BioProcess Insider for October

Launched in June 2018, the BioProcess Insider digital information portal delivers the latest financial and business news and expert insider views influencing the commercialization of biopharmaceuticals. Here are just a few recent stories edited for our space limitations in print. For more discussion and in-depth analysis, check out the website at www.bioprocessinsider.com. Every edition provides expert and insider perspectives on current financial movements and deal-making; the newest technology purchases and capacity investments; regulations affecting the bioprocessing sector; global market actions and reactions; and industry trends.

Originators Rebuff Pfizer Claims of Misleading Biosimilar Talk

Accusing Amgen, Johnson & Johnson (J&J), and Roche of sending misleading communications about biosimilars, Pfizer is asking the US FDA to issue guidance on such behavior. In a Citizen Petition published on 22 August 2018, Pfizer said that communication tools intended to incentivize the adoption of and switching to biosimilars have led to a robust uptake of biosimilars in Europe, but that in the United States “payer reimbursement policies are in fact impeding adoption of biosimilars.”

The company continued: “Dissemination of false or misleading information about the safety or efficacy of biosimilars, whether to patients and prescribers or directly to payers, has the potential to affect payer decisions about biosimilar reimbursement, as well as patient and healthcare professional confidence in biosimilars.” Pfizer requests official guidance to ensure “truthful and nonmisleading communications by sponsors concerning the safety and effectiveness of biosimilars, including interchangeable biologics, relative to reference product(s),” despite that being out of the FDA’s remit.

The agency has approved only 12 biosimilar medicines, with just a few of those having reached the market. Initial sales have been disappointing. A third of those US approvals are marketed by Pfizer: versions of J&J’s Remicade (infliximab) and Amgen’s Epogen (epoetin alfa) and Neupogen (filgrastim). The company has three more biosimilars currently in phase 3 trials, including versions of Roche/Genentech bestsellers Avastin (bevacizumab) and Rituxan (rituximab).

Accusations: Within its petition, Pfizer cited examples of biologic makers spreading false and misleading information about biosimilars through the creation by reference-product sponsors of “physician- and patient-directed materials that mischaracterize important elements of the biosimilar criteria and create doubt and confusion about the safety and efficacy of biosimilars.”

Genentech’s “Examine Biosimilars” website was one example Pfizer said failed to state that an approved biosimilar must have no clinically meaningful differences from its reference product. Genentech’s parent company Roche is reviewing the petition. “We have long-supported the FDA’s efforts to implement a science-based pathway for the approval of biosimilars,” spokesperson Anja von Treskow told BP Insider.

Highly Similar, Highly Complex: Pfizer also pointed out J&J subsidiary Janssen Biotech (which markets Remicade) for its patient brochure, Finely Tuned: Your Treatment, Your Choice. Pfizer said the company deliberately confused the fact that a biosimilar has the same mechanism of action as its reference biologic.

But Linda Davis, a spokesperson from Janssen Immunology, told us that “Remicade is a complex biologic medicine that cannot be copied exactly, and biosimilars are highly similar but not the same as the innovator. Approval as a biosimilar alone does not mean the product will have the same efficacy and safety in any given patient. According to the FDA, interchangeability has additional requirements of approval compared to biosimilarity, and to date there are no approved interchangeable biosimilars to Remicade.”

In response to Pfizer’s allegations, she said, “The treatment decision resides between a physician and a patient; the Finely Tuned campaign encourages stable patients taking biologics to talk with their doctors and to have a voice in their own treatment decisions.”

The Proprietary Name Game: Amgen, a company that itself has a strong biosimilar portfolio, was accused of similar messaging in a YouTube video about the importance of naming conventions and identifiers for biosimilars. The video says that switching biologics “carries risks, given that no two biologic medicines are identical, and thus can behave differently in the body. Switching drugs is not a good idea if your medicine is working for you,” something Pfizer said implies that switching generally is risky and thus undermines efforts to promote biosimilar use.

In response, Amgen told us that it “is committed to educational communication of factual, balanced information regarding biosimilars and their use,” and that it believes that “such communications help build the confidence necessary to ensure biosimilar uptake.” The company says it has developed “scientifically accurate materials to help foster understanding of, and interest and confidence in, the adoption and utilization of biosimilars,” citing as an example an educational campaign to educate physicians and pharmacists who will prescribe and dispense biological products (including biosimilars) on the importance and appropriate use of the suffix, following FDA guidance on nonproprietary naming.

“Note Pfizer’s comments to the FDA draft guidance on nonproprietary naming,” Amgen said. “They explicitly supported the use of distinguishable suffixes to facilitate pharmacovigilance and inadvertent substitution.”

Catalent Clears Up FDA 483 Concerns at Its Indiana Plant

Following an inspection in April and May this year, the FDA published a Form 483 issued to Catalent’s biomanufacturing facility in Bloomington, IN. The agency made five observations at the 875,000-ft² production and fill–finish facility, which the contract development and manufacturing organization (CDMO) took over as part of its US$950 million (€810 million) acquisition of Cook Pharmica last year. The inspector observed “an unacceptably high number of mold recoveries used in the classified rooms” used for the manufacture of an undisclosed bulk drug substance. Other observations included issues with written procedures to prevent contamination, a lack of quality oversight in the review of records and procedures followed in drug substance manufacture, inadequate procedures in place to avoid deviations from reoccurring, and insufficient controls to prevent unauthorized changes to data stored on the company’s analytical chromatography computer system.

