Biosimilars or Bust

Walking the exhibit floor of an industry trade show, one becomes accustomed to seeing certain incongruities. Scattered in with bioreactors and filling lines, you can expect to see various circus performers, putting greens, and the occasional motorcycle being raffled off. But at the June 2011 Biotechnology Industry Organization (BIO) annual convention in Washington, DC, one such incongruity was not a gimmick. It was the Samsung booth, smack in the middle of the exhibit floor.

Michelle Hoffman

The electronics manufacturer has let its interest in the biopharmaceutical market be known for some time now. The company's $389-million investment in biosimilars was reported by Reuters in July 2009, who also quoted Samsung Spokesman James Chung as saying, "Biosimilars is one the businesses [sic] we aim to grow strategically. We are planning to participate (in the business) aggressively."

The initiative appears to dovetail with South Korea's plans to become a global leader in biosimilar research and development. Samsung, along with other South-Korean-based electronics firms, is contributing to a government initiative to develop the country's biosimilar industry.

It may not be as odd as it seems that an electronics company is interested in biosimilars. After all, establishing bioequivalence between innovator and follow-on biologics will require a great deal of analytics, which might make use of electronic sensors and components. The oddity is that Samsung intends to actually manufacture biosimilars.

Earlier this year, Samsung announced its partnership with Quintiles in a venture valued at $266 million, which, according to a February report by Bloomberg, is expected to start producing biosimilars by 2013, with most of these sales targeted at markets outside of the United States.

US companies are also getting into the market. Pfizer publicly described its interest in the sector at the BIO convention. Diem Nguyen, Pfizer's general manager for the Biosimilars Business Unit, outlined the company's intention to enter the market with some small, well-defined biologicals, including insulin, before moving into larger more complex drugs.

All of these entrants are spurred by optimistic projections of the market potential for these drugs. IMS Health released a report in July 2011 estimating that the biosimilar market will reach $2.5 billion globally by 2015. Other projections are even more enthusiastic. I thought I heard a McKinsey consultant project the biosimilar market to be $30 to $50 billion by 2020. Samsung, according to the Bloomberg report, is projecting its revenues from biosimilar products to possibly exceed $1.8 billion by 2020 based on its estimated demand for these medicines.

Yet, I find myself wondering: Why now? What's so compelling about this growth opportunity as opposed to, say, small-molecule generic drugs, branded monoclonal antibodies, gene therapies, or genomics-based drugs? At one time or another, each of these was deemed to be the next big thing in pharmaceuticals.

Given the anticipated difficulty in manufacturing biosimilars and the almost-certain regulatory requirement for some limited clinical data on the follow-on drugs, how much profit is there really to be made in them?

And finally, there is the disturbing variability in those market projections themselves. Is it really possible that the market will grow from $2.5 billion to $50 billion in just the five years between 2015 and 2020? Or are analysts using wildly different starting assumptions? And if they are, can we trust that anyone's model is robust?

I know we'll all be watching and reading with interest as the biosimilar story unfolds. And only time will tell whether biosimilars are the next big growth area, or just the latest high-tech bubble.

Michelle Hoffman is the editorial director of BioPharm International.