attractive biosimilar target for manufacturers, and in Europe the EMEA hasapproved a number of biosimilar filgrastim products. However, the key threat will likelycome from biosimilar pegfilgrastim. In the G-CSF sector, the main biobetter strategy willtherefore be to develop G-CSF products that are longer acting than Neulasta. Companiesdeveloping biobetter pegfilgrastim include Maxygen, Merck & Co. and BolderBioTechnology. Hanmi is attempting to extend the half-life of filgrastim by conjugating itwith a carrier protein.

Interferons

Two types of interferon provide the largest revenues for manufacturers: α-interferonproducts are used primarily for hepatitis C and B treatment, and β-interferon betaproducts treat patients with multiple sclerosis.

Sales of the pegylated α-interferon products – Roche’s Pegasys (peginterferon alfa-2aand Merck & Co.’s (formerly Schering-Plough’s) Pegintron (peginterferon alfa-2b) – havenow eclipsed sales of first-generation α-interferon products, including Roche’s Roferon-A(interferon alfa-2a) and Merck & Co.’s (formerly Schering-Plough’s) Intron A (interferonalfa-2b). Key US and European patents on these products have expired.


24 December 2009


Biobetter developers are now concentrating on developing longer-acting α-interferonproducts, including Novartis’ and Human Genome’s albumin fusion protein, Biolex’scontrolled-release formulation, Flamel’s interferon-carrier protein drug conjugate andprotein-engineered and improved pegylated interferon products. Oral formulations ofα-interferon and β-interferon are also in development.

Three β-interferon products – Biogen Idec’s Avonex (interferon beta-1a), Merck KGaA’sRebif (interferon beta-1a) and Bayer’s Betaferon/Betaseron (interferon-beta-1b) –account for the majority of the global market. Again, key patents on these products haveexpired.

A longer-acting pegylated β-interferon is likely to be the next major development in thisdrug group: Biogen Idec has a pegylated interferon beta-1a drug candidate in Phase IIIclinical testing. Other pegylated interferons and protein-engineered β-interferoncandidates are in preclinical development. There is a market opportunity for thedevelopment of more convenient oral, dermatological or inhaled formulations ofβ-interferon for patients with multiple sclerosis.

Vaccines

The Vaccine Market

Most vaccines have been in use for many years and the market is open to low-costcompetition. Additionally, future biosimilar competition could emerge for newer, high-revenue vaccines such as Merck & Co.’s Gardasil (human papillomavirus vaccine), for theprevention of cervical cancer. Despite the challenge and expense involved in developing,manufacturing and testing vaccines, this sector of the pharmaceutical market is one ofthe most rapidly growing, as vaccine programmes expand worldwide. Developingbiobetter vaccines is a key strategy to access this growing market.

Biobetter Vaccines: New Delivery Methods

More convenient formulations are a strategy for adding value to existing injectedvaccines, especially influenza. AstraZeneca has gained regulatory approval for anintranasal influenza vaccine in the US, and vaccines delivered via the skin, either from apatch or through microneedles, are also under development (Table 8). These noveldelivery methods will allow vaccines to be administered with less training, and will beattractive to healthcare providers for programmes among the elderly, children and indeveloping countries.


December 2009 25


Table 8: Biobetter Vaccines - New Delivery MethodsBiobetter Description Current Development

PhaseFlumist(AstraZeneca)

Live attenuated intranasal influenza vaccine Approved (FDA)

Intanza/IDflu(Sanofi-Aventis)

Intradermal microinjection vaccine forseasonal influenza

Approved (EMEA, 2009)

Influenza vaccineenhancement patch(Intercell)

Transdermal vaccine patch with noveladjuvant (IC31) for pandemic H5N1influenza

Phase II

CholeraGarde(Celldex)

Oral cholera vaccine Phase II

Ty800 vaccine(Celldex/VaccineTechnologies[China])

Oral typhoid fever vaccine Phase II

Typhoid vaccine(EmergentBioSolutions)

Single-dose, oral typhoid fever vaccine Phase II

Biobetter Vaccines: New Technologies

A number of technological improvements can be employed to develop biobetter versionsof existing vaccines. These include switching from live, attenuated or inactivatedvaccines to recombinant products (Table 9). Particularly for influenza vaccines, theaddition of adjuvants (Table 10) can improve the immune response they elicit. Again forinfluenza vaccines, the introduction of newer cell culture manufacturing methods toreplace egg-based systems will simplify production and allow a faster response toemerging influenza strains (Table 11).