Second Inspection: Those concerns all have been remediated since then, a Catalent spokesperson told BP Insider. “All observations identified during the FDA preapproval inspection in April–May 2018 have been addressed, and corrective actions have been implemented,” we were told. “Most of the items noted were self-identified by Catalent, and a corrective and preventive action plan (CAPA) was in place prior to the inspection.”

Business was not affected as a result of the findings from that inspection. Furthermore, a successful follow-up FDA audit already has taken place at the plant. “Catalent remains confident in the robustness of the quality systems and inspection history at our Bloomington, IN, site — as evidenced by a more recent FDA inspection with zero observations.”

Eli Lilly: Balance Science with Shareholders in Mergers and Acquisitions

Many early phase acquisitions do not make sense for shareholders despite the presence of promising assets, says Eli Lilly’s chief financial officer, Joshua Smiley. Speaking at a Morgan Stanley Healthcare Conference Broker Conference Call in September, he said his company is “interested in doing early stage clinical deals where we see compelling scientific rationale in our key therapeutic areas and that we can upgrade our pipeline.” Such deals also need to create shareholder value, he continued, and with current market prices there are plenty of acquisition targets that do not do so.

“We find something that’s really exciting scientifically in oncology or immunology or diabetes, and we think we can add a lot of value to that product through our own development or commercialization,” he explained about troubles encountered. “But the price, the market value of the company, or what the founders want in terms of an asset price, doesn’t. It may make sense for the asset itself, but it doesn’t make sense for our shareholders. We can’t create value after we pay that acquisition price.”

Smiley added, “Our goal is for our clinical portfolio at any given time to have at least a third of those assets sourced externally. We’d like to increase the volume in terms of deals we do, but we’re not going to do deals that we don’t think financially makes sense for shareholders.”

A Reasonable Bet: In June, Lilly completed acquisition of immuno-oncology company ARMO BioSciences for about $1.6 billion (€1.4 billion). That deal included phase 3 pancreatic cancer candidate pegilodecakin (a PEGylated interleukin) along with a pipeline of proprietary programs designed to induce the immune system of cancer patients to recognize and eradicate tumors.

Smiley said ARMO brings a robust pipeline of products and appeals to shareholders. “That was a reasonable bet to make, and if we see some success based on the data that we’ve seen so far, we think there’s a heck of a lot more value that can be created in this scenario of success.” He explained that not many assets with the same kind of probabilities are priced for success. He also cited the recent acquisition of AurKa Pharma and investment in CureVac as examples of the sort of assets that work from both the science and the shareholder points of view.

Samsung BioLogics Poised to Enter the Cell Therapy Space

After building three large-scale biomanufacturing plants, CDMO Samsung BioLogics has told BP Insider that it is adding single-use capacity and considering expanding into stem-cell therapy services. It has been nine years since Samsung entered the third-party biomanufacturing space, in which time it has brought two commercial facilities online and expects a third to be fully validated by the end of this year. When operational, the site in Incheon, South Korea, will boast 362,000 L of stainless steel capacity.

At the BioProcess International Conference and Exhibition in Boston, the CDMO told us it is considering some smaller scale investments — at least in terms of capacity — in response to customer demands.

Cell Therapy: Eun Young Yang, head of Samsung’s CDO business development team, told us that the company is “seriously considering” the cell therapy space. Although the decision to enter it is not fully set in stone, the company has moved beyond early discussions and could venture into this market within the next few months — encouraged by demand from an unnamed client.

“Our CEO has said that stem cells are the next big field,” she said, “so we intend to expand a lot in that direction” probably beginning by the end of 2018. Once a decision to move forward is taken, Samsung BioLogics will focus on “off-the-shelf” allogeneic cell therapy products because “if these are successful then they will require bigger capacity [than autologous products],” something this CDMO has plenty of.

“We need to invest both in staff and technology,” said Yang. “Stem cells are unique in terms of technology and experience needed.” More than 850 companies worldwide are reportedly developing regenerative medicines, with more than 900 clinical trials under way. Lonza, Fujifilm Diosynth, and WuXi Apptec already have expanded their services to feed the growing demand.

Single-Use Swing: So far, Samsung BioLogics has built facilities centered on stainless steel bioreactors. One plant at the Incheon site has 30,000 L of capacity from six 5,000-L tanks, and another offers 150,000 L of capacity through 10 15,000-L fermentors and two 1,000-L units for clinical manufacturing (all stainless steel). The third facility — completed in November 2017 and expected to be fully validated soon — has 180,000 L of capacity from a dozen 15,000-L tanks.

But now the company plans to install two 1,000-L single-use systems in its second plant for phase 1–2 client projects. “These will be ready from November 2019,” said Yang, who added that these facilities will be strictly for clinical manufacture before scaling up to larger stainless steel operations. However, the company is evaluating whether to make the move into single-use technologies for commercial production in the future.

Worldwide, she pointed out, such technologies make up only ~10% of total capacity for large-volume goods but 50% of that for lower-volume products (in the 500-L to 2,000-L range). Samsung analysis shows that it makes commercial sense to use disposables only for products with volumes under 8,000 L/year. The company has not yet determined which single-use bioreactors to install, but has narrowed its choices down to systems from GE Healthcare and MilliporeSigma.

Cell Line Development: The expansion of clinical services is part of Samsung’s push to become a one-stop provider of biologics services. This comes six months after the company announced a move into cell-line development. While using MilliporeSigma’s CHOZN GS Chinese hamster ovary (CHO) cell expression system, Samsung is developing its own cell lines. Yang said that five customers already are taking advantage of these services: two in South Korea and three in the United States.