Biotech Values

[DewDiligence]

Biogenerics vs Biosimilars

Inasmuch as there is some confusion in the investment community regarding these terms, I thought this synsopsis might be helpful.

1. Fully substitutable biogenerics (referred to as “biogenerics” in this discussion), if they are to be approved at all, will require full characterization of the branded biologic’s active ingredients and “reverse engineering” the manufacturing process of the branded drug so the biogeneric can be produced within the lot-to-lot tolerances of the branded drug. This rules out a transgenic biogeneric (except in the hypothetical case where the branded drug is itself transgenic).

No major jurisdiction currently approves biogenerics, but there is hope that the US Congress will give the FDA the authority to do so on a case-by-case basis.

2. Non-substitutable biosimilars (referred to as “biosimilars” in this discussion) do not necessarily require full characterization of the branded drug’s active ingredients or reverse engineering of the branded drug’s manufacturing process, and hence transgenic drugs can play a role here. However, because biosimilars are by definition not substitutable for their branded counterparts, they will need to be actively marketed just as branded drugs are marketed. The need to build a sales and marketing infrastructure and hire a salesforce renders the economics of biosimilars similar to the economics of branded biologics with the lone exception that the clinical data used to obtain regulatory approval may rely in part on published clinical data for the branded drug.

The EMEA has approved several biosimilars, but all of them are relatively simple proteins such as EPO, G-CSF, and hGH. Whether the EMEA will approve biosimilars for antibodies and plasma proteins remains to be seen. In the US, the only approved biosimilar is Omnitrope from NVS; Omnitrope got through the FDA due to the historical accident that the FDA regulates hGH drugs as small molecules rather than biologics.