Table 9: Biobetter Vaccines - New Recombinant TechnologiesBiobetter Description Current Development

PhaseIxiaro(Novartis/Intercell)

Two-dose inactivated Japaneseencephalitis vaccineBiobetter for older multi-dose Japaneseencephalitis vaccines


Imojev (Sanofi-Aventis)

Single-dose recombinant Japaneseencephalitis vaccine

Submitted (Australia andThailand)

Varicella-zoster vaccine(GlaxoSmithKline)

Recombinant vaccine for shinglespreventionBiobetter for Zostavax (zoster vaccine,live, Merck & Co.)

Phase II

Table 10: Biobetter Vaccines - New AdjuvantsBiobetter Description Current Development

Phase


26 December 2009


Fluad (Novartis) Vaccine with novel adjuvant (M59) forseasonal influenza

Approved (certain Europeanmarkets)

Grippol Neo(Solvay/Petrovax)

Seasonal influenza vaccine withPolyoxidonium adjuvant

Approved (Russia, 2009)

Next-generation fluvaccine(GlaxoSmithKline)

Influenza vaccine with AS03 adjuvant forseasonal influenza in the elderly

Phase III

Table 11: Biobetter Vaccines - New Manufacturing TechnologyBiobetter Description Current Development

PhaseOptaflu (Novartis) Seasonal influenza vaccine manufactured

by cell culture technologyApproved (EMEA, 2007)

PerC.6 influenzavaccine (Sanofi-Aventis)

Seasonal influenza vaccine manufacturedby cell culture technology (PerC.6)

Phase III

Influvac TC (Solvay) Cell culture influenza vaccine Phase III (EU); Phase I (US)

Biobetter Vaccines: More Strains

The final strategy for designing biobetter versions of existing vaccines is increasing thenumber serotypes of a micro-organism against which a vaccine protects. This process isalready in progress for two vaccines with high global revenues: Pfizer’s (formerlyWyeth’s) Prevnar (seven-valent pneumococcal vaccine) and Merck & Co.’s Gardasil(Table 12). Currently, Prevnar protects against seven serotypes of Streptococcuspneumoniae, whilst biobetter versions contain 10 or 13 strains. Merck & Co. isdeveloping a biobetter vaccine protecting against nine strains of the humanpapillomavirus, compared with Gardasil’s four serotypes.

Table 12: Biobetter Vaccines - Broader Spectrum of ActivityBiobetter Description Current Development

PhaseSynflorix(GlaxoSmithKline)

Conjugate vaccine for the prevention ofStreptococcus pneumoniae (10 strains) andHaemophilus influenzae infectionsPotential biobetter for Prevnar (seven-valentpneumococcal vaccine, Pfizer [formerlyWyeth])


Prevnar 13 (Pfizer[formerly Wyeth])

Thirteen-valent vaccine for prevention ofStreptococcus pneumoniae infectionsBiobetter for Prevnar

Submitted (EMEA, 2008;FDA, 2009)

HPV Vaccine (Merck& Co.)

Nine-valent HPV vaccineBiobetter for Gardasil (four-valent HPV vaccine,Merck & Co.)

Phase III

Four-valent seasonalinfluenza vaccine(AstraZeneca)

Four-valent seasonal influenza vaccine Phase II

HPV = human papillomavirus


December 2009 27


Protein Hormones

The Insulin Market

Insulin is the most commercially important of the simple nonglycosylated hormones. Themarket is dominated by recombinant human insulin and insulin analogues marketed byEli Lilly, Novo Nordisk and Sanofi-Aventis. Patents protecting the leading human insulinproducts have expired in North America and Europe. The leading insulin analogues,which have an altered amino-acid sequence in order to modify their speed of absorptionand utilization by the body, have patents set to expire during 2010-2014. The EMEA hasnot yet approved any biosimilar insulin products. However, biosimilar insulin is availablein certain Asian and Eastern European markets and is likely to reach Western Europeanmarkets in the near future.

Novel Formulations are the Key Biobetter Opportunity

Subcutaneous injection using a variety of syringes and pens is by far the most commoninsulin delivery method employed by patients with diabetes. The trend for replacinghuman insulin with novel insulin analogues for use in these subcutaneous injections islikely to continue. Other formulations are available, including continuous subcutaneousadministration through an insulin pump, and a dermatological formulation in which a jetof high-pressure air sends an insulin mist through the skin. The main commercialopportunity for biobetter insulins in the future is for additional noninvasive formulationsthat may be more convenient to patients and thereby increase compliance. Biosimilarinsulin may not gain in commercial importance if markedly more convenient biobettersare developed.

New Insulin Delivery Methods

New, non-invasive insulin delivery methods currently in clinical trials are shown inTable 13. In developed markets these novel formulations will provide the mainopportunity for developing biobetter insulin products to compete with biosimilarproducts.

