HONG KONG – A move by a Chinese biotech conglomerate to build a biosimilars manufacturing facility could mark a step forward in the development of the market.

Walvax Biotechnology Co.'s biosimilar subsidiary, Genor Biopharma Co., plans to invest ¥250 million (US$40 million) to build a biosimilars plant in Yunnan Province as part of a move to industrialize its biosimilar candidates, trastuzumab and infliximab.

"Genor's biosimilar trastuzumab and infliximab have all been approved for clinical trials by the China Food and Drug Administration [CFDA]," according to Walvax, adding that the facility in Yunnan Yuxi vaccine industrial park will help "speed up and realize the seamless connection between R&D and industrialization of the two products."

China's biosimilars market is moving toward greater industrialization as more companies start producing them. China is stepping up production as countries in Southeast Asia deal with issues of affordability in their own biosimilars markets.

It will take Genor two years to set up the plant, install and adjust the necessary equipment. The factory base will use an existing factory building in the vaccine park equipped with new equipment. The plant will be able to produce 360,000 units of biosimilar trastuzumab and 400,000 units of biosimilar infliximab per year.

Both of Genor's biosimilars are monoclonal antibodies (MAbs). The biosimilar version of Roche AG's Herceptin (trastuzumab) aims at HER2-positive breast cancer while biosimilar Remicade (infliximab, Johnson & Johnson) is for the treatment of autoimmune diseases such as Crohn's disease and rheumatoid arthritis. Genor has three more biosimilars at different development stages and five novel MAbs.

"Since biosimilars are still registered as new drugs and it often takes about two years to get a clinical trial approval, a separate regulatory pathway doesn't necessarily mean a faster pathway; it's a matter of organizational structure adjustments," Fiona Cheng, director of preclinical, clinical and registration at Genor, told BioWorld Today in February. "If China still adopts the drug evaluation system and not the filing system like the U.S., the time spent on reviewing applications will not be shortened even if there is a biosimilar-dedicated regulatory pathway." (See BioWorld Today, Feb. 11, 2015.)

"The current oncology and rheumatoid arthritis markets in China are worth ¥60 billion and ¥6.6 billion, respectively. . . . The MAb market has a capacity of ¥25.4 billion and has the potential for 10-fold growth," Walvax reported. "After the project is implemented, it will eliminate our complete dependence on imported HER2-positive cancer and rheumatoid arthritis drugs."

Walvax did not respond to requests additional comment.

According to the Yunnan Academy of Scientific & Technical Information, the CFDA has approved 10 domestically developed MAbs to date. Among those, only Shanghai CP Guojian Pharmaceutical Co.'s Yisaipu (etanercept) and Jiannipai (an anti-CD25 MAb), as well as Biotech Pharmaceutical Co.'s nimotuzumab (targeting EGFR) have really achieved industrialization.

There are also 12 foreign MAbs available in China, including Roche's rituximab, bevacizumab, daclizumab, trastuzumab, tocilizumab; Novartis AG's basiliximab, ranibizumab; Johnson & Johnson's infliximab; Merck & Co. Inc.'s cetuximab; Abbvie Inc.'s adalimumab; Pfizer Inc.'s etanercept; and Cuba Center of Molecular Immunology's anti-CD3 MAb. For the time being, however, the market share of MAbs is very low in China, merely 1.7 percent compared with the global average of 34 percent.

The low market share for MAbs in China underscores the potential of the wider biosimilars market, which many expect to be worth as much as $2 billion this year, with more companies jumping into the business.

That level of market growth puts China in a different category from many of its Southeast Asian neighbors. In those markets, which include some of the fastest growing economies in the world, the potential for biosimilars may be limited, with BMI Research attributing that to low income levels and underdeveloped health care systems.

ISSUE OF AFFORDABILITY

Southeast Asia has been on drugmakers' radars for some time, but the manufacturing and distribution of generics remains the main driver of pharmaceutical industries in many of those countries. It will be quite some time before expensive biosimilars make a serious push for market share.

And yet, there are some signs of movement. Malaysian biotech firm Inno Bio Ventures Sdn. Bhd. announced the signing of a memorandum of understanding with Iranian firm Aryogen Biopharma in August. The agreement focused on four biosimilars: rituximab for the treatment of non-Hodgkin lymphoma, rheumatoid arthritis and chronic lymphocytic leukemia; etanercept for the treatment of rheumatoid arthritis, psoriatic arthritis, psoriasis and ankylosing spondylitis; trastuzumab; and factor VII to treat hemophilia and congenital factor VII deficiency.

"Biopharmaceutical is one of the lucrative industries to support economic growth. The Ministry of Science, Technology & Innovation [MOSTI] sees the role of health care as one of the flagship sectors, and we will continuously support Inno Bio in their effort to produce and commercialize biopharmaceutical products", said Minister Ewon Ebin, of Malaysia's MOSTI when the two signed the deal. "I hope this collaboration between Inno Bio and Aryogen to produce the first Malaysian made biosimilars, will revolutionize health care by reducing the cost and increasing access to life-saving drugs."

The agreement will make it possible for Malaysia-made biosimilars to be distributed in nearby countries such as Vietnam, Cambodia, Laos, Myanmar and the Philippines.

But in those markets, affordability could easily stand in the way of the accessibility.

"Even at the 40 percent discount from originator prices that both firms are willing to charge, the estimated cost of a biosimilar trastuzumab will amount to $29,949 for a full course while etanercept would cost $9,207," said BMI Research.

That is far beyond what patients in many of those countries can afford. The cost of biosimilars is much higher than the per capita pharmaceutical spending. Vietnam spent just $41 per person last year on health care and the Philippines $32. Cambodia, Laos and Myanmar spend far less at $14.90, $14.40 and a paltry $7.30, respectively.

The majority of the health care expenditure in those markets is out of pocket, which makes it even harder for patients to afford biosimilar products. In Myanmar, which lacks a universal health care system, out-of-pocket health care payments accounted for 68 percent of total health care expenditures in 2013.

Even though the Philippines and Vietnam are rolling out universal health insurance schemes, expanding coverage remains a challenge.

In China, expensive biologics are also not covered in national reimbursement schemes.