Stage set for bigger biotechnology play by local companies

Homegrown Cipla has joined the growing list of pharmaceutical companies that intend to manufacture and market biotechnology products.

As the patent terms of some of the best known first-wave biotech products such as enbrel, avastin, remicade and rituximab are nearing the end of their cycle, a global opportunity is being sensed by almost every company — cutting across innovators and generic big daddies.

Biotech products are proteins synthesised in living cells and include a wide range of therapies from preventive vaccines to insulins and anti-cancer products. Within the wide spectrum of biotech drugs, there is a very fast growing category called monoclonal antibodies.

Monoclonal antibodies are made up of immune cells of a single type, which can bind to target cells that trigger responses, to attack and to some extent control cancerous cells. This major molecular biology weapon is now being increasingly used to constrict the growth of malignant tumors and is vigorously followed up by more and more researchers and pharmaceutical companies.

Cipla, though relatively late compared with the likes of Teva, Sandoz, Mylan and Dr Reddy’s, can still be a serious contender in bringing about big changes in the pricing of biotech products.

Biosimilars, as these products are called once out of patents, will be an interesting segment to watch by their ability to become more affordable to cancer patients.

Avastin, a very popular breast cancer and colon cancer drug, for example, could cost over $100,000 for a 12-month supply and so it will be very important to see to what level its pricing could plummet once generic players have their products in the market.

Though there is no known generic of the product, as it is protected by patents, the technology to clone the biotech-based products itself is a mammoth challenge confronting scientists. Exactly how an established cell line can be replicated is a question that baffles many.

Being a very cautious player in terms of cost, Cipla will most likely keep a tight lid over its manufacturing processes. Therefore, it is deploying $65 million in its first phase of investments —- one in a local Goa company and the other in a facility in Shanghai, China.
Many may know that the Chinese biotech industry is well developed as a large mass of scientists worked in large multinational companies in the West and shifted back to their homeland to start their entrepreneurial ventures.

Media reports suggest Cipla’s products will be formulated in Goa, while the raw materials will be obtained from China.

Biosimilars are slowly making their presence felt in some strictly regulated markets such as the European Union and Japan for more known segments like growth hormones. Large companies such as Sandoz and even some innovators are leading the charge for biosimilars in developed markets. But going by the barriers of building a biotech drugs pipeline, some experts feel that in a specific product, not more than 3-4 companies can compete on the basis of costs.

More than a hurdle, that could be an opportunity for a company like Cipla.

Indian companies have demonstrated in the past that pricing of the most complex small molecules could be brought down to a fraction and the same may apply in biosimilars. Yet, having started much ahead of their Indian contemporaries, Mylan, Sandoz and Teva possibly know the game better.

The big advantage that Indian companies can have is the faster clinical development turnaround time. By having a ready network of clinical research investigators and steady patient flows, Indian companies can test their drugs faster and apply for registrations faster than their global counterparts. Dr Reddy’s has launched generic rituximab in the Indian market and that could be a test case for future launches and product improvements.

As the world wakes up to the potential of monoclonal antibodies, it is becoming increasingly clear that Indian companies are gearing up for a very serious presence in biotech drugs. If they are able to surmount the development and global launch hiccups, there is every reason to believe they can mirror the success achieved in generic drugs.

Pillman is an executive closely linked to the global pharma industry.