For a biobetter insulin to be successful it will have to be significantly easier to use thanexisting injection devices, hence promoting better patient compliance and ideally bemore effective. In 2006, Pfizer and Sanofi-Aventis launched an inhaled insulin, Exubera.However, it was withdrawn from the market in 2007, owing to disappointing sales. Thedrug was not more effective than injections, was only marginally more convenient – inthat it reduced the number of injections required rather than eliminating them – andsuffered from safety fears over the risk of lung cancer in prolonged use.


28 December 2009


Dermatological Insulin

Of the novel insulin formulations in development, including oral, dermatological andsuppository, dermatological formulations are perhaps the most promising. These rely onthe active delivery of insulin through the dermal layer aided by ultrasound, electricalcharges or air jets. Patients are already familiar with insulin delivery through the skinand transdermal technologies can include systems for the continuous monitoring of bloodsugar concentration, in the manner of existing insulin pumps.

Oral Insulin

Oral insulin formulations involve the incorporation of components to protect the insulinfrom the harsh gastrointestinal environment, and promote absorption through theintestine. Insulin delivered by this method reaches the liver in higher concentration thanthat administered subcutaneously, and may mitigate diabetes symptoms through hepaticglucose regulation. Oral formulations are challenging to develop and an alternativeapproach is Generex’s Oral-Lyn (in Phase III of development) in which the insulin in theform of a spray is absorbed by the mouth lining.

Inhaled Insulin

The commercial failure of Pfizer’s Exubera has discouraged the development of inhaledinsulin and indeed this delivery method suffers from a relative lack of control overdosage, safety fears and the use of large amounts of insulin. In 2008, Novo Nordiskdecided to stop all further development of inhaled insulin. Nevertheless, MannKind hassubmitted its Afresa inhaled insulin to the FDA and expects a regulatory decision in2010.


December 2009 29


Table 13: Biobetter Insulin DevicesBiobetter Description Current Regulatory StatusAfresa (MannKind) Inhaled, ultrafast-acting insulin Submitted (FDA, May 2009)Oral-Lyn (Generex) Insulin formulated as oral spray,

absorbed via mouth liningPhase III (US)

IN-105 (Biocon) Oral insulin analogue Phase III (India); Phase I(Europe)

TPM Insulin(Phosphagenics)

Transdermal insulin Phase II (Australia)

ORMD 0801(Oramed)

Oral insulin capsule Phase II

Oral insulin(Emisphere)

Oral insulin Phase II

Nasulin (CPEX) Inhaled insulin Phase II

Biobetter Growth Hormones and other Hormones

Novo Nordisk is developing a pegylated growth hormone with a longer half-life, which iscurrently in Phase II clinical development. Emisphere is developing an oral growthhormone (currently in Phase I testing).

Other biobetter hormone targets include calcitonin, indicated for osteoporosis. Novartis,in collaboration with Nordic Bioscience and Emisphere is developing a biobetter oralformulation (SMC021) of their injected salmon calcitonin Miacalcin/Miacalcic. SMC021 iscurrently in Phase III testing.

Other Biological Drugs

Other types of biobetter drug in development are shown in Table 14.

Table 14: Other Biobetter ExamplesBiobetter Description Current Regulatory StatusRecombinant factor XIII(Novo Nordisk)

Recombinant version of existinghuman-derived factor XIII

Phase III

NN1731 (Novo Nordisk) Fast-acting analogue of recombinantfactor VIIa

Phase II

NN7128 (Novo Nordisk) Long-acting glycopegylated analogueof recombinant factor VIIa

Phase II

Kogenate (Bayer) Pegylated recombinant factor VIII Phase IIOral heparin (Emisphere) Oral heparin formulation Phase IILong-acting factor IX(Biogen Idec/Biovitrum)

Long-acting recombinant factor IXfusion protein

Phase I/II


30 December 2009


Leading Biobetter Companies

Who are the Biobetter Leaders?

Large pharmaceutical companies market most of the biological therapies currentlyavailable to patients. Amgen, the world’s largest biotechnology company, has grown tobe a top-20 pharmaceutical company since its inception in 1980 and markets fiveseparate blockbuster biological drugs. Nevertheless, this is an exception and the trend oflarge pharmaceutical companies acquiring or licensing late-stage biological therapies,including biobetters, is likely to be consolidated by the current difficult financial climate.

