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Biosimilars: Where Do We Stand and

Where Are We Headed?

Timothy J. Shea, Jr. 2008 LESI Annual MeetingVincent L. Capuano Chicago, IL May 7, 2008


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Overview

I. Legislation and Investment

II. Technical Issues

III. Immunogenicity and Interchangeability

IV. Data Exclusivity and Patent Scheme

V. EP Experience

VI. Predicting the U.S. Market


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Overview

Where Do We Stand? The Political Climate The Legislative Climate

Analysis of H.R. 5629

The Regulatory Climate Technical issues Immunogenicity and Interchangeability Data exclusivity and patent scheme

Where Are We Headed? Predicting the U.S. Regulatory Framework Insights from the EU experience

Predicting the U.S. Market The likely players

Risk/reward analysis Conflict issues


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The Political Climate A Perfect Storm

The Biopharmaceutical market is rapidly growing Currently $40B market Predicted to be 30% of entire therapeutic market within 5 years Growth rate is 4x that of small molecule market

$10B in biotech products off patent by 2010 Some estimates as high as $18B

Currently no legislative or regulatory framework for approving biosimilarsin U.S.

Pressure from Consumer Advocacy Groups Biopharmaceuticals are increasing component of Medicare/Medicaid costs Top 5 Medicare expenditures are biologicals (Waxman) EPO alone = $2B

Cost comparison: Traditional small molecule drug = $2/day Typical biologic = $44/day


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The Political Climate A Perfect Storm

Pressure from Congress

Cost of healthcare, particularly for seniors, is hot issue

Under pay-go rule, lower drug expenditures can offsetcosts of other new legislative programs

Pressure from Industry:

BIO now recognizes biosimilars are a matter of when, not If wants right legislation now (before new Congress)

GPhA wants legislation soon (but concerned about dataexclusivity)

Bush 2009 Budget incentives to FDA establishbiosimilar regulatory framework


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BLA for Biosimilar Requirements (House bill)

Applicant must demonstrate that:

Product is biosimilar to a reference product Product and reference product utilize the same

mechanism of action for the condition of use

Condition of use has been previously approved forreference product

Route of administration, dosage form and strength aresame as reference product

Facility meets standards to assure safety, purity andpotency


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Biosimilarity Data Requirements (FDAdiscretion to waive)

1. Analytical studies demonstrating that product is highly similar to

reference product

2. Animal studies including toxicity

3. Clinical study (or studies) to assess immunogenicity and pharmacokinetics or

pharmacodynamics to demonstrate safety, purity andpotency for each use


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House bill (continued)

Biosimilarity, Interchangeability and

Immunogenicity criteria all determined by FDAguidance proceeding for each product class.


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Submission of Application for Biosimilar(House bill)

Application may not be submitted until the laterof:

1. Commencement of guidance process for product

class, or2. 4 years from approval of reference product

No FDA approval until guidance process iscompleted.


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Additional BLA Information

Shall include publicly-available information

regarding previous FDA determination of safety,purity and toxicity

May include other information, including publicly-available information regarding the referenceproduct or another biological product


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Need for clinical, manufacturing, regulatoryand sales expertise suggests that few generic

companies will compete with BigPharma/Biotech

Estimated $40M investment required forbiosimilar approval


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Two factors driving the debate overbiosimilars:

1.Hatch-Waxman experience with small molecules

2.Complexity of biological products compared tosmall molecules


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Hatch-Waxman Impact:

U.S. Sales (2007):

Brand ($228B) Generic ($58.5B)

8,730 of 11,487 drugs with Orange Book listingshave generic counterparts

Source: FDA, MedAd News


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By 2010 biopharmaceuticals will represent50% of the pharmaceutical market

was 20% in 2004 (PhRMA 2006 survey)

120 biopharmaceuticals existed in July 2007,with 418 new biopharmaceuticals indevelopment, mostly oncology, infectious and

autoimmune diseases, respiratory disorders(PhRMA 2006)


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Important Considerations for Biosimilars:

