BIOSIMILARS....OPPORTUNITY UNFOLDING...!!!

Biosimilars are the next big thing for Indian pharma
By: Pallavi Ail | Mumbai | December 27, 2014 1:31 amWhile the US is still ironing out its rules governing generic equivalents of biologic drugs, also known as biosimilars, the Indian market has witnessed nearly 20% annual growth for the year ending November 2014 in the segment.Biologics are drugs whose active ingredients are sourced from living organisms so these products are based on proteins, genes, etc, unlike normal small-molecule drugs where the active ingredient is a chemical.Due to this complex base, biologics are not as easily copied as other drugs and companies that are leading such research in India are the top pharmaceutical firms such as Biocon, Dr Reddy’s,  Lupin and Cadila Healthcare.A recent HSBC report says that biosimilar sales grew 20% annually to Rs 2,000 crore or approximately 2.5% of overall market sales at the end of November 2014. Sales margins on biosimilar drugs range from 20% to 80%, according to analysts. On the other hand, almost 90% to 95% of the innovator price of a drug is eroded when a generic version of a small-molecule drug is launched.With the US drug patent pipeline drying up, it is the high-margin biologics that will sustain sales for Indian companies,  analysts.On December 9, the BSE-listed Cadila announced the launch of a copycat version of AbbVie’s blockbuster biologic, Humira, which targets autoimmune disorders such as rheumatoid arthritis. The drug is touted as world’s top-selling drug with global sales exceeding Rs 1,000 crore in CY13, according to the HSBC report. The biosimilar, named Exemptia, will be marketed as a 40 mg injection administered once every alternate week and launched at one-fifth of Humira’s price of approximately $1,000 per injection.Similarly, in April 2013, Cipla started selling a biosimilar of the rheumatoid arthritis drug Enbrel with a launch price of $100. The price of the drug from the innovator, Amgen, was $133.Biocon’s CANMab, a breast cancer therapy that is a generic of Roche’s Herceptin, was launched in February 2014 with a 25% discount to the innovator price.“While we are excited with novel launches even in emerging markets given better pricing, we believe a significant contribution is far away as the market is still at nascent stage in accepting newer better forms of treatments coming at higher costs,” HSBC analysts wrote.Dr Reddy’s, especially, has the most exposure to biosimilars with approximately 7% or Rs 110 crore of its FY14 India sales originating from biosimilars compared with 3.7% for Cadila and less than 1% for Lupin and Cipla, according to HSBC analysts. “Dr Reddy’s is upping the ante on investing in complex generics as well as more risky areas involving biosimilars and proprietary products,” IDFC analysts wrote in a note dated October 29. “While limited visibility on value unlocking from the aggressive R&D investments in these spaces is a challenge, we see significant value creation possibilities given Dr Reddy’s proven capabilities in these high potential areas.”The European Medicines Agency has approved seven types of biosimilars from 2009 till date, according to data available on its website. None of the companies listed are Indian. In 2014, it approved the a single biosimilar: Sanofi’s insulin glargine therapy for diabetics named Lantus. The US Food and Drug Administration is yet to approve any biosimilar. “Material entry in regulated markets (US, EU) is still 4-5 years away as per our understanding,” HSBC analysts wrote.http://www.financialexpress.com/article/economy/biosimilars-are-the-next-big-thing-for-indian-pharma/23516/