Which large pharmaceutical companies are leading the field in the development ofbiobetters? The leading pharmaceutical companies involved in the development andmarketing of biological medicines can be divided into three groups. Firstly there are the‘biobetter strategists’. This group consists of Novo Nordisk and Merck & Co., both ofwhich have a specific strategy of developing biobetters. Novo Nordisk already has anextensive biological drug portfolio, and sees biobetters as a key plank in its strategy ofdefence against biosimilars. Merck & Co., by contrast, is a late entrant to the biologicaldrug market, and sees biobetters as a method for gaining future biological market share.

The second group, the ‘bioleaders’, are already leading biological drug companies. Thesecompanies are Roche, Biogen Idec, Amgen, Sanofi-Aventis and Eli Lilly and arecharacterised by development strategies focussed on new biological therapies, withbiobetters taking lower priority. These companies have biological drugs exposed tofuture biosimilar competition.

Members of the third and final group – Novartis, GSK, AstraZeneca and Pfizer – havelittle or no strategic biobetter development. Novartis is concentrating on thedevelopment of novel biological therapeutics and biosimilars. Other companies in thegroup mostly rely on small-molecule drugs but are pursuing biological expansion throughthe development of novel biologicals.

The Biobetter Strategists

Novo Nordisk

Novo Nordisk has the leading biobetter strategy amongst major pharmaceuticalcompanies. The company obtains the majority of its sales revenues from biologicaldrugs, mainly insulin, blood factors and human growth hormone. Leading blockbusterbrands include the insulin analogue Novorapid/Novolog (insulin aspart), human insulin(marketed under brand names including Actrapid and Insulatard), Norditropin humangrowth hormone (somatropin) and Novoseven (recombinant factor VII). Novo Nordisk is


December 2009 31


viewing the threat of biosimilar competition to these products very seriously and hasresponded by focussing a key part of its development pipeline activities on biobetters.

Aware of the spread of biosimilar insulin in Asia and Eastern Europe, Novo Nordisk isdeveloping new premixes of its existing insulin analogues, with the aim of increasingglycaemic control and patient convenience. Also, the company is developing the newinsulin analogue, Siba (soluble insulin basal analogue: NN1250), a long-acting next-generation insulin with a potential duration of action of more than 24 hours. Phase IIItesting began at the end of 2009.

Novo Nordisk has a biobetter recombinant factor XIII product in Phase III clinical testing.It improves on existing factor XIII products, which contain human-derived material, andhence have a higher theoretical risk of transmitting infectious agents. A long-actingglycopegylated derivative of factor VIIa and a fast-acting analogue of factor VIIa areboth in Phase II clinical testing. Both are potential biobetters for Novo Nordisk’sNovoseven. Another glycopegylated recombinant factor VIIa candidate is in Phase Itesting as a subcutaneous injection, instead of the standard intravenous injection. Otherprojects involving biobetter blood factors include a long-acting factor IX and an improvedfactor VIII product with no added animal or human proteins.

Finally, Novo Nordisk is developing a longer-acting version of its recombinant growthhormone. The company hopes its pegylated candidate drug will improve patientconvenience by reducing the number of injections needed.

Merck & Co.

In the past year, Merck & Co. has moved rapidly to enter the biobetter field. InDecember 2008, the company set up a dedicated biologicals unit, Merck BioVentures(MBV), to develop biological therapies and what Merck terms ‘follow-on biologics’. MBVhas access to proprietary glycoengineering technology, gained during Merck’s $400million acquisition of GlycoFi in 2006. The technology allows yeast-based production oftherapeutic proteins with a higher degree of uniformity of glycosylation than traditionalmammalian cell culture manufacturing methods. According to Merck & Co.,glycoengineered drugs have the potential for increased specificity, bioavailability andresidence time in the body than those produced in mammalian cells.

In February 2009, MBV acquired a portfolio of biological drugs and biologicalmanufacturing facilities from Insmed, giving it a pipeline of follow-on biologicals thatincludes darbepoetin alfa (MK-2578, in Phase II testing) and both filgrastim andpegfilgrastim (MK-4214 and MK-6302, both in Phase I testing). Merck is likely to attemptto develop and market these pipeline products, and potentially further biologicals, asglycoengineered biobetters, with claimed therapeutic advantages over existing biologicaldrugs. Of course, if an appropriate regulatory pathway is established in the US, Merckmay retain the option of marketing biosimilars.


32 December 2009


In addition to its MBV programme, Merck is developing a biobetter version of its vaccine,Gardasil (human papillomavirus vaccine). As a result of the company’s merger withSchering-Plough in November 2009, Merck gained control of the pegylated biobetter,Pegintron (peginterferon alfa-2b). Prior to this merger Schering-Plough and Johnson &Johnson shared rights to both of the monoclonal antibodies, Remicade (infliximab) andits recently-launched biobetter, Simponi (golimumab). Arbitration is in progress todetermine whether Johnson & Johnson or Merck & Co. gain control after merger.

