Genzyme and Some Biosimilar Foreshadowing
Biosimilars, Follow-on biologics, Biogenerics - whatever. As many biotech investors are aware, there is no path through the FDA whereas a generic drug based on a biological therapeutic can seek approval. This is one of the reasons that 'Biotechnology' companies [Traditional definition i.e. companies that make pharmaceuticals from proteins, mabs, and other biological materials] typically command higher multiples to traditional small chemical entity pharmaceutical firms. Patent expiration's don't mean the collapse of sales that is true in 'old pharma'.
Now many big $$ biologic based drugs are overdue for generic competition. Put Amgen's red blood cell generating erythropoieten (Epo) franchise at the head of that list. And many companies are poised to take advantage of biogenerics should an approval path become defined (my CAPS picks Barr and Novartis for example).
The FDA has said outlining such a path is a priority (we'll see). But for those expecting that the presence of such a path will open floodgates may be in for some disapointment as I'll describe in a bit. First lets outline the traditional small chemical entity generic path (oversimplify really). To qualify to sell such a generic isn't all that hard. A company has to show the active pharmaceutical ingredient is the same as the in the formerly patented drug - with the same purity standards as the original. They also have to show the drug 'acts' the same in the body i.e. ADME consistency (adsorption, distribution, metabolism, excretion). This takes work, but isn't all that high a hurdle.
But it is not straightforward, or even arguably possible in some cases, to prove that a biologic is 'identical'. And ADME is that much higher a hurdle. So it is likely that some efficacy testing will likely be required. This makes it a much larger financial commitment for a generic manufacturer and one that could end up failing.
To cut to the chase, lets look at some recent news from Genzyme that in my opinion foreshadows the difficulty in preparing biosimilars and high bar there will be for approving them. Genzyme has an approved product in myozyme for the treatment of "Pompe disease -- a severe, progressively debilitating and life-threatening inherited disorder." They make batches of Myozyme in Framingham, MA in a 160L bioreactor. Genzyme is looking to shift production ~15-20 miles down the road to Allston MA and a 2000L bioreactor. But not so fast says the FDA. The change in batch size slightly alters the product (carbohydrate post translational modification stuff) and it therefore needs to be classified as a different product and a new application filed (which means efficacy data IMO).
So if the same company using the same process (different scale to be fair) can't get a product classified as a biosimilar, what are the chances that a different company, without access to manufacturing trade secrets will have to get such an approval without having to obtain efficacy data. Not good IMO. Biosimilars are coming, but it is a slow boat that will be bringing them.