[THE INVESTOR] SONGDO, Incheon -- Korea’s Celltrion will take away half of Johnson & Johnson’s Remicade market in the US with its biosimilar drug that hit the country last year, the company’s CEO said, citing its price competitiveness and quality assurance.
“We expect to take away around 40-50 percent of Remicade’s market share in the US at a faster pace than we did in Europe,” said Celltrion’s Chief Executive Officer Kim Hyoung-ki in an exclusive interview with The Korea Herald and The Investor at the company’s head office in Songdo on April 12.
Celltrion CEO Kim Hyoung-ki
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Celltrion launched Remsima, a biosimilar referencing Remicade, in Europe in 2014, and entered major markets including the UK, France and Germany since April 2015. About two years after its European launch, the cheaper copycat drug held around 30-40 percent of the region's Remicade market, the company said, quoting market data compiled by IMS Health as of the end of 2016.
Remsima could eat into Remicade’s dominance in the US market faster than its performance in Europe, presumably within two years, the CEO indicated.
In partnership with Pfizer, Celltrion launched its Remicade-referencing biosimilar under the name Inflectra in the US in November last year, pricing the drug at 15 percent cheaper than the original. Inflectra is the only Remicade-based biosimilar sold in the US. The drug is prescribed to treat autoimmune diseases such as rheumatoid arthritis, Crohn’s disease and ulcerative colitis.
Not only its competitive pricing, but also the credibility of Inflectra in terms of quality and safety are the key to taking away the market share of the original drug, Kim said.
“When doctors prescribe biologic drugs, they consider not only the pricing but also relevant clinical data assuring its quality and safety. In the case of Celltrion, we’ve already built up such quality credentials in Europe, and are simply adding competitive pricing to our offering.”
In the first quarter of this year, worldwide sales of J&J’s Remicade dropped 6 percent to $1.67 billion on-year while the drug’s sales in the US market fell 2.4 percent to $1.18 billion during the same period, according to J&J’s quarterly earnings report.
Backed by the optimistic performance in the US market, Celltrion aims to raise 860.4 billion won ($753 million) in revenue and 488.6 billion won in operating profit in 2017. The company reaped 670.6 billion won in revenue and 250 billion won in operating profit on a consolidated basis in 2016.
“It is a matter of time for Remsima to generate a few trillions of won of sales (worldwide),” said the CEO, one of the founding members who raised the international profile of Celltrion.
To expand Infectra’s inroads into the global market, Celltrion is set to introduce a new format of the drug. Currently, the drug is administered only via an intravenous injection, which involves injecting the drug directly into the veins.
But Celltrion is newly developing the drug in the form of a subcutaneous injection -- injecting the drug into the fatty layer under the skin. This new method could save time and increase patient convenience as it would allow patients to inject the drug by themselves without having to go to a hospital.
“Patients who were satisfied with the therapeutic effects of infliximab, the active pharmaceutical ingredient of Remicade, were still inconvenienced by its IV format. They are expected to seek out the SC version of Remsima when available,” said another official at the company.
Asked of Celltrion’s ultimate goal, the CEO said it is the development of new biopharma drugs, stressing that its business of making copycat drugs is the means to actualize it.
“Our vision is to invest 1 trillion won toward new drug research and development annually,” said Kim. “And to reach this goal, we’ve sought to generate stable and large-scale revenues and profits by successfully developing and selling biosimilars.”
Celltrion jumped into the biopharma business in 2002 as a contract manufacturer of drugs. Raising cash through its contract manufacturing business, the company started to develop biosimilars in 2009, when the mechanism of a near-replica of a live cell biologic medication was literally unknown in the local market.
As Celltrion’s biosimilars business has taken root, the company is now setting out to pay more attention to the development of new drugs, the CEO said.
As part of such efforts, the company officially separated its R&D team into two tracks -- biosimilars and new drug development -- starting this year.
“The new division reflects our goal to prioritize and shift the company’s overall direction more toward new drug R&D,” Kim said.
Besides developing new drugs, Celltrion will also discover and purchase new drug licenses from biotech ventures, citing the low success rate of in-house R&D development.
“Internal discoveries account for only around 30-40 percent of big pharma companies’ new drug development portfolio. The rest is purchased from other drugmakers,” Kim said.
“Likewise, we’re looking to purchase or invest in new drug pipelines from third parties. That is why Celltrion recently formed a 150 billion won joint venture fund with Mirae Asset Financial Group -- to invest in local early stage biotech startups.”
In addition to Remsima, Celltrion has two additional biosimilars underway -- one referencing Roche’s lymphatic cancer drug Rituxan and another referencing Roche’s breast cancer drug Herceptin.
Truxima, Celltrion’s Rituxan-referencing biosimilar, obtained sales approval from the European Medicines Agency in February. The drug has already begun sales in the UK and is expected to hit additional markets in the region in the coming months.
Celltrion has also submitted its Herceptin-referencing biosimilar, Herzuma, to the EMA. The European drug regulator is expected to grant its approval within this year, the CEO said.
Moreover, the firm is planning to submit both Truxima and Herzuma to the US Food and Drug Administration by June. It has been filing petitions to nullify additional patents on Herceptin that have been filed by Roche to extend the drug’s patent life as well.
As the sales of its three biosimilar drugs are set to take off, Celltrion plans to expand its production capacity, as well as seek partnership with global contract manufacturing organizations. And Samsung BioLogics, another dominant player in the biopharma industry, is no exception.
“Why not?” said Kim. “Certain conditions including pricing should be met. But in general, I’d say we could find better ways by establishing cooperation with a fellow Korean company (in pioneering Korea’s biopharma industry).”
By Sohn Ji-young and Cho Chung-un/The Korea Herald