The Bioleaders

Roche Group

The Roche Group, comprising Roche, Genentech and Chugai, derives over 50 percent ofits pharmaceutical sales revenues from biological drugs, more than most other largepharmaceutical companies. The group has a history of developing second-generationbiobetters of existing biological drugs. Genentech developed Lucentis (ranibizumab), afragment of the Avastin (bevacizumab) monoclonal antibody and currently marketed forage-related macular degeneration. Roche has developed Pegasys, a pegylated interferonalfa-2a for hepatitis treatment and Mircera, a pegylated epoetin beta product.

Roche and Genentech developed the majority of their biological drugs in-house, althoughRoche has extended its capabilities by acquisitions such as that of GlycArt in 2005.GlycArt’s antibody glycosylation technology has the potential to improve the cell-killingcapabilities and efficacy of existing antibodies. Roche has also begun clinical trials inpartnership with Halozyme, investigating subcutaneous formulations of biologicalscurrently administered by intravenous injection.

The Roche Group has a development pipeline richer in both biobetters and novelbiological therapies than many of its competitors. A key strategy is the development ofbiobetter versions of many of its highest-selling monoclonal antibodies. The company isdeveloping two different humanised versions of the chimaeric monoclonal antibody,Mabthera/Rituxan (rituximab): R7159 for non-Hodgkin’s lymphoma and ocrelizumab(R1594) for rheumatoid arthritis and multiple sclerosis. Roche is also developing twobiobetters for the treatment of HER2-positive breast cancer. Trastuzumab-DM1 is anantibody-drug conjugate, consisting of Herceptin (trastuzumab) conjugated withImmunoGen’s cytotoxic agent DM1. Pertuzumab is a humanised monoclonal antibodythat inhibits the pairing of HER2 with other HER receptors, a key mechanism of tumourgrowth. It is being investigated as a combination therapy with Herceptin. Roche’spipeline also includes a fully human EGFR monoclonal antibody in early-stagedevelopment.


December 2009 33


Biogen Idec

Biogen Idec derives its revenues from the novel monoclonal antibody therapeuticsMabthera/Rituxan, Avonex (interferon beta-1a) and the multiple sclerosis treatment,Tysabri (natalizumab). The company’s development pipeline contains a number of novelbiological therapies and biobetter drug candidates.

Biogen Idec’s biobetters in development include a pegylated version of interferon beta-1a for multiple sclerosis, currently in Phase III of clinical testing, and ocrelizumab, abiobetter anti-CD20 monoclonal antibody under development in partnership with theRoche Group.

Additionally, the company is developing longer-acting versions of two blood factors inpartnership with Biovitrum. Long-acting factor IX for haemophilia B is in Phase II ofdevelopment, whilst long-acting factor VIII is in preclinical testing for haemophilia Atreatment. These longer-acting factors use a technology platform involving fusion withthe Fc region of antibodies to produce recombinant fusion proteins. Biogen Idec obtainedthis platform as a result of its 2007 acquisition of Syntonix.

Amgen

Amgen is the world’s largest biotechnology company and markets a number ofblockbuster biological drugs: the fusion protein, Enbrel (etanercept), Epogen (epoetinalfa), and Neupogen (filgrastim). Amgen markets two further blockbuster biobetters,Aranesp (darbepoetin alfa), a glycoengineered second-generation product to Epogen,and Neulasta (pegfilgrastim), a pegylated follow-on product for Neupogen.

Since Amgen has already developed second-generation products for two of its majorfirst-generation products, it is a biobetter pioneer and has significantly strengthened itsposition against future biosimilar competition. As a result, Amgen’s current research anddevelopment pipeline is centred exclusively on novel therapeutics, from which thecompany plans to achieve future growth. Nevertheless, Amgen’s expertise in biologicaldrug development, biological manufacturing, and process development should give thecompany a competitive edge in developing biobetters of marketed drugs in the longerterm.

Sanofi-Aventis

Sanofi-Aventis obtained roughly 30 percent of drug revenues in 2008 from biologicaldrugs. These included the low-molecular weight heparin Lovenox (enoxaparin), Lantus(insulin glargine) and a wide range of vaccines. The company has a strategy ofincreasing its development of biological drugs through acquisitions, alliances and licenceagreements, for example, acquiring the vaccine developer, Acambis, in 2008.


