High Quality Affordable Biologics


The world is in the midst of a biologics boom. Seven of the world’s ten best-selling therapies are biologics[1], and projections estimate global sales of biologics will reach US$390 billion by 2020[2]. The majority of biologics are sold in the United States, European Union, and Japan, and emerging market demand for biologic therapies is increasing: between 2009 and 2017, demand for biologic therapies has grown at a 23% CAGR in China and is expected to continue at this rate.[3]

Key Drivers and Challenges

  • Growing incidence of chronic diseases that require targeted treatment, resulting in emergence of mid-sized biologics (US$1 – 3bn in annual revenue)
  • Pharmaceutical companies’ growing focus on biologics
  • Key blockbuster biologics losing patent protection is likely to drive biologics innovation as well as growth of biosimilars market
  • Development of biosimilars is expected to restrain biologics year on year growth and take away market shares from biologics


Over $100 billion of biologic pharmaceutical products are expected to lose patent protection and many large monoclonal antibody therapies are coming off patent globally after 2018.


A biologic is a substance generated by a specially engineered cell. Biologics are complex molecules (typically proteins) that cannot be manufactured using synthetic processes. Biologics are called “Large Molecule” drugs to differentiate them from “Small Molecule” compounds produced through synthetic means.

Biologic drugs are produced (the technical term is “expressed”) by specially engineered cells through a process that involves reprogramming a single cell to make the desired molecule and then putting that cell in an environment where it will simultaneously multiply and express the desired molecule. This process is called “culturing”. Cell culture for a batch of a biologic drug typically requires between one and two months, after which the resulting product passes through purification, testing, and finishing steps before use in a patient.


Since production of biologics takes place inside of cells, manufacture of biologics requires specialized knowledge and infrastructure; as such, development of biologic therapies is very capital intensive. Despite the capital intensity of biologic drug development, companies big and small have invested significant resources developing new biologic therapies because they represent a proverbial “magic bullet” that can be used to treat previously incurable ailments such as breast cancer and lymphoma. In addition, revenues and margins from biologics are staggering. Seventy-four percent, or US$28.5 billion of Roche’s 2016 global pharmaceutical sales, are due to nine monoclonal antibodies.[4]Gross margins on most blockbuster biologic therapies are above 95%.[5]

The major reason biologics can generate such revenues and margins is that they are standard-of-care treatments for their disease area, and they enjoy patent protection. Despite the high revenues these therapies have generated in the past, they are still too expensive for many patients around the world. J.P.Morgan estimates that through 2020, biologics generating a combined US$55 billion in revenue will lose patent exclusivity, leading to a massive opportunity for a new class of therapies called biosimilars[6], which hold the promise of decreasing the price and increasing accessibility of lifesaving blockbuster biologic products.

Small Molecule

  Aspirin, a small molecule; it measures about 180 daltons in size.

Large Molecule
  Rituximab, a large molecule; it measures about 144,000 daltons in size.


According to the European Medicines Agency, a biosimilar is “a medicine that is similar to another biological medicine that has already been authorized for use.” Biosimilars have been likened to small molecule generics—“the generic version of a biologic”—but this is a mischaracterization. Biosimilars are significantly more time-consuming and capital intensive to develop and manufacture.

Comparison Chart
Properties Small Molecules & Generics Biologics & Biosimilars
Size Small Large
Structure Simple and well defined Complex
Production Chemically made Grown in living cells
Development Time 2-3 years Up to 10 years
Development Cost Less than US$50mn US$100 – 200mn
Manufacturing Quality Tests Less than 50 tests More than 250 tests
Approval Requirements Small trials in healthy volunteers Large trials in patients with specific conditions

Generic Drug
By definition, a generic drug is an identical copy of its reference small-molecule medicine.

Unlike generic medicines, biosimilars will not be identical to their reference biologics. Biologic and biosimilar medicines are much more complex and may be 200 – 1000x the size of conventional medicines.

Biosimilars open doors to untapped markets

Many countries with national health insurance have limited budgets allocated for drug treatments. The lower price point enables access to populations historically unreached.

Quality consciousness among physicians

Doctors / physicians are loyal to innovator molecules and cautious in switching prescriptions. However, biosimilar drugs’ lower prices present attractive options once similarity to reference drug established

Lack of patent protection for high growth products (G-CSF and Mabs)

Lack of patent rights in majority of emerging countries for biologics results in drug availability gap for patients, as well as huge market for biosimilars

[1] Philippidis, Alex. “The Top 25 Best-Selling Drugs of 2014 | The Lists | GEN Genetic Engineering & Biotechnology News – Biotech from Bench to Business.” Genetic Engineering and Biotechnology News. February 23, 2015. Accessed March 02, 2017.
[3] “Analysis of the Global Biosimilars Market.” January 16, 2014. Accessed March 3, 2017.
[4] Roche Finance Report 2016. (n.d.). Retrieved March 3, 2017
[5] “Biosimilars – A Market on the Threshold”. [A/B] Bernstein.
[6] J.P.Morgan: “Biosimilars—Assessing Key Opportunities/Risks for This Highly Controversial Space”. 31MAR2015.

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