In an exclusive interview on the sidelines of CPhl Worldwide 2018 in Madrid, head of BIOCAD Dmitry Morozov told TASS about the increasing availability of generic drugs in Russia, his company’s plans to introduce medicines for treating oncology and autoimmune diseases on the Chinese market and why it is so important for breakthrough medications to get access to the market during the early stage of clinical testing.
— The pharmaceutical market is growing very rapidly now, especially because of the production of generic drugs. What about competition in this segment both on Russian and international markets?
Competition will always exist, especially in the segment of generic drugs. Most players represented at this exhibition (CPhI) produce chemical generics. We expected something similar in the segment of biosimilars but it did not wind up being so highly competitive. Doctors in such countries as India, Vietnam, Sri Lanka, and Mongolia prefer Russian products. As it turns out the price and quality ratio works in emerging markets, too. When you offer a high quality product at an acceptable price, both doctors and patients appreciate it.
Now, we are beating competitors in local Asian markets, but I am sure that once we enter the European market we will be also successful there. In India, they produce a lot of similar medicines, but Indian doctors prefer Russian ones. Yesterday, we met our colleagues from Sri Lanka and this is what they said, "Our doctors want Russian drugs because of their acceptable price and good quality."
In Russia, we played an instrumental role in boosting the availability of both basic chemotherapy drugs as well as several biopharmaceuticals that were in short supply for many years. Our doctors are happy because now they can help many women overcome such a serious ailment as breast cancer, while patients with colorectal cancer can get the latest target drugs. while patients with lymphoproliferative disorders have been getting effective treatment using Russian medicines for four years. I think we will be of use in Sri Lanka. Even with the level of income they have in that country, our antitumor drugs are affordable for many people there.
— In late September, Industry and Trade Minister Denis Manturov announced that you would launch six products on the Chinese market. He noted that these would be drugs for treating oncology and serious autoimmune diseases, such as lung cancer, breast cancer and psoriasis. Can you now say how long will it take to implement this project? What is its current stage? Have you already begun to develop these medicines and when will they hit the market? Do you plan similar interaction with other markets (for example with Japan) and if so, how soon will it happen and what drugs do you plan to promote there?
Our company’s priority for today is to enter the Chinese market. The agreement we signed with Shanghai Pharma is also a big challenge for us. The Chinese market is interesting as far as doing business is concerned, especially now when political ties between Russia and China are good, so given this friendly environment, it is easier to solve all issues. By the end of the year, we will complete the groundwork for creating a joint venture and after that, our marketing teams will lay out the priorities and steps for launching our products on the Chinese market.
I can say that the medicines that BIOCAD is just beginning to launch on the Russian and European markets will be one of the first products that we are going to bring to the Chinese market.
In Europe, we plan three clinical trials of our drugs to treat cancer patients and those suffering from psoriasis. We have already held consultations with the ЕМА (The European Medicines Agency) and agreed on the protocol design. Similar trials will be done in China and depending on their results, a decision on registration will be taken. The medicines I am talking about now, already exist de-facto, we only need to prove that they are also effective for Asian patients.
We have been in talks with Japan for quite a long time. Our Japanese colleagues are in no hurry to make a decision. But, unfortunately, we have no time for such sluggish steps. Yesterday, I called on our colleagues to concentrate on this matter because we do not have time for such a lengthy discussion.
— What are your plans at CPhI? Are you going to sign any agreements? If so what deals will they be?
Here we have signed an agreement with Julphar, a company from the UAE. It provides for supplying our antitumor medicines to the UAE. We also concluded an agreement with Greece’s WinMedica – they became interested in our biosimilar of adalimumab for treatment of autoimmune diseases. The medication will soon be given a product license in Russia and we plan to apply for its registration in the EU in 2021. Before that, we are going to test it in European countries in 2019. BIOCAD plans to supply more than 115,000 packages to Greece and Cyprus in the first five years of sales. We also have a contract with Mexico’s Psicofarma, S.A. De C.V. BIOCAD, which provides for transfer of know-how for three medications based on monoclonal antibodies - biosimilars of trastuzumab, rituximab and bevacizumab.