34 December 2009


The company has a rich pipeline of vaccines, including second-generation and improvedversions of existing vaccines. Sanofi’s recently approved influenza vaccine uses anintradermal delivery mechanism. Late-stage improved vaccine projects include a next-generation influenza vaccine using cell culture manufacturing and an improved Japaneseencephalitis vaccine requiring fewer doses. Improved vaccines in an earlier stage ofdevelopment include a recombinant pneumococcal vaccine, a shingles vaccine and animproved second-generation version of Sanofi’s Menactra, a vaccine indicated for theprevention of meningococcal disease.

Eli Lilly

Eli Lilly has a relatively long history of biological drug development and marketsblockbuster biological drugs including the growth hormone Humatrope (somatropin) andthe insulin products Humulin (human insulin) and Humalog (insulin lispro).

Eli Lilly boosted its biological drug products and biological development pipeline by theNovember 2008 acquisition of ImClone, a therapeutic antibody company. As a result, EliLilly has a pipeline of both innovative and biobetter biological drugs, including thebiobetter candidate ramucirumab (IMC-1121B), a fully human monoclonal antibodytargeting VEGFR-2. It is currently in Phase III testing in patients with metastatic breastcancer, but could potentially compete effectively with Roche’s Avastin for the treatmentof a wide range of solid tumours. Other biobetter drug candidates include a fully humanantibody targeting EGFR (IMC-11F8) and a biobetter CD20 antibody for non-Hodgkin’slymphoma. Both of these are in Phase II clinical testing.

Other Large Pharmaceutical Companies

GlaxoSmithKline

GlaxoSmithKline (GSK) reported that it derived only six percent of its 2008 drugsrevenues from biological drugs, the vast majority from vaccines, but hopes to increasethis through in-house discovery, acquisitions and in-licensing late-stage products. In2008, GSK created a biologicals research and development unit, Biopharm.

The company’s vaccine development pipeline includes biobetter versions of Pfizer’spneumococcal vaccine Prevnar, Merck & Co.’s shingles vaccine Zostavax, and improvedinfluenza vaccines with novel adjuvants. GSK’s pipeline also includes novel vaccines fordiseases with no available vaccine.

GSK is aiming to expand its portfolio of biological therapies to antibody-based drugs,including both antibody fragments and full-sized monoclonal antibodies. In 2007, GSKacquired Domantis, a biotechnology company that had developed antibody fragments(Domain Antibodies) with potential applications in delivery formulations other than


December 2009 35


traditional injected formulations. However, GSK’s immediate biobetter hopes are pinnedon Arzerra (ofatumumab), approved by the FDA in October 2009. As a full-sized, fullyhuman monoclonal antibody, Arzerra may provide strong competition for Roche’schimaeric monoclonal antibody Mabthera/Rituxan.

Novartis

Currently, Novartis markets biological drugs in the form of vaccines and the monoclonalantibodies Xolair (omalizumab) and Lucentis (ranibizumab). Novartis’s future biologicalstrategy is focussed primarily on developing innovative biological drugs and biosimilars,rather than biobetters. In 2007, the company created a biologicals unit, designed toimprove biotechnology innovation and drive future growth of novel biological therapies.

Novartis develops and markets biosimilars through its generics division, Sandoz, which isthe leading biosimilar developer and marketer in developed world markets. The genericsmanufacturer has gained EMEA approval for three biosimilars: the growth hormone,Omnitrope, a biosimilar epoetin alfa and Zarzio, a biosimilar filgrastim.

Despite having faith in the future commercial viability of biosimilars, Novartis isdeveloping a few biobetters. These include an albumin-interferon alfa-2b fusion proteinfor hepatitis C (Albuferon, ABF656) and an oral formulation of the hormone calcitonin forosteoporosis (SMC021). In its vaccines division, Novartis has developed an improvedJapanese encephalitis vaccine in partnership with Intercell and improved influenzavaccines utilising novel adjuvants and cell culture manufacturing methods.

AstraZeneca

AstraZeneca has gained biological drugs and biological development capabilities throughthe acquisition of biotechnology companies, including Cambridge Antibody Technology in2006 and MedImmune in 2007. As a result, AstraZeneca gained the nasal influenzavaccine Flumist and the monoclonal antibody Synagis (palivizumab), for the preventionof respiratory syncytial virus infection.

AstraZeneca is pursuing biobetter versions of influenza vaccines, including a four-valentseasonal influenza vaccine, and is developing Numax (motavizumab), a reportedly morepotent biobetter version of Synagis. This biobetter monoclonal antibody is designed toachieve greater efficacy through greater affinity for its target. In addition to thisbiobetter campaign, AstraZeneca is developing multiple novel monoclonal antibodies fordiseases including asthma and rheumatoid arthritis.


