Move over off-patent chemical drugs. It's the now the turn of off-patent drugs of bacterial, or mammalian, origins to attracting the attention of the pharmaceutical industry.
And we are not talking about Biocon, Avesthagen, Intas Biopharmaceuticals, and other such players, which have a long-standing traditional presence in the biopharmaceutical market.
It's the conventional generic companies such as Dr Reddy's Laboratories, Glenmark Pharma, Lupin, apart from world generic giants such as Teva and Sandoz that are eyeing the opportunity that the global market for biosimilars holds.
Biosimilars are off-patent versions of biopharma drugs. As per estimates, the global market for biosimilars is over $75 billion, which is about a tenth of the global prescription drug market of over $712 billion.
According to the US-based market research firm Decision Resources, biologics is the faster growing segment in the pharma market.
Moreover, multiple patent expiries are staring biopharma in the eye. Data points that patents on US biotech behemoth Amgen's Enbrel (used for treatment of arthritis and psoriasis), Neupogen (for neutropenia, a side effect of chemotherapy), and Epogen (for anaemia), with annual sales aggregating $7 billion are due to expire between 2012 and 2015.
While on the other hand, patents of US biotech giant Genentech's (recently acquired by Roche) — Avastin (for colorectal cancer) and Herceptin (for breast cancer), with total annual sales of approximately $3.6 billion — are due to expire between 2017 and 2019.
Thus sensing this potential, generic giant Sandoz has got three biosimilars approved in Europe–omnitrope (growth hormone), zarzio (oncology), binocrit (for anaemia).
Israeli giant Teva, which is also the world's largest generic company, has launched its biosimilar, Tevagrastim (for neutropenia), in Europe and plans to be a major player in the biosimilars' play.
Similarly, Indian generic companies are laying strong bets on churning out a biosimilars. According to an official from Hyderabad-based Dr Reddy's, which has eight biosimilars in its pipeline, the future of medicine lies in this niche area.
Rajender Kamboj, president, novel drug discovery & development at Lupin, said, "Producing biosimilars is challenging as there are chances of variations, even with identical processes. But it is a very significant area in India and will drive growth."
According to Neelima Joshi, vice-president, biological research at Glenmark Pharma, many companies in India are in the process of capability building. "The scope is high, but the regulatory component has to be addressed."
Research analysts say that the margins that biopharma products fetch are higher than chemical drugs. According to an analyst from a Mumbai based securities firm, the operating margins in biopharma are around 30-40%. "This is more than those of around 10-25% in active pharmaceutical ingredients and 15-30% in formulations–which make up chemical drugs."