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

BioSpectrum (Asia) - - Bio Content - Aish­warya Venkatesh aish­[email protected]­tiv.com

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.

Govern­ment sup­port

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.

In­vest­ments by

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.

Chal­lenges

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.

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