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calling card since it was founded in 2001 has been its technology that enables it to control the structure of its biotech drugs, specifically sugar chains on protein drugs. More recently, Waltham, MA-based Synageva BioPharma has raised more than $63 million in venture and private equity dollars to develop both novel and biogeneric drugs based on a proprietary process involving the production of therapeutic proteins in egg whites.
As for Biogen, I caught up with the company’s executive vice president of corporate and business development, Michael Lytton, after he spoke at the Convergence conference on June 12 in Newport. Lytton, a former venture capitalist at Oxford Bioscience Partners, gave some interesting insights on issues related to biogenerics—or as he calls them, biosimilars—but he declined to discuss Biogen’s corporate strategy on this front.
A key point that Lytton made, and which has come up previously in discussions on this topic, is that the competition in the biogenerics business is likely to be different than competition in the generic drugs business. For one, biogenerics may not be that much cheaper than the originals, due in part to the high manufacturing costs, meaning that knockoffs may need to have better safety or other traits to be competitive with the originals. This would be unlike the generic drug business, which relies almost entirely on the lower cost of its products to compete.
“One really key question is what will be the pricing, and what will be the factors that companies compete on,” Lytton said. “I certainly think it will be more than price, but it’s unclear exactly what will be the competitive dynamic.”
For insights into the latest chapter of the debate, read the Federal Trade Commission’s controversial report on biosimilars and how they should be regulated. The FTC, importantly, recommended that the government not grant biotech companies 12 to 14 years of exclusivity on each biotech drug, a requested period during which the FDA would not be able to approve biogeneric versions of the treatments. Here is a link to the Biotechnology Industry Organization’s rebuttal, which says that 12 to 14 years of exclusivity would be needed to recoup a company’s investment to develop the original.
It’s difficult to pin down reliable market figures on the potential size of the annual biogenerics business, due in part to looming questions about how the U.S. government will ultimately regulate the approval of biogenerics. Yet it’s likely to be a multibillion-dollar market opportunity in the coming years, based on the thinking that many biogenerics could command a price close to the originals, and also that so many biotech drugs are due to lose patent exclusivity over the next several years.
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