 "An employee works at the reception area of Cipla at its headquarters in Mumbai")
Stepping up investments to tap growing opportunities in biosimilars in Europe and emerging markets, Cipla is spending about Rs 600 crore to set up a manufacturing plant for biosimilars in South Africa. While Ahmedabad-based Intas is spending $30 million (about Rs 200 crore) for research and development and trials.
The interest of domestic pharma companies in this segment is evident as biologic drugs worth $ 90 billion will go off patent in Europe and the US in the next five to ten years.
Biosimilars, which are copies of innovative biologic drugs, are also expected to receive a boost as governments in developed markets look to reduce their healthcare budgets. On the flipside, however, growing competition is leading to price erosion and margin pressure for companies.
Biosimilars are made from living cells and are far more complex and expensive to manufacture than generic drugs which are chemical compounds.
"Our current turnover from biosimilars is about $ 50 million (about Rs 330 crore). Till date we have invested $ 200 million (about Rs 1320 crore) and we will make an additional investment of $ 30 million for manufacturing, R&D and trials. We are launching two biosimilar products in India each year," said Intas Pharmaceuticals vice chairperson Binish Chudghar.
Intas launched biosimilar filgrastim used for cancer treatment in Europe last February, a first for any Indian company in that market. "We launched our first biosimilar in Europe last year and have filed for two product approvals in the US. We had an US FDA inspection in relation to the filings. We are carrying out the required trials and working hard to ensure compliance," Chudghar added.
Biocon has partnered with US drug major Mylan for co-development of six products for cancer and auto-immune disorders. "We are on track for four regulatory filings of our biosimilars in developed markets in FY17, and have already made two of these. While it is extremely difficult to predict regulatory timelines, we are confident of being among the first wave of biosimilars players to enter EU," Biocon said in an email response.
In July Biocon launched its anti diabetes insulin glargine, its first such product in Japan.
"We have invested $200 million in setting up an integrated insulins manufacturing facility in Malaysia, one of the largest in Asia. We are also investing in expanding our biologics manufacturing capacities in Bangalore. Biologics business will contribute 20% of our aspirational revenue aim of $1 billion by FY19," Biocon said.
Dr Reddy's Laboratories (DRL) which launched its first biosimilar filgrastim for domestic market in 2001 currently markets four products in India and other emerging markets . It earned $94 million from biosomilar sales in three years till 2015. Like Biocon, DRL too has taken a partnership route for developing biosimilars in developed markets and has tied up with German drug maker Merck Serono for the purpose.
Sources said DRL is planning Rs 300 crore investment over the next 3 years. The investment will largely be in the oncology space and plans include setting up General Electric-built pre-fabricated facility for biosimilars to double its manufacturing base.
DRL refused comment on specific query related to investment.
While companies like Dr Reddy's Laboratories is looking at the biosimilars space, the biggest pharmaceutical company Sun Pharmaceuticals has decided to stay cautious of the space owing to ambiguity on several grounds such as approval criteria used by the US FDA, whether the biosimilar could be a direct substitute to the biological sold by the innovator company and others.
An official in the know of matters in the company told Business Standard," Biologics is an expensive affair. One needs a separate set of sales persons for this segment. This means costs will go up dramatically. Thus, it is best we remain cautious."
"We see opportunities for Indian drug companies in biosimilars in local and emerging markets. We expect them to partner with other companies for European and the US market as R&D, manufacturing and marketing challenges are of a different magnitude," said Sujay Shetty, partner at PwC.