36 December 2009


Pfizer

Until 2009, Pfizer had relied almost exclusively on business from small-molecule drugs.Now, however, the company sees the development of biological drugs as its mostimportant future tactic. A strategy of developing both innovative and biobetter biologicaldrugs is being implemented by the acquisition of other companies, including mostnotably the $68 billion acquisition of Wyeth, completed in October 2009.

By acquiring Wyeth, Pfizer has gained not only the blockbusters Enbrel (etanercept) andPrevnar (seven-valent pneumococcal vaccine), but also important biologicalmanufacturing knowledge and facilities and a useful biological drug pipeline. Thispipeline includes biobetters such as Prevnar 13, a vaccine for the prevention ofpneumococcal disease in children caused by 13 strains of Streptococcus pneumoniae.Wyeth heralded Prevnar 13 as a significant advance, since the biobetter vaccine protectsagainst six extra pneumococcal strains, compared with the seven strains for Prevnar.


December 2009 37


ConclusionBiosimilars already are a reality in Europe and much of Asia, and have now arrived inJapan and Canada. It is difficult to believe that the US will not adopt them within thenext four years. Although the degree to which biosimilars will become accepted andenjoy commercial success is as yet unknown, there is a distinct possibility for a rapidgrowth in the biosimilar market in the coming years.

In many cases, the manufacturers of branded biologicals threatened by biosimilars havethe opportunity of defence against this biosimilar threat by developing second-generation, biobetter versions of existing biological drugs. With sufficient clinicalsuperiority or improvement in convenience of use, biobetters could compete successfullywith biosimilars and prevent them from gaining market share.

First-generation biological drugs are largely immediate-release formulations of proteins,delivered by subcutaneous injection or infusion. Biobetter, versions of these drugsinvolve either improving their manufacturing process, for example by switching tomicrobial, insect or plant-based cell systems, or engineering the protein structure of thedrug.

Engineering can entail the alteration of the amino acid sequences or the glycocomponentof a glycosylated protein, or the attachment of other components such as PEG, albuminor proteins. The resulting biobetter may gain a competitive advantage through anincrease in the half-life in the body, which may lead to reduced dosing frequency,improved bioavailability and reduced toxicity. Alternatively, protein engineering mayallow creation of a biobetter with altered function and therefore improved clinicaleffectiveness or reduced side effects. Finally, biobetter development may allow creationof an oral, dermatoglocial or inhaled formulation having more convenient dosage formatsand potentially improved patient compliance.

Novo Nordisk and Merck & Co. have already adopted a biobetter strategy for their futuredevelopment. Novo Nordisk, with a drug portfolio vulnerable to biosimilar competition,sees biobetters as a key plank in its strategy for maintaining market share against low-cost competitors. Merck & Co, a late entrant to the biological drug market, seesbiobetters as a method for gaining future biological market share. Interest in biobetterdevelopment, either through in-house development, partnerships or acquisitions, is likelyto increase amongst other large pharmaceutical companies in the coming years.

For many companies, development of biobetters will provide an essential complementaryactivity to the development of novel biological therapeutics. The aim of biobetterdevelopment will be to develop a product with a distinct clinical advantage or moreconvenient formulation for patients. Only these clearly differentiated biobetters will


38 December 2009


provide strong competition for future biosimilars, gain satisfactory reimbursement frompayers and achieve commercial success.


December 2009 39


AbbreviationsEGFR - Epidermal growth factor receptor

EMEA - European Medicines Agency

FDA – Food and Drug Administration (US)

G-CSF - Granulocyte colony-stimulating factor

GSK - GlaxoSmithKline

HPV - Human papillomavirus

MBV - Merck BioVentures

NICE - National Institute for Health and Clinical Excellence (UK)

PEG - Polyethylene glycol

RSV F - Respiratory syncytial virus F protein

SIBA - Soluble insulin basal analogue

TNF - Tumour necrosis factor

VEGF - Vascular endothelial growth factor

VEGFR - Vascular endothelial growth factor receptor


40 December 2009


Index

A

Abbott 18Acambis 35Actrapid 32adalimumab 18Albuferon 36Amarillo Biosciences 16Amgen 2, 22, 23, 24, 31, 34anti-TNF 11Aranesp 23, 24, 34Arzerra 18, 36Asia 3, 32, 38AstraZeneca 18, 25, 26, 28, 31, 37Avastin 17, 18, 19, 21, 33, 35Aventis Pasteur MSD 15Avonex 22, 25, 34

B

Bayer 25, 30Biogen Idec 11, 17, 18, 22, 25, 30, 31, 34Biopharm 36Biotherapeutics 15Biovitrum 30, 34Bristol-Myers Squibb 19