Size/complexity

Protein folding Variants/Impurities

Cell line

Purification process


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High complexity + Little knowledge = Need forclinical data

Example: Recombinant interferon interactswith nearly 100 genes exact mode of action

difficult to predict and explore

Example: Recombinant erythropoetins

differences in carbohydrate structure and sialicacid residues


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Importance of manufacturing process control

Each manufacturers unique cell line is

constructed with a unique proprietary DNAexpression vector

Cell line must be evaluated for product integrity,

activity and overall quality Minor variations can lead to important product

differences that impact safety and potency

Experience will lead to predictability


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Myozyme (alglucosidase alpha) FDArejected Genzymes request to add a

manufacturing site

FDA is concerned about slight differences incarbohydrate structure and requires morehuman data for product made at requested

site.


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Immunogenicity (House bill)

FDA may waive assessment of immunogenicity as

unnecessary only if final guidance is publishedafter receipt and consideration of public comment:

(1) advising that it is feasible to make immunogenicitydetermination for the product in the product class, and

(2) explaining the data required to support such adetermination


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Potential consequences of immunogenicity: Loss (or enhancement) of efficacy

Neutralization of a native protein

General immune effects (allergy, anaphylaxis, serumsickness)

Example: production of neutralizing antibodiesagainst recombinant eythropoetin caused severeepoetin-resistant anemia requiring bloodtransfusions, immunosuppressive treatment andkidney transplantation


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Interchangeability (House bill)

FDA may determine that biological product isinterchangeable with reference product if information is

sufficient to show that biological product: is biosimilar to the reference product (or any product found to be

interchangeable with reference product);

can be expected to produce the same clinical result as referenceproduct in any given patient for each use prescribed, recommendedor suggested in referenced product labeling; and

For product administered more than once, the risk in terms ofsafety or diminished efficacy of alternating or switching is not

greater than the risk without alternating or switching


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Inappropriate substitution occurs when

Pharmacist overrides prescription and chooses aproduct from the same class, or

Prescription lists product class but doesnt specifyproduct and pharmacist chooses (based on priceor personal experience)


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Exclusivity for First Interchangeable Product(House bill)

Not same as first biosimilar

No subsequent determination of interchangeability

until 24 months from later of First commercial marketing of interchangeable product,

or

Date of interchangeability determination for productpreviously marketed.


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House Bill up to 14.5 years

12 year exclusivity for reference product

two additional years of exclusivity if subsequent

approval for new indication within first 8 years, ifnew approval is a significant improvementcompared to marketed products

6 months PED exclusivity


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Patents - Exchange of Information (House Bill)

Exchange with Reference Product Sponsor (RPS)

Biosimilar license applicant must provide copy ofapplication and information concerning product(manufacturing details etc.) to RPS within 30 days ofFDA acceptance of application;

RPS provides applicant with list of relevant patentsowned by sponsor within 60 days of receipt ofapplication and information;


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Patents - Exchange of Information (House Bill)

Exchange with Interested Third Parties (ITP)

Any time after FDA publishes notice of application, anyITP may notify applicant that ITP has 1 or more patentsthat may be relevant

Within 30 days of receipt, applicant shall send ITP

application and information concerning product(including manufacturing information etc.)

Within 90 days of receiving information, ITP shall

provide list of relevant patents.


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Patents Identification for basis ofinfringement (House Bill)

For any patent identified, RFP or ITP Shall explain in writing why the relevant patent would be

infringed by the biosimilar product, or its use in theindicated treatment

May specify whether the patent is available forlicensing; and

Shall specify the number and expiration date of the

relevant patent


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Patents Patent certification by applicant(House Bill)

Not later than 45 days after receiving basis forinfringement, applicant shall send a writtenstatement to the RPS or ITP either:

a. stating that applicant will not commence marketing

and not seek FDA approval before the expiration date ofthe noticed patent; or

b. providing a detailed written explanation of the

reasons why the patent would not be infringed, is invalidor is unenforceable.


