SOUTH KOREA – LEADING BIOSIMILARS OPPORTUNITIES FOR ASIA
Historically, Asia has led in generics adoption and now, with more than 300 biosimilars under development, Asia is one of the leading regions for global biosimilars development. The foundations have been laid for the biosimilar industry in Korea, providin
Historically, Asia has led in generics adoption and now, with more than 300 biosimilars under development, Asia is one of the leading regions for global biosimilars development. The foundations have been laid for the biosimilar industry in Korea, providing an opportunity for the region to become a global center for manufacturing and adoption of biosimilars in the next few decades. Just as Indian companies have carved out a leading position in the generic drug market, South Korean companies are poised to take leading positions in the biosimilars industry in the coming years.
In the last four decades after the Korean War, South Korea has evolved from one of the most abject states in the region to one of the most vibrant manufacturing powerhouses in Asia. From electronic devices to smartphones, the country’s manufacturing groups have driven extraordinary economic growth over the past 50 years making the region one of the strongest developed economies in the world. And healthcare is no exception. A growing market, ageing society, favorable regulatory policies and investments, a new global competitive environment have made the region one of Asia’s biggest pharma, biotech manufacturing and innovation hubs.
For Korea, much of this growth in the biopharma space has come from biosimilars. With over hundred biosimilars under development (as per Statista’s latest data) South Korea has emerged as one of the strategic location for the development of biosimilars on the global level. The country is proving to be one of the most promising nations where pharmaceutical companies have identified huge investment potentials for the biosimilar development and commercialization. In 2017, two out of three biosimilars sold worldwide were Korean products, reports Business Korea. The report further articulates that global revenues of top four biosimilar medicines amounted to 2.65 trillion won ($2.38 billion) in 2017, and of the total, South Korean products accounted for 1.76 trillion won ($1.58 billion), or 66.4 per cent.
The South Korean Ministry’s figures paint a similar picture. The country’s leading Korean news agency-The Korean Herald provided an elaborate coverage of Ministry’s report. The article states that pharmaceutical export volume for 2017 rose to 30 per cent to reach $4.07 billion, riding on strong sales of biosimilars and botulinum toxin drugs. Exports of biologic drugs in 2017 stood at $1.37 billion, up 28.6 per cent on-year, and accounted for 33.6 per cent of the country’s total pharmaceutical exports.
Japan, the article says, was the biggest export destination for Korea’s pharmaceutical products, importing $497 million worth. The ministry attributed the sharp growth of Korea’s biologic drug exports to robust overseas sales of biosimilar drugs.
Last year, Korea’s top export biosimilars were Celltrion’s Remisma and Truxima for which export volume reached $564 million and $348 million respectively.
Founded in 2002, Celltrion has been at the forefront of biosimilar development in Korea.
Unlike generics, biosimilar development is a long and tedious process involving huge investments and failure risks. Yet Celltrion overcame these hurdles to develop the first copy of Johnson & Johnson’s rheumatoid arthritis drug Remicade, which was the world’s third best-selling drug last year, with sales of $10 billion. This was seen as a landmark achievement in biosimilar development. The Celltrion version, known as Remsima or Inflectra, was launched in Europe and is now sold in 40 countries worldwide. Celltrion, currently, has 6 independent pipelines for developing therapeutic agents against cancer, respiratory diseases and autoimmune diseases.
Samsung Bioepis, Korea’s another major biosimilar giant, also put up a good show in biosimilar sales last year. The company’s Benepali recorded 531.8 billion won ($478 million) in sales, accounting for 98.4 per cent of the global Enbrel sales (a biosimilar of Pfizer-produced autoimmune disorder drug). The company currently has more than six drugs focussed on immunology, oncology and metabolic diseases. The firm has grown to become the only company to get four biosimilars of Enbrel, Remicade, Humira, and Herceptin – Benepali, Flixabi, Imraldi, and Ontruzant – approved in Europe.
Apart from these giants few other Korean firms like LG Chem, GC Green Cross, Chong Kun Dang, CJ Healthcare, and Dong-A ST have also jumped into the bandwagon. Chong Kun Dang has been busy developing biosimilar CKD-11101 for anaemia and if approved, CKD-11101 will be launched as the world’s first NESP biosimilar next year. LG Chem recently got the nod from the Ministry of Food and Drug Safety
JAPAN, WAS THE BIGGEST EXPORT DESTINATION FOR KOREA’S PHARMACEUTICAL PRODUCTS, IMPORTING $497 MILLION WORTH. THE MINISTRY ATTRIBUTED THE SHARP GROWTH OF KOREA’S BIOLOGIC DRUG EXPORTS TO ROBUST OVERSEAS SALES OF BIOSIMILAR DRUGS. LAST YEAR, KOREA’S TOP EXPORT BIOSIMILARS WERE CELLTRION’S REMISMA AND TRUXIMA FOR WHICH EXPORT VOLUME REACHED $564 MILLION AND $348 MILLION RESPECTIVELY. FOUNDED IN 2002, CELLTRION HAS BEEN AT THE FOREFRONT OF BIOSIMILAR DEVELOPMENT IN KOREA. SAMSUNG BIOEPIS, KOREA’S ANOTHER MAJOR BIOSIMILAR GIANT.
to sell Eucept, an Enbrel biosimilar, to treat a range of autoimmune diseases. The approval of Eucept marks the second Enbrel biosimilar to get regulatory approval in Korea. The majority of mAb biosimilars are being developed in Asia (44 per cent) and Europe (36 per cent), with South Korea being the global leader with 17 mAb portfolio products from nine different biopharmacompanies.
