[Newsmaker] Korean biosimilar drugs on way to global expansion

Led by Celltrion and Samsung Bioepis, South Korea’s biopharmaceutical companies are making strides in the emerging drug category of biosimilars -- lower-cost replications of the world’s top-selling biologic drugs that have lost patent protection.

Drawing much spotlight this week, Samsung Bioepis, Samsung Group’s biopharmaceutical affiliate, said Sunday that Benepali, its biosimilar copy of Amgen’s blockbuster rheumatoid arthritis treatment Enbrel (etanercept) has been granted sales approval in Europe.

A day later, Celltrion announced that the U.S. Food and Drug Administration is scheduled to convene a committee meeting early next month to review and discuss approving Remsima, its self-developed Remicade (infliximab) biosimilar, in the United States.

The news prompted Celltrion’s market value on the secondary Korean bourse to surpass the 13 trillion mark ($10.7 billion) for the first time on Monday, while its stock price jumped by 17.64 percent from the previous day.

As evidenced by the active market response to the recent developments, Korea’s two leading biosimilar developers are geared to shake up the global biopharmaceutical market long dominated by big-name drugmakers like Roche, Pfizer, AbbVie and Johnson & Johnson, which have maintained a monopoly on high-priced biotech drugs till now.

Biosimilars are cheaper, near-replicas of brand-name biologics which are able to deliver similar therapeutic effects. Composed of living cells and able to treat a wider variety of ailments, biologics are more difficult to develop and replicate than simpler, chemically-synthesized drugs.

A number of companies around the world, including Samsung Bioepis and Celltrion as well as big-name pharma giants, have jumped into this newly-emerging segment, seeking high growth potential and profits.

Samsung’s Benepali is the first Enbrel biosimilar ever to be approved in the European Union. Enbrel, an arthritis and autoimmune disease treatment marketed by Pfizer in Europe, accounts for approximately $10 billion of all biologics sold in the region.

Benepali, expected to be around 30 percent less expensive than the original, is positioned to steal a significant portion of Pfizer’s monopoly in Europe, as has been the case when biosimilars enter a new market.

Though another Enbrel biosimilar developed by Novartis affiliate Sandoz is nearing European approval, Samsung Bioepis and its regional marketing partner Biogen are expected to launch their drug in the EU first, gaining a competitive advantage.

Sandoz reportedly submitted its own biosimilar version of Enbrel for review and approval to the European Medicine Agency in December 2015.

Meanwhile, Celltrion, which has been selling its Remicade biosimilar under the name Inflectra across Europe since February 2015, is set to break into U.S. markets in the near future as the FDA kicks off its review process on Feb. 9.

Remicade is Johnson & Johnson’s top-selling biologic drug for immune system disorders including arthritis and Crohn’s disease.

A positive recommendation delivered in this stage is typically followed by subsequent legal approval weeks later. If approved, Celltrion’s biosimilar would mark the introduction of a Remicade biosimilar to U.S. market for the first time.

“The U.S. accounts for roughly 54.5 percent of Remicade’s global market valued at roughly 10 trillion won,” said HI Investment Securities analyst Koo Wan-sung on Monday, crediting significance to Celltrion’s foreseen opening of the U.S. market.

“Unless any specific issue emerges, Remsima will mostly likely be launched in the U.S. later this year and exclusively lead the country’s Remicade biosimilar segment for two years led by Celltrion’s marketing partner Pfizer,” Koo said.

Though J&J’s U.S. patent on Remicade was due to expire in September 2018, the patent office recently rejected it after a reexamination, a decision which the pharma giant has appealed.

The foreseen introduction of Remsima, up to 40 percent cheaper than the original, in the U.S. is forecast to dramatically impact the sales of original Remicade in the country.

After Celltrion’s Remicade biosimilar was approved in Europe in February 2015, Johnson & Johnson saw its second-quarter sales of Remicade outside the U.S. fall to $580 million last year, compared to $783 million a year earlier.

Merck, which handles the marketing of Remicade in Europe, also saw the drug’s sales decline by around 25 percent to $455 million in the second quarter, as more European doctors reportedly chose to prescribe the cheaper version of the drug.

In the years ahead, biosimilars are forecast to expand and form a multibillion-dollar industry, prompting continued R&D and investment into the segment from drug developers from around the world, including Korea.

Citigroup analyst Andrew Baum predicted last year that, “(Original drug developers) will likely lose an aggregate $360 billion in revenue over the next 10 years, with roughly $110 billion captured by biosimilar sponsors,” generating about $50 billion in savings for health care systems.

In addition to Benepali, Samsung Bioepis is currently developing five other biosimilars which reference some of the world’s top-selling biologics including Remicade, Humira, Herceptin and Avastin. Samsung Bioepis has also invested in a Lantus biosimilar under development by Merck Co.

Celltrion is also developing biosimilar replications of Genentech's Rituxan (rituximab), used to treat lymphatic cancer, and Roche's blockbuster breast cancer treatment Herceptin (trastuzumab).

By Sohn Ji-young (jys@heraldcorp.com)