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Omnitrope deferral casts doubt over biogeneric development In light of the approval setbacks faced by Sandoz's Omnitrope at both the FDA and the EMEA, the prospects for an imminent biogeneric launch seem to be receding. Datamonitor's Adele Schulz assesses the prospects for biogenerics in both Europe and the US... Despite being available outside of western markets, from companies including Savient, GeneMedix, Dragon and SICOR/Teva, no biogenerics (or follow-on proteins, to use the FDA's official terminology) have yet been approved in the US or European pharmaceutical market. With Datamonitor's analysis suggesting that biologics accounted for 28% of 2002 sales of blockbuster products that entered 2003 without patent protection, the development of biogenerics represents a significant opportunity for companies with such capabilities. At the same time though, the lack of a regulatory pathway means those companies that have invested in biogenerics have yet to reap the rewards of this investment. Novartis' generics subsidiary Sandoz is at the head of the race to launch a biogeneric in Western markets. Despite being filed for regulatory review in both Europe and the US, approval of the company's human growth hormone, Omnitrope, is far from imminent. First, in March 2004, it emerged that Novartis had sued the European Commission for failing to grant marketing approval for the product, despite it having received a positive opinion from Europe's Committee for Proprietary Medicinal Products (CPMP) in June 2003. It is believed that Novartis was informed of the Commission's decision not to proceed with marketing approval in November 2003, although the company has released few details of the situation. More recently, on September 2, 2004, Novartis announced that the FDA had completed its review of Omnitrope, and despite not having identified any deficiencies in the application, had been unable to reach a final decision on approval. Ongoing uncertaintyThe reason for the lack of a regulatory pathway for approval of biogenerics lies in the complexity of biological products. Biologics are large, complex, heterogeneous molecules, for which the manufacturing process can be a determinant of the end product. For a would-be biogenerics manufacturer, demonstrating that its product was as safe and effective as the originator's would be a difficult task, since establishing that immunogenicity had not been altered, and that any undetected differences in the product would not impact safety and efficacy, would be problematic without conducting clinical trials. The large market potential makes biogenerics an attractive prospect for companies currently faced with limited scope for expansion of profitability in the commodity generics markets. However, potential biogenerics players need an abbreviated approval pathway to avoid undertaking the same large scale clinical development process as the originator companies, and thus allow them to market their product at a discount to the brand while maintaining a healthy profit margin. Is Europe still ahead?While Europe has already introduced guidelines on establishing biosimilarity, as part of a broader review of pharmaceutical legislation that must be enacted by November 2005, there are still some hurdles to overcome, as evidenced by Sandoz's recent action against the European Commission. It is possible that, as Sandoz's application was filed prior to the establishment of regulatory guidelines on biosimilarity, there may have been confusion surrounding the nature of the data required, leading to the discrepancy between the CPMP's positive opinion and the EC's decision not to approve the product. The US meanwhile has yet to introduce legal guidelines on biosimilarity at all. It has been argued that the 505(b)(2) provision of Hatch-Waxman (the Hatch-Waxman amendment of the Federal Food, Drug and Cosmetic Act) lays out an abbreviated approval pathway for generic versions of small molecule drugs) provides a route for the FDA to approve a biological therapy that is different from the originator product, yet relies on data filed by the innovator as part of the original NDA. It is via this route that Sandoz filed for approval of Omnitrope, triggering strong opposition from Pfizer, which markets the branded human growth hormone Genotropin. The FDA attributed its deferral of a decision on Omnitrope's approval to "uncertainty regarding scientific and legal issues". While the scientific issues may be addressed at the FDA's long-awaited workshop on follow-on proteins, to be held on September 14-15, the legal issues will take longer to resolve, and will most likely require legislation from congress (this view has been backed up by comments made by then-FDA commissioner Mark McClellan in March 2004, that guidelines drawn up by the FDA would be scientific guidelines rather than "what is permissible under law"). Thus, with guidelines already part of European pharmaceutical legislation, Europe is still likely to be ahead of the US in approving the first biogeneric product, although this is not now likely to happen before late-2005 at the earliest. Assessing the impact on branded biotechsDatamonitor has identified at least nine biogenerics companies targeting human growth hormones, as well as 11 targeting erythropoietins, 10 targeting interferons and at least five targeting insulins. Approval of the first biogeneric in both Europe and the US is expected to pave the way for development and approval of even more versions, by providing companies that are currently adopting a "sit-and-wait" strategy for development of biogenerics with a greater clarity on the level of investment required. Nonetheless, the biogenerics market is expected to see far fewer players than the intensely competitive regular generics market. High upfront investment, opposition from the biotechnology industry and the need for sales and marketing expertise are likely to present the majority of players with considerable obstacles to market entry. Most of the players currently in the biogenerics market fall into two key categories: biotech start-ups such as Cangene, Microbix and GeneMedix, and established generics companies looking to expand their existing portfolios such as Stada, Teva, and Sandoz. The latter group either form partnerships or make acquisitions to bring the necessary expertise in-house, while the former group possess in-house development and possibly manufacturing capabilities but are likely to need external input when it comes to marketing and distribution. The high barriers to market entry will necessitate a smaller price differential between brand and generic products than that seen in regular generics, and initial physician and patient reluctance to take up biogenerics may limit the impact of competition on originator companies. Likewise, the types of biologic products that are likely to be targeted may also be limited, as proving equivalence to simpler products such as growth hormones will be more feasible than proving similarity to the more complex biological products such as monoclonal antibodies. Biologic brands will also be protected by the innovators' ability to develop added-value formulations ahead of patent expiry. For instance, several of the biogenerics companies that had been developing versions of Schering-Plough's Intron have now discontinued development, as most patients are now prescribed PEG-Intron, the extended release version. Although some biogenerics players will look to develop added-value formulations themselves, this raises the barriers to entry still further. Related research:
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