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Key Success Factors of Biosimilar & Bio-better
Key Success Factors of Biosimilar & Bio-better
HyukJong Lee(E-mail: [email protected])
2
BA, Business Administration, Seoul National Uni-
versity
MBA, Haas School, University of California, Berke-
ley,
- Team Head of Emerging Market Research, Dae-
woo Sec.
- Associate, Goldman Saches, FICC, Hong Kong
- Able Investment (CRC, Private Equity Fund), Co-
founder
- Executive Vice President, Genexine (KOSDAQ
Listed R&D)
- Head of Development, Binex (KOSDAQ Listed
Biopharma)
HyukJong (HJ) Lee
3
Table of Contents
Ⅰ. Introduction of Biologics
III. Value Chain: Biosimilar/Biobetter
IV. Competitive Edges
II. Current Trend of Biologics
V. Investment Points of Views
4
I. Introduction of Biolog-ics
▶ Synthetic Drug vs. Biologics
▶ Types of Biologics
▶ Biologics : Blue Ocean
▶ Biosimilar vs. Biobetter
5
Synthetic Drug vs. Biologics
Aspirin(180 Da)
Interferon-a(19,625 Da)
Antibody IgG(150,000 Da)
Artificially Synthesized Exist in the Body
6
Types of Biologics
Pro-tein
Cell
■ Gene Therapy
■ Genetic Vaccine
■ Aptamer
■ siRNA
■ Antibody
■ Protein
■ Cell Therapy
7
Biologics : Blue Ocean
Synthetic Drug Biologics
Component
- Small
- Synthetic product with simple
structure
- Big
- Bio-product with complex struc-
ture
Side effect - Synthetic Often - Existing in the body Rare
Market Value
- Low approval rate for new drug
- Blockbuster
- High approval rate for new drug
- Blockbuster
Develop-ment
Method- Capital concentrated - Technology concentrated
Develop-ment
Period- Avg. 11 years (U$240mln) - Avg. 8.5 years (U$180mln)
8
Biosimilar vs. Biobetter
Biosimilar Manufacturing
Process
1. Insert plasmid containing a gene for
protein of interest into a host cell.
2. Express the gene within the host cell.
3. Culture the host cell, produce and purify
the protein of interest.
Replaces original biologics after patent expiration. Biosimilar is produced in large
amount through DNA recombinant process using colon bacillus, e-coli, yeast, and an-
imal cell
Biosimilar
Biosimilar Manufacturing Process
Biobetter
Superbiosimilar
9
II. Current Trend of Biologics
▶ Industrialization
▶ Globalization
▶ Current Biologics Market Trend : “Bio-better”
10
Industrialization
Biologic Market: One of Core Fields in Pharmaceutical In-dustry
Aided by Gvernment-Funded Project (ex: Smart Project), Industrialization Has Already Embarked by Big Conglomerates’ Entrance
Reference: Vision and Strategy of Biologic Industry in 2020, Industrial Researcher, 2007.6
Unit: U$mln Unit: U$mln
CAGR14.1%
CAGR18.6%
Global Biopharmaceutical Market
Korean Biopharmaceutical Market
71,807
163,783
370,723
516,835
2005 2010 2015 2020
1,016
2,860
7,417
13,070
2005 2010 2015 2020 Reference: Vision and Strategy of Biologic Industry in 2020, Industrial Researcher, 2007.6
11
Fierce Global Competition in Bio
Entering into Biosimilar IndustryMerck (2008) - Developing superbiosimilar with “Generic Technology”
Eli-Lilly (2008. 10) - Acquiring ability to develop biologics by M&A of Imclone - 40% of 59 products under R&D is biologics - Starting business development of Biosimilar
Pfizer (2009. 12) - Planning to utilize 10-15 biosimilar in 4-5 years - Gathering internal resources for biosimilar because they expect the market to grow soon - Looking for Business alliance and M&A for superbiosimilar
Japanese Pharma. – Aggressive M&A of Biotech. - Takeda (Acquisition of Millenium-RNAi), Eisai (Acquisition of Morphotech-mAb), Astellas (Acquisition of Agensys-mAb), Kissei (Applied for EPO Biosimilar ap-proval) etc. - Getting ready to compete with international big pharma. by developing business alliance and M&A of bio-venture
Globalization
12
Biologics Market Trend: “Biobetter” in 1st Genera-tion Protein
Expansion of 2nd Generation Protein Therapy with Improved half-life and efficacy
Characteristics of Protein Therapeutic Market
Progress of Protein Therapeutic Market
High-Valued Knowledge-Inten-
siveRapidly Growing Wide Applicable
• Improvement of Biosimilar (Long-acting, Vitality, and Reduced frequency of administration)
• Patent Expiration of Block-buster Drug
(Price competitiveness)
OriginalBiologics
1st GenerationProtein Therapy
(Biosimilar)
2nd GenerationProtein Therapy(Superbiosimi-
lar)
13
※ Neulasta (PEG-GCSF, 2nd Generation) Neupogen (GCSF, 1st Generation)
※ Aranesp (Glyco-EPO, 2nd Generation Drug) Epogen (EPO, 1st Generation Drug)
Mil
lion
US
$
Reference: Datamonitor 2008
Year
Market Dominance of Biobetter (2nd Generation)
Biologics Market Trend: “Biobetter”
14
Biosimlar in mAb (Including Antibody-fusioned Protein)
1. Econimic Crisis due mainly to Fiscal Deficit Inevitable Reduction in medical expenditures
Huge price reduction pressure in new molecules as well as generic
2. Tipping Effect in Price reduction
Less weight in innovative drug development
3. Biosimlar in main trend for the time being
Why generated in Europe
Merck’s Enbrel L/I (US$720mln + Royalty & Success Incentive)
Boehinger Ingelheim’s announcement into biosimilar
Biosimilar : Main Trend
15
III. Value Chain of Biosimilar & Biobetter
▶ Key Issues of Biosimilar Development
▶ Value Chain by Development Steps
▶ Biosimilar vs. Biobetter
▶ Current Technologies for Superbiosimilar
16
Key Issues of Biosimilar Development (1)
Obstacles in Biologics Development
A. BIOEQUIVALENCE
- Difficulty in establishing bioequivalence or biosimilarity (especially for mAbs).
