India’s Surging Biosimilar Industry Looks Abroad

With multiple biosimilars introduced and several in the pipeline, India’s biosimilars segment is expected to touch $1.4 billion in 2016, growing at a rate of 30 per year, according to a recent report by an industry association.

Despite this expected high rate of growth, the sector faces several challenges including limited penetration of biosimilars in India and a nascent ecosystem for contract research organizations (CROs) and contract manufacturing organizations (CMOs).

Nevertheless, the immuno-oncology space is emerging as a high-demand treatment area for biosimilars, according to the report released by India’s Junior Minister for Chemicals and Fertilisers, Hansraj Gangaram Ahir. The report was prepared by the Associated Chambers of Commerce and Industry of India (Assocham) and Satguru Management Consultants.

Leading Indian generics companies are aspiring to extend the global presence they have acquired based on the development and manufacturing of generics by moving beyond small molecules to include peptides and biosimilars, more so in view of the increasing share of peptides and biologics in new products approval globally, according to the report. A generics and API manufacturing powerhouse, it will be interesting to see if India can replicate that success in biosimilars.

“There has been a great surge in biosimilars in the country, initially for our own market,” Ajay Bharadwaj, CEO of Bangalore-based CRO Anthem Biosciences Private Ltd., said during Hyderabad’s BioAsia 2016 conference in February. Anthem now has a biopharma division focused on biosimilars.

India can have the “first mover advantage” or “early mover advantage: if it invests early in research and development of biosimilars,” said Satakarni Makkapati, president for biologics at Aurobindo Pharmaceutical Ltd., of Hyderabad.

The Assocham report also pointed out that several Indian firms have made significant investments in biosimilars and are building strong pipelines with an eye on India and global markets. These include Dr. Reddy’s Laboratories Ltd., of Hyderabad, Intas Pharmaceuticals Ltd., of Ahmedabad, Biocon Ltd., of Bangalore, Zydus Cadilla, of Ahmedabad, Torrent Pharmaceuticals Ltd. and Aurobindo Pharmaceuticals Ltd., of Hyderabad, and Lupin Ltd., of Mumbai.

Monoclonal antibodies tend to dominate the pipelines of those companies, with cancer as a key focus area. Additionally, small- and medium-sized companies are targeting amino acids and biosimilars APIs for Indian and unregulated markets.

“Making peptides and amino acids requires chemical synthesis, which is a comfort zone for India which has been traditionally strong in chemistry,” Pushpa Vijayaraghavan, vice president of Sathguru Consultants said.

Indian companies should focus on next-generation biosimilars as the market for the first-generation biosimilars is almost saturated, she said.

But these companies also have to deal with the challenges of dearth of expertise in India in biologics and peptide synthesis; regulatory uncertainty; negligent capability of CROs and CMOs in this sector; and the high cost of clinical validation that serves as a deterrent to most companies.

Despite the recent introduction of coherent biosimilar development guidelines, a coherent and streamlined mechanism for approval of biosimilars is still evolving in India, as is also the case globally, the report stated.

In the related vaccines segment, Indian companies are doing much better, with one in three vaccines across the world being made by Indian companies. Having successfully tapped the public health supply market, such as through the Global Alliance for Vaccines Initiative (GAVI), the World Health Organization (WHO) and PAHO, Indian vaccine manufacturers are looking to supply the rest-of-the-world (non-GAVI) markets.

Upbeat Outlook for Overall Pharma Growth

The overall Indian pharmaceutical market has been growing at a compounded annual growth rate (CAGR) of 17.6 percent to $30 billion in 2015 and could be worth $55 billion by 2020.

About 70 percent of this market consists of generics drugs, 21 percent is accounted for by drugs that can be sold over-the-counter and the remaining 9 percent are patented drugs.

Anti-infectives, cardiovascular system products and gastrointestinal drugs dominate the market with a 40 percent combined share in 2015. The anti-diabetic, respiratory and urology segments also grew significantly at 32.9, 27.8 and 29.5 percent, respectively.

Analysts expect a significant continued growth in these segments over the next five years, along with growth in skin, gastrointestinal and cardiovascular segments.

An emerging segment is immuno-oncology, with the development of several biosimilars and new chemical entities.

The report stated that exports were a major driver for the growth of domestic pharmaceutical companies, accounting for $15.33 billion of industry revenue.

Globally, India is the largest supplier of generics drugs, accounting for a fifth of the world’s generic drugs exports in terms of volume.

Penetration of Indian products into other regulated and semi-regulated markets has also increased due to cost advantages of manufacturing in India. Exports in the financial year 2015 to countries such as Brazil, Kenya, Myanmar, Thailand, Turkey and Venezuela recorded a 15 percent rise over the figures in FY 2014.

On the active pharmaceutical ingredients (API) front, India’s exports to regulated markets formed roughly 48 percent of its total API exports, of which 29 percent of the exports were to generics makers and 19 percent to on-patent innovator formulators. The country’s share of the global market stands at 7.2 percent.

While in the formulations sector, with a domestic market valued at $11.2 billion in 2016, the sector is expected to grow above 10 percent in the next five years. India’s share in the global market of formulations is 14 percent.