C

Cambridge Antibody Technology 37Canada 4, 38CD20 antibody 19, 35chimaeric monoclonal antibodies 18China 26Chugai 33

D

darbepoetin alfa 23, 24, 32, 34DMARDs 15Domantis 36

E

Elan 11Eli Lilly 19, 28, 31, 35EMEA 3, 4, 8, 10, 13, 18, 24, 26, 27, 28, 36, 40Emisphere 30Enbrel 2, 34, 37enoxaparin 35epoetin 2, 10, 21, 22, 23, 24, 33, 34, 36Epogen 23, 34Erbitux 19erythropoietin 2, 3, 4, 10, 11, 21, 22, 23, 24etanercept 2, 34, 37Europe 3, 4, 5, 10, 13, 24, 28, 30, 32, 38

F

FDA 4, 8, 10, 13, 18, 26, 27, 29, 30, 36, 40filgrastim 2, 22, 24, 32, 34, 36Flumist 26, 37

G

Gardasil 25, 27, 33G-CSF 2, 4, 21, 22, 24, 40Genentech 15, 21, 33Genmab 18, 19glargine 35GlaxoSmithKline 7, 18, 26, 27, 35, 40GlycArt 33GlycoFi 32golimumab 18, 33GSK 7, 31, 35, 36, 40

H

Halozyme 33Herceptin 7, 17, 18, 19, 20, 33Humalog 35Humatrope 35Humira 18, 21Humulin 35


December 2009 41


I

IMC-1121B 35ImClone 35ImmunoGen 20, 34India 17, 30Insmed 32Insulatard 32insulin 2, 3, 15, 16, 28, 29, 30, 31, 32, 35, 40insulin aspart 31insulin lispro 35interferon beta-1a 22, 25, 34interferons 2, 3, 15, 25

J

Japan 4, 5, 38Japanese encephalitis vaccine 26, 35, 36Johnson & Johnson 17, 18, 19, 23, 33

L

Lantus 35Lovenox 35Lucentis 12, 13, 21, 33, 36

M

Mabthera 17, 18, 19, 33, 34, 36MedImmune 37Menactra 35Merck & Co 17, 18, 19, 22, 23, 24, 25, 26, 27, 31, 32, 33, 36, 38Merck BioVentures 32, 40Merck KGaA 19, 22, 25Miacalcin/Miacalcic 30Mircera 22, 23, 24, 33MK-2578 23, 32MK-4214 33MK-6302 33motavizumab 37Motavizumab 18

N

natalizumab 11, 34Necitumumab 19Neulasta 22, 24, 34Neupogen 22, 24, 34New Zealand 12

NICE 12, 40NN1731 30non-Hodgkin’s lymphoma 17, 18, 33, 35Nordic Bioscience 30Novartis 12, 13, 21, 23, 25, 26, 27, 30, 31, 36Novo Nordisk 28, 29, 30, 31, 32, 38Novolog 31Novorapid 31Novoseven 32Numax 37

O

ocrelizumab 33, 34Ocrelizumab 18ofatumumab 18, 36omalizumab 36Omnitrope 36Oramed 15, 30

P

palivizumab 18, 37Pegasys 22, 23, 24, 33pegfilgrastim 22, 24, 33, 34Pertuzumab 19, 20, 34Pfizer 2, 27, 29, 31, 36, 37Prevnar 27, 36, 37

R

R1594 33ramucirumab 35Ramucirumab 19ranibizumab 12, 21, 33, 36Remicade 17, 18, 21, 33RG7159 18rheumatoid arthritis 2, 12, 15, 17, 18, 33, 37Rituxan 17, 18, 19, 33, 34, 36Roche 7, 12, 17, 18, 19, 20, 21, 22, 23, 24, 31, 33, 34, 35, 36

S

Sandoz 36Sanofi Pasteur MSD 15Sanofi-Aventis 26, 27, 28, 29, 31, 35Schering-Plough 17, 19, 22, 23, 24, 33Siba 32Simponi 18, 33


42 December 2009


SMC021 30, 36somatropin 2, 4, 32, 35Synagis 18, 37Syntonix 34

T

trastuzumab 7, 15, 17, 20, 34Tysabri 11, 34

U

US 2, 3, 4, 11, 12, 13, 17, 18, 23, 24, 25, 27, 30, 33, 38, 40

V

Veltuzumab 18

W

Wyeth 2, 27, 37

X

Xolair 36

Z

Zalutumumab 19Zarzio 36Zostavax 26, 36

bio betters major players and market prospects

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