- Enormous costs for carrying out PHI/II of clinical trial and for proving its comparability.
- Differing regulations: EMEA has only recently published guidelines for antibody biosimilars.
B. LOW PRODUCTIVITY
- Manufacturing a Highly Efficient Cell Strain.
- Developing an Efficient Production Method.
C. FACILITY
- High cost of a bio-manufacturing facility (Hanwha, Samsung Electronics, Celltrion, etc.)
- Utilizing CMO (KBCC, international CMO facilities, etc.)
D. TIMING
- Patents for most original biologics expire within 3 years.
- The systemic strategy and the commercialization with the right partner are needed.
Higher Entrance Barriers Compared to Chemi-cal Generics
17
Track 1
Originating Countries:
• Pros: ↑Speed (IF approval is granted)
• Cons: ↑Risk ↓Quality ↓Marketability
• Current collaborations:
- Two biosimilars have been licensed out to
Brazil (one from India, the other from China).
- Seeking ANVISA approval.
• Target market: Developing countries
• Currently Brazil only
Track 2
Originating Countries:
• Pros: ↓Risk ↑Quality ↑Marketability
• Cons:↓Speed
• Current Collaboration:
- Merck for global rights for its first
biosimilar
- Global Company S for the first mAb
biosimilar in Japan then in EU.
• Target market: The entire world
Models for Biosimilar Collaboration
Key Issues of Biosimilar Development (2)
18
Value Chain by Development Steps
Cultivation and Purifying Process
(Establishing CMC)
Cell Line De-velopment
IND filing/Clinical Trial/Production Marketing
Key
Players
LG Life Science, Green Cross, Dong-A Pharma
ISU Abxis (with KBCC)
Key
Infra
- Cell Line
Manufacturing
Technology
- Improving Pro-
tein
(Long-acting, Vi-
tality),
- Technology of
Process Develop-
ment
(High Yield, Safe,
documentation)
- Clinical Trials
Through CRO
- GMP Manufactur-
ing
Facilities
- Sales Organization
- Global Partners
Bio-Ventures KBCC (Binex)
Samsung Electronics
Celltrion, Hanhwa
Biologics Value Chain by Development Steps
Needs to Overcome Major Hurdles to Commercialize and Re-quires Intimate Connections among Partners
19
Biosimilar vs. Biobetter
It is Possible to Lower the Development Risk and Maximize the Profit by 2nd Generation Technology
Due to Comparable R&D Costs and Risk with Biosimilar,
Demand for Biobetter is Increasing to Generate Higher Profit
Biosimilar Biobetter
Development period
7 ~ 9 years 8 ~ 12 years
Patent Not Protected Protected by Patent
Investment Payback
Long-term, Relatively Risky Long-term, Risky
Barrier Medium High
Competition Becoming fierce Blue Ocean
Profit Medium High
Success Factor
Early Investment Size,Approval Procedure
(Determined by External Factors )
Core Technology
(Determined by Internal Factor)
20
Current Technologies for Biobetter
1. Glycosylation : Improving half-life by adding sugars to proteins
Low Costs due to Biological Response.
But has Limited Applicable Range
21
Current Technologies for Superbiosimilar
2. PEGylation : Improving half-life by adding PEG to proteins
Widly Applicable but costly,
Also Needs High Technology and Has to Overcome Patent Obstacles
22
Current Technologies for Superbiosimilar
3. Mutation : Improving half-life and vitality by replacing amino acids in protein (antibody) : ADCC & CDC
It is possible to improve characteristics such as efficacy and half-life, but there are issues on immunogenicity.
