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 Founded four years ago by South Korea's Samsung Group and with a
goal to be first or second to market with more than a dozen
so-called biosimilar drugs, Bioepis is fixated on speed.
"At 6 a.m. every day, before everyone arrived at the office, the
numbers would change," said Brian Min, a Bioepis vice president for
product development. "Had the ... run failed, we would have faced a
delay of a year or two."
Samsung hopes its biopharmaceuticals push, championed by group
heir-apparent Jay Y. Lee, can help offset a slowing smartphone
market at its flagship Samsung Electronics.
Medical officials and insurers in the United States and Europe hope
biosimilars - cheaper copies of complex biotech drugs - will
significantly cut healthcare costs.
Patents for more than 10 blockbuster biological drugs with combined
annual sales of $60 billion will expire in the U.S and Europe over
the next four years, according to Allied Market Research, opening a
potentially lucrative biosimilars market. Global revenue for the
biosimilar industry could balloon to $26.6 billion by 2020 from $2.6
billion in 2014.
Samsung, South Korea's biggest family-run conglomerate, is betting
with Bioepis that deep pockets and a willingness to play a long game
can put it ahead of established players. Bioepis is 91.2 percent
owned by Samsung BioLogics, a contract drug maker.
GROWING INTEREST
Novartis' Sandoz and South Korea's Celltrion have also recently
launched copies of some top-selling prescription drugs at
significant discounts.
Early this year, Bioepis was first to launch a biosimilar version of
Amgen's Enbrel in Europe, after just four years in development -
roughly twice as fast as some biosimilars take to come to market.
To quickly get up to speed in an unfamiliar industry, Samsung
enlisted drugmaker Biogen as a Bioepis shareholder, scouted industry
veterans from firms such as Novartis and Eli Lilly and surrounded
them with young recruits. It has agreements with Biogen and Merck to
sell and distribute some of its biosimilars.
Yet to turn a profit, Bioepis expects revenue of 1 trillion won
($839 million) in 2020 and plans a U.S. initial public offering,
when the time is right. For comparison, Samsung Electronics had
revenue last year of 201 trillion won.
NEED FOR SPEED
To get its biosimilars to market ahead of rivals, Bioepis is
speeding up processes it can control.
It tasked 300 researchers to run 1,500 experiments to cut down on
development time for its Enbrel copy, dedicating about 100
bioreactors to the effort. It's tough for rivals to match that scale
as pure-play biosimilar makers tend to be smaller start-ups and "big
pharma" tends to focus more on original drugs, analysts say.
"The speed means Bioepis is investing a lot of money, more than its
competitors," said Eugene Investment & Securities analyst Han
Byung-hwa.
Bioepis also took a calculated risk by scaling up to mass production
ahead of clinical trials, knowing it would make much more than
needed, which would allow it to get to market quicker following
regulatory approval.
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"As the saying goes in our industry, 'process is the product'," said
Bioepis' Min. "Equally important, process is what allows us to
shorten timeframes for almost every phase of biosimilar
development."
Bioepis' copy of Johnson & Johnson's Remicade, another rheumatoid
arthritis drug, won final European regulatory approval last month.
Celltrion won approval first, but took about seven years to get
there.
"They've got far, far more people doing the jobs that other
companies just simply don't have, so I think it's about efficiency
and resources," said Duncan Emerton, pharmaceuticals analyst at
FirstWord, about Bioepis.
NO SURE THING
Betting on biosimilars is not without risks.
Relative lack of familiarity with biosimilars among doctors and
regulators could slow adoption, Deloitte has warned, and there is no
guarantee Bioepis will get its drugs to market quickly.
"The speed of approval for one drug in one jurisdiction cannot be
assumed for any other drugs under development, or even for the same
drug in another jurisdiction," said an official at a competing
biosimilar maker who was not authorized to speak about a rival and
declined to be identified. "There are so many moving parts ... speed
is but one element."
And the price of failure can be high: Biosimilars cost $100-$200
million to develop, according to Deloitte, compared with $1-$5
million for generic chemical drugs.
Big pharma, too, is flexing its muscles.
Sandoz generated $772 million from biopharmaceuticals last year,
including biosimilars, and competes with Bioepis on several
products. Pfizer paid $16 billion for Hospira, in part to bolster
its biosimilars business.
"The biopharma business requires continuous large-scale investment.
Even if there are no short-term results and investment is
burdensome, Samsung needs to look at the big picture and continue
investing in order to succeed," said Han at Eugene Investment &
Securities.
(Reporting by Se Young Lee and Joyce Lee, with additional reporting
and editing by Tony Munroe; Editing by Ian Geoghegan)
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