Generic Drugs (Biogenerics and Biosimilars)

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This article describes a concept which could impact a variety of companies and industries. The article lists companies that could benefit or be harmed by the trend. To see what companies and articles reference this concept page, click here.

For information on traditional small-molecule generic drugs, see Generic Drugs (Small Molecule).

In the U.S., there is no formal procedure for the testing and approval of generic biologics. Due to the exponentially more complicated nature of biologic drugs as compared to traditional small-molecule medicines, even the smallest variation in the manufacturing process can produce toxic results, as seen in the Amgen/Johnson & Johnson Procrit ordeal. Biotech companies are quick to point this out, citing the complexity of biologics as a reason why generic versions are unfeasible. Nonetheless, there is mounting political pressure to develop a path to approval for biogenerics and biosimilars, as evidenced by a recent bill passed by a Senate committee.

European regulatory agencies have been quicker to respond to the question of generic biologics, issuing a set of guidelines for the approval of biosimilars. This could pressure the U.S. FDA to follow suit and establish its own approval process for generic biologics, but this is yet to be seen. The process outlined by the European Medicines Agency (EMEA) is hardly a breeze, however. Whereas traditional small-molecule generics can be brought to market quickly and at minimal cost, generic biologics require a minimum of two clinical trials and extensive testing for toxic side effects. This makes the approval process for biosimilars nearly as rigorous and expensive as the approval process for new biologics, which could discourage some companies from entering the generic biopharmaceutical market. These more strict regulatory guidelines would likely cut down on the cutthroat pricing and intense competition found in the traditional generic drug market. Also, by imposing stringent rules for approval, the biosimilar market is likely to be limited to large, mature companies who have the resources to see the process through.

Biogenerics

• Momenta Pharmaceuticals (MNTA) is a biotechnology company that specializes in the production of biogenerics. Momenta is heavily invested in biogenerics and could see tremendous growth if the FDA establishes an approval process for generic biologics. If biogenerics never take off, however, Momenta would be left with very few viable sources of revenue.
• Teva Pharmaceutical Industries (TEVA) is a leading driver of the development of biogeneric/biosimilar products. In recent years, it has acquired a number of smaller firms that specialize in biotechnology. By combining their expertise with Teva's resources, the company hopes to be among the first to venture into the generic biologics market.
• Sandoz and Barr are also acquiring biotech companies and increasing their ability to produce biosimilars. These two companies are generally known as feisty litigators, with Sandoz suing the FDA for delaying a decision on its biogeneric form of human growth hormone.
• Dr. Reddy's Laboratories (RDY) has begun building the necessary infrastructure (fermentation tanks, warehousing, etc.) for biogenerics production. While the India-based company only entered the generics market in 2006/2007, it did so in a big way with numerous acquisitions. Soaring revenues have allowed Dr. Reddy's to invest a great deal in biogenerics research for when these drugs come off patent between 2010 and 2015.

Biopharmaceutical companies

Among the leading figures in the biopharmaceutical industry are:

• Amgen (AMGN)
  • Products include: Aranesp, Neupogen, Neulasta, Epogen
• Biogen Idec (BIIB)
  • Products include: Rituxan, Avonex, Tysabri
• Genzyme (GENZ)
  • Products include: Cerezyme, Myozyme, and Fabrazyme
• ImClone Systems (IMCL)
  • Products include: Erbitux
• Genentech (DNA)
  • Products include: Avastin, Herceptin, Rituxan, Tarceva