23
Current Technologies for Superbiosimilar
Replacing Fab with Therapeutic
Protein
• Cytokine
• Hormone
• Peptide
Fc region
• Improving half-life
X X
4. Antibody Fusion : Antibody fusion with recombinant protein allows to manufac-turing a long-acting Biobetter
Low Costs and Widely Applicable,
But Patent Issues Exist
24
IV. Competitive Edges
▶ Value-Creating Strategy: Global Pharmaceutical
Company
▶ Value Creating Strategy:
Domestic Bio-Venture/Pharmaceutical Company
▶ Competitive Edge Strategy
▶ Proposal
25
Global Pharmaceutical Company : Merck
Current News - 2006. Acquisition of Abmaxis (Technology : Affinity and Efficacy of Anti-body) - 2006. Acquisition of Glycofi (Technology : Humanized Yeast Expression Sys-tem) - 2008 (Early) Official Announcement of Entering into Biosimilar Industry - 2008. 12 Foundation of Merck Bio-Ventures. Expect to Invest U$1.5bln until 2015"We have the chance with the technology from Glycofi to not only make a product that has a somewhat similar profile, but a product we can im-prove… We have the unique ability to change, potentially, the potency of the product, the immunogenicity and other attributes.”
- Frank Clyburn, senior vice president and general manager of Merck Bio-Ven-tures.
Entering into biosimilar business by utilizing abundant resources to secure solid bio pipelines as a new growth engine (More Intensive Competition expected in biosimilar industry)
Many big global pharmaceuticals are exploiting the bio industry targeting bio-betters based upon “Platform Technolo-gies”
Value Creating Strategy : Global
26
Domestic biotech-ventures and pharmas are de-veloping competitive bio-betters for global Market
based upon “Platform Technology”Pharma. “Platform” Technology Pipeline
HanAll
High-speed Protein Engineering
technology/Oral formInterferon, hGH, EPO, TPO,
Protein X, Protein Y, etc.
HanMi Pharma.
LAPSCOVERY Technology
G-CSF, EPO, Exendin-IV, hGH,
Interferon, FSH, Factor VII, etc.
Genexine
Hybrid Fc Technology EPO, G-CSF, GLP-1, hGH, etc.
Value Creating Strategy : Domestic
X X
27
1. Portfolio Strategy by Using Bio-better
Risk
Retu
rn
New Chemical Drug
Chemi-cal
Generic
Medium-Risk
High-Return
Competitive Edges Strategy
Biosimilar
New Biologics
Medium-Risk
Medium-ReturnSize : R&D Invest-
ment
28
2. Acquiring New Growth Engine based upon “Platform
Technology”
Platform
Technology
Diversified product portfolio
is made possible through
“platform” technology as
opposed to a highly risky
single product development
Ex) Albumin Fusion Technology
(HGS)
G-CSF, EPO, Exendin, hGH…
Competitive Edges Strategy
29
• Aiming “antibody and protein
therapy” as they are applicable
to diverse diseases
• By utilizing “platform” tech-
nology,
a progress gap can be made up
by developing bio-betters
• Maneuvering network
• Strategic alliance with expe-
rienced
partners
Solution
• Advantageous to target
a niche market
• Slow-Start in comparison
to
global Competitors
• Insufficient experienced la-
bor force and Bio infra-
structure
Current Situation of Domestic Company
Proposal (1)
30
Manufactur-ing
Clinical Test, Manufactur-
ing
Research
Producing Early Cell
Stains
Develop-ment
Pre-Clinical
Sales & Market-ing
Sale
Bio-Ven-ture
Partners
Develop &
Process(CMC)
Proposal (2)
Needs to maximize the possibility of commercial-ization through business collaboration
31
V. Investment Points of Views
▶ Current Step of Korean Bio-industry
▶ Investment Proposal
32
The Current Step of Korean Bio-Industry
2nd Chance for Globalization of Biologics!
1st Generation Bio-venture
Direct IPO
1998 2002 2007 2010Destiny of
1st Generation Bio-venture
KOSDQ Col-lapse
Back-door Listing
New biologics
DNA Therapy
Fail!
DNA Analysis
Liquidation
Success Story (Step-up)
Global Commercialization,
Developing New biologics
Instead of incubating the early-stage bio-ventures, intensive/selective investment on potential companies (listed or unlisted) to
create “success story” of commercialization
Foundation of BiotechDiagnosis & Equipment
Maintenance
33
Investment Proposal
Resolving the Biggest Bottle-Neck of Bio-Indus-trialization!
Successful Company
Successful CompanyEarly-Stage
Bio-VentureEarly-StageBio-Venture
Potential CompanyPotential Company
1st Phage Investment(by Venture Capital Fund, Government grants, etc)
2nd Phase Investment
Expediting Bio-Industrialization by Precedent Success, and Establishing Virtuous Cycle by
Providing Proper Environment for Follow-Up Bio-Ventures!
Private Equity Invest-ment(Global Commercializa-tion)Synergy Effect(Preferred Platform Technology)
Concentration