Litigation and Manufacturing Hurdles Block US Biosimilars Market Success

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Pfenex is making a name for itself in the news headlines as of late. The company’s CEO, Bert Liang-who is also chair of the Biosimilars Council, a division of the Generic Pharmaceuticals Association (GPhA)-has been an outspoken opponent of the Centers for Medicare & Medicaid’s (CMS) proposal to assign common Healthcare Common Procedure Coding System (HCPCS) J-codes to all biosimilars for a given innovator product, saying that linking reimbursement for all biosimilars under the same separate code from the reference product is “illogical”. Liang has said in media reports that the current CMS proposal is not in accordance with the Biologics Price Competition and Innovation Act (BPCIA) as it was originally written and argues that the current reimbursement decision from CMS for Medicare Part B drugs would hinder biosimilar uptake (1).

While biosimilars to a common reference product may not clinically be analogous, CMS believes that, for payment policy purposes, biosimilars can and should be treated like generics. The agency notes it did not consider any special circumstances with the products when making this conclusion. Plainly stated, “CMS’ proposals and related discussion about how biosimilar product ASPs [average sales prices] would be grouped did not encompass clinical interchangeability, substitution of biosimilar products, or clinical decision making when prescribing these products” (2). Should future changes occur-such as the commencement of the use of interchangability status designations-CMS notes that the “proposed revised regulation text would not preclude CMS from separating some, or all, of a group of biosimilars for payment (and the creation of one or more separate HCPCS codes).”

The US Federal Trade Commission (FTC) also recently weighed in about biosimilar policy, specifically on the issue of biosimilar naming (3). The FTC says the addition of a suffix to a nonproprietary name (as is proposed by the US Food and Drug Administration) may lead physicians to conclude the naming differences equate to clinically meaningful differences. The FTC adds that FDA’s naming scheme conflicts with the World Health Organization’s (WHO’s) proposal to employ biological qualifiers, hence, FDA’s proposal “risks undermining international harmonization efforts.” Additionally, FDA’s proposed naming convention would, according to FTC, hinder price competition, and price competition is a necessary element of patient access to and uptake of biosimilar products.

Biosimilar manufacturers like Pfenex have skin in the game when it comes to crucial naming and payment decisions, as the biologics company is developing a number of biosimilar products, with one of its most prominent being its biosimilar to Lucentis (ranibizumab injection). Pfenex’s product candidate, PF582, is licensed to Hospira (now Pfizer) and is in Phase I studies. Aside from pricing and naming issues, manufacturers of biosimilars will also face significant hurdles when it comes to intellectual property-although Phase III trials for PF582 are due to commence in 2016, the patents for Lucentis do not begin to expire until 2019. In addition, according to analysts at Evercore ISI, Pfenex also faces first-to-market competition with Formycon, which announced in October 2015 that it began Phase III trials for its own Lucentis biosimilar.

Pharmaceutical Technology Europe interviewed Liang to learn more about Pfenex’s development strategy and how the company’s expression technology platform for recombinant protein production could give the company a manufacturing competitive advantage over other biosimilar sponsors. 

Regulatory guidancePTE: Prior to the interest in the development of biosimilars for Lucentis, some physicians have used Avastin off-label to treat age-related macular degeneration, the main indication of Lucentis. What is Pfenex’s view on the off-label use of Avastin as a more affordable substitute for Lucentis?

Liang: With the current draft guidance from the US FDA, compounded products that are biologics will need to be used within five days after compounding. The process of compounding is required to be performed in strict accordance with cGMP requirements. This includes specific testing for purity and sterility. As a result, those companies that compound products will need to evaluate if it is within their business model to continue such activities within the biologics realm.

PTE: Is the assignment of an interchangeability status a real possibility within the next 10 years? What additional evidence does Pfenex think will be required by FDA to call a product interchangeable?

Liang: It has been noted by FDA that switching studies may be required for the development of interchangeable biosimilars. Our understanding is that draft guidance on this important issue will likely be released by the end of 2015.

PipelinePTE: You have mentioned in previous interviews that Hospira is a good partner for Pfenex because of Hospira’s strong legal infrastructure. Will this type of protection be increasingly important for biosimilar manufacturers? What kind of specific protections can a company like Hospira offer?

Liang: We have a partnership with Hospira, now Pfizer, which will control the clinical studies of PF582, our biosimilar candidate to Lucentis. The partnership is overseen by an executive steering committee, with equal representation of both companies, although our partner will control the execution of the clinical study. 

As has been seen in the variety of cases filed by reference product sponsors, clarification of the BPCIA will require litigation for interpretation of the statute. Companies like Hospira, now Pfizer, which has extensive experience in biosimilars, as well as in generics, provide an experience base to move the programs forward [through litigation] in such a milieu.

PTE: Can you discuss some of your other biosimilar development projects (partners, targets, etc.)?  

Liang: We have a total of 12 programs in our pipeline. The most advanced programs-in addition to PF582, a biosimilar candidate to Lucentis-include PF530, a biosimilar candidate to Betaseron (interferon beta-1b); PF708, a generic candidate to Forteo (teriparatide [rDNA origin] injection); and PF529, a biosimilar candidate to Neulasta (pegfilgrastim). In addition, we recently received a contract from the Biomedical Advanced Research and Development Authority (BARDA) of up to $143.5 million to develop the next-generation anthrax vaccine. This is a recombinantly produced vaccine that has the potential to fulfill the Strategic National Stockpile of 75 million doses, which has been articulated by the government as a targeted need to ensure biodefense preparedness.

New technology platform PTE: How is the Pfenex Expression Technology platform unique compared with other available platforms on the market?

Liang: The Pfenex Expression Technology is a high-throughput, robotically enabled parallel process that allows us to obtain a production strain in nine weeks, compared with up to a year or longer in traditional settings. This strain is produced at launch scale, which creates savings on real and opportunity costs in strain development. Integrated into this strain development technology is a world-class bioanalytical capability built by the Dow Chemical Company, [which was developed] when Pfenex was part of that firm. This combination of accelerated expression and bioanalytics allows us to create biosimilar product candidates with low costs and demonstrate high quality that satisfies regulatory body concerns about quality and similarity.

PTE: Your bacterial expression system in Pseudomonas fluorescens produces higher yields than traditional Escherichia coli expression. Could the high yield produced upstream in P. fluorescens create a downstream product purification bottleneck?

Liang: The Pfenex Expression Technology and downstream purification has been developed over the past 15 years and has been tech-transferred to all major CMOs [contract manufacturing organizations]-as well as client sites-without difficulty. Given the fact that every one of our biosimilar products is expressed soluble and properly folded, we avoid the entire refold step. The removal of these unit operations enables a more streamlined production process, increases overall yield, and avoids significant costs driven by raw materials and subsequent waste streams.

References
1. Pfenex, “Statement on Final Coding Rule for Biosimilar Reimbursement under
Medicare Part B,” Press Release, www.pfenex.com/statement-on-finalcodingrule-for-biosimilar-reimbursement-undermedicare-part-b/, accessed 3 Nov., 2015.
2. Federal Register, “Medicare Program: Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for CY 2016,” https://federalregister.gov/a/2015-28005, accessed 9 Nov., 2015, prior to the official publication date of Nov. 16, 2015 (file date 30 Oct., 2015).
3. The Federal Trade Commission, comment in response to FDA’s Guidance for Industry, Nonproprietary Naming of Biological Products, www.ftc.gov/system/files/documents/advocacy_documents/ftc-staffcomment-submitted-food-drug-administration-response-fdas-request-comments-its-guidance/151028fdabiosimilar.pdf, submitted on 27 Oct., 2015.