It all began in 2010, when the Ministry of Knowledge & Economy announced unprecedented capital and regulatory support to boost the industry and set an ambitious target for Korean pharmaceuticals to capture 22 per cent of the global biosimilars market share by 2020. “The local generic pharmaceutical industry failed to advance to the global market because it just settled for the domestic market. We need to make this an opportunity for Korea to become a leader in the global bio and pharmaceutical industry,” said, the Minister of Knowledge Economy Choi Kyung-hwan at a meeting with chiefs of local pharmaceutical firms, as quoted by a leading Korean daily.
Since then South Korean government has rolled out many favorable policies and capital investments to foster Korea’s biotech sector. There are many favorable steps undertaken by the government in this regard, some of them being tax holidays, tax concessions, cash grant, site location support and
financial support for pharmaceutical companies investing in Korea etc.
Thus, with all the government policies and frameworks, the biosimilars market in South
Korea has become one of the most promising growth engines of the nation and is attracting huge investments from public and private companies located in and outside Korea.
Korean companies in biosimilars
Responding to rising demand for antibody biosimilar Remsima, Celltrion has decided to invest 325.1 billion won ($275 million) to ramp up current 140,000-liter capacity to 310,000 liters by 2019 by expanding
established facilities and building a new plant.
With capacity expansion, industry experts say, Celltrion will beat rival contract manufacturing organizations -- Germany’s Boehringer Ingelheim (300,000 liters) and Switzerland’s Lonza (280,000 liters). Samsung Bioepis, also expects to reap a windfall from its drugs, targeting revenues worth 1 trillion won (~$872 million) by 2020. Samsung BioLogics, the parent company of Samsung Bioepis said it is on track to complete its third manufacturing plant in Songdo, Incheon, this year, which when completed will make the South Korean company the largest “pure play” biologics contract manufacturer in the world. With the completion of this plant, the company will have the total production capacity of 362,000 liters and will have invested $2.6 billion (3 trillion won), in manufacturing capabilities. Commercial production is expected to begin at this plant in 2020.
Biosimilars have hit the market at a time when the global pharmaceutical industry is bearing the brunt of two important events-unprecedented patent expirations on the world’s top pharma brands along
with the increasing healthcare burden and an ageing society. Thus an increasing number of international pharmaceutical companies are entering the market, and the rise of Chinese and Indian companies who lead with price competitiveness may hinder the future growth of Korean companies. Also, despite progress, there remain several challenges, including stringent regulatory requirements, continued education of patients and physicians, the problem of switching between originator reference products and biosimilar pricing issues. Moreover, biosimilars have higher regulatory barriers than traditional generics, the manufacturing processes for biologics involve growing cells, which are very difficult to replicate. Also, generic drugs do not require clinical trials while biosimilars do. As a result, development of a biosimilar is an expensive undertaking.
Earlier, in an interview with a Korean news agency an official from the Korea Economic Research Institute had said, “Although domestic biosimilar companies have the capacity for mass production, they are weak in terms of global sales networks.
They need to cooperate with global pharmaceutical companies to strengthen their international operations.”
A bright future ahead
As biologics with $79 billion of revenue lose patent protection over the next four years, biosimilars will emerge and change the biotechnology industry’s competitive dynamics. While the biosimilars market is still in its early years, many industry watchers expect it to grow faster than all other pharma segments. The FDA approved five biosimilars in 2017, doubling the number from what was approved until 2016. Historically, Asia has led in generics adoption and now, with more than 300 biosimilars under development, Asia is one of the leading regions for global biosimilars development. The foundations have been laid for the biosimilar industry in Korea, providing an opportunity for the region to become a global center for manufacturing and adoption of biosimilars in the next few decades.
Just as Indian companies have carved out a leading position in the generic drug industry, South Korean companies are poised to take leading positions in the biosimilars industry, opine analysts.
THERE IS AN INCREASE IN THE NUMBER OF INTERNATIONAL PHARMACEUTICAL COMPANIES ENTERING THE BIOSIMILAR MARKET. THE RISE OF CHINESE AND INDIAN COMPANIES, WHO LEAD WITH PRICE COMPETITIVENESS MAY HINDER THE FUTURE GROWTH OF KOREAN COMPANIES. ALSO, DESPITE PROGRESS, THERE REMAIN SEVERAL CHALLENGES, INCLUDING STRINGENT REGULATORY REQUIREMENTS, CONTINUED EDUCATION OF PATIENTS AND PHYSICIANS, THE PROBLEM OF SWITCHING BETWEEN ORIGINATOR REFERENCE PRODUCTS AND BIOSIMILAR PRICING ISSUES. MOREOVER, BIOSIMILARS
HAVE HIGHER REGULATORY BARRIERS THAN TRADITIONAL GENERICS, THE MANUFACTURING PROCESSES FOR BIOLOGICS INVOLVE GROWING CELLS, WHICH ARE VERY DIFFICULT TO REPLICATE. ALSO, GENERIC DRUGS DO NOT REQUIRE CLINICAL TRIALS WHILE BIOSIMILARS DO. AS A RESULT, DEVELOPMENT OF A BIOSIMILAR IS AN EXPENSIVE UNDERTAKING.