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Patents Action for Infringement (House Bill)

If infringement action brought within 60 days ofreceipt of written statement, and patent found tobe infringed, then FDA may not approve

application until after patent expiration

DJ action may not be filed more than 3 years

before expiration of FDA exclusivity


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V. The European Perspective

Similar biological medicinal products

Legal framework exists; regulatory framework

is developing 5 biosimilars approved to date by EMEA

Omnitrope (Sandoz)(2006)(first biosimilar

approved by EMEA) Valtropin (Biopartners)(2006)

Binocrit (Sandoz)(2007)

Epoetin alfa (Hexal)(2007) Abseamed (Medice Arzneimittel Ptter)(2007)


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Core Principles

Biological medicinal products are much more

difficult to characterize than small molecules Broad spectrum of complexity across biological

products

The standard generic approach normally appliedto small molecules is scientifically notappropriate for biologicals

Patient safety is paramountin EMEA decision


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Core principles Decisions should be made on case-by-case basis

and dictated by the science

The toxological and clinical profile of the biosimilarshall be provided

A well-defined regulatory framework can only bedeveloped over time based on experience andincreased scientific knowledge

Patients and physicians must be informed in the

event of the substitution of an original product by asimilar biological product


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Legislative Authority

Commission Directive 2003/63/EC

Regulatory Authority Overarching Guideline (CHMP/437/04) Defines core principles

General Guidelines for Biotechnology-Derived Proteins Quality

Nonclinical

Clinical

Annex guidelines product specific Insulin, Somatropin, GCSF, Epoetin, INF-alpha, Others


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VI. Predicting the U.S. Biosimilars Market

FDA Policy (in development)

Focus on public health

Science based Recognize what can and cant be done

Data driven

Flexible to reflect changing technologies

Sounds a lot like EMEA core principles

Genzyme experience with Myozyme

Suggest careful approach by FDA regarding manufacturingfor biosimilars


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Regulatory framework will be very different than thatfor generic drugs

Key differences: Likely requirement for clinical trials (at least initially) High threshold for interchangeability designation,

resulting in fewer products being deemed substitutable for

reference product

Some commentators estimate $40M per biosimilar to meetregulatory requirements

Potential for post-marketing monitoring


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Impact on Market:

Generic drug companies will be involved

Teva acquisitions

CoGenesys, Sicor, Tianjin Hualida

Sandoz

Deal with Momenta

Barr acquired Pliva

However, Big Pharma and Biotech will be players too Existing expertise with biologic formulation and manufacturing

Expertise with clinical trials

Sales force capability (key if biosimilar is alternative treatment) Capital to invest


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Biosimilars will have different risk:reward ratio thansmall molecule generics

Higher investment One estimate is $40M per biosimilar product

Predicted lower market penetration rates compared totypical small molecule drugs

Small moleculesPup to 90% penetration rate BiosimilarsP optimistic estimates of 20-50%

interchangeability is key to substitution (but more difficult to obtain)

Examples:

Omnitrope/Tev-Tropin = 3.4% of HGH market (still early) DynepoP 10% market penetration expected by Shire


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Conflict Issues

Technical and regulatory differences between biosimilarsand small molecule generics will present new challenges in

resolving conflicts of interest For small molecule generics, advisors and consultants are typically

split into two camps: NDA holders vs. generics

For biosimilars, brand companies will be playing both sidesP thus

advisors and consultants must also

Conflict resolution will be technology driven Advisors and consultants chosen for technical/legal expertise

Exclusive allegiance to brand vs. generic less important


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Conclusions

Biosimilars are coming (sooner rather than later)

Complex nature of biologicals will requiresignificantly different regulatory scheme than smallmolecules

European experience will inform FDA policy

Clinical trials presumed (at least initially) Higher barrier to entry and greater risk to reward

Fewer, more sophisticated players, including big

pharma and biotech


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Thank You

Timothy J. Shea, Jr., Director

Vincent L. Capuano, Director

Sterne, Kessler, Goldstein & Fox P.L.L.C.

(202) 371-2600www.sternekessler.com

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