This event for us is first of all an opportunity to meet old friends, to discuss many market-related issues, to do it in an informal setting among other things. From time to time new players emerge who are interested in cooperating with us. We receive a certain number of new contacts at every exhibition, and later on, we have to work on them and this is a long process.
— Do Russian producers need more state support tools, both regulatory and financial? Or is this mainly the concern of small and mid-sized businesses?
Of course, we need support, but I fear that many companies do not fully use the instruments that already exist. In the past, our domestic pharmaceutical industry was focused on internal problems and now companies are very interested in promoting their drugs on the international market and demand for them has emerged.
— If you want to export medicines, you have to carry out their clinical testing abroad. Can Russian companies afford such expenses now, or do they need state subsidies for it?
They do need subsidies, because clinical testing is costly. Expenses shelled out on a drug’s clinical testing may account for 70% of the total cost of its development and bringing it to the international market. Our experience shows that the appetites of the European regulators are growing, and some of their requirements are rather questionable. For example, in EU countries you can use a reference product only if it is bought in the EU. Why can’t we buy a cheaper product in Russia bring it to Europe and start testing? But they recognize a reference product only if it was bought in the EU while the same product by the same producer, which is sold in developing countries is not a reference product for them. Certainly, this raises costs which are already high. But if we manage to overcome this obstacle we will get access to a big market. Although later on we will need more resources for marketing and promoting our products.
— In late May you completed the second stage of your “blockbuster” – I mean PD1-blocking agent, a checkpoint inhibitor to fight cancer. You said that this agent would be launched on the Russian market in the end of 2019. Nothing has changed, hopefully - will we see the PD1-blocking agent on the market in the end of the next year? How much will it cost? Are you developing it primarily for the Russian market or do you also plan to export it? If yes – to what countries?
Soon, the results of the second stage clinical testing will be unveiled. By now, we can say that the medication really has good properties. We will submit this data to the Health Ministry and I hope that this data will be enough for the registration. Unfortunately, in Russia they do not grant a breakthrough status to medicines as the FDA does it. A breakthrough agent gets access to the market on the very early stage of clinical testing when it is already obvious that it is effective and can help many people. I hope that with time we will see such mechanism in Russia.
Our medication will be tested not only for the Russian market. Next year its clinical testing will start in the EU - first for treatment of cervical cancer and then for lung cancer. This medicine is on the list we are discussing with our Chinese colleagues and it will be among our first products for promotion in China.
— How many anticancer drugs does BIOCAD produce? How many of them are original and how many are generics? What types of cancer do they fight? What pharmaceutical drugs are the most profitable for BIOCAD?
Currently, BIOCAD produces more than 20 drugs for treatment of oncology diseases. Our portfolio of antitumor medications is constantly growing. Actually we are only beginning to bring original drugs to the market, before we produced copies of complex biologics developed by other companies. We are completing the registration of biosimilars we submitted earlier. Sometimes you spend more resources on a copy than on an original drug.
Drugs for treatment of oncology diseases are one of the main areas of our activities. Last year, it was the first time in modern history of Russia that a national company became the leader in sales of antitumor drugs in its country - earlier foreign companies dominated on the Russian market. Moreover, unlike our colleagues, we managed not only to maintain our positions but also to build up volumes of supplies in physical terms. This ensured a significant cost saving to the State in terms of cost per unit. Even more than that - for the second year in a row we maintain leadership in the segment of budgetary purchases. Of course, biosimilars bring us the main profit today. But I am sure that original drugs will gradually substitute them. We believe in their potential. Older products that we substitute by biosimilars have been on the market for more than 20 years, these products are well known and this facilitates promotion of biosimilars. However, a new product, which proves to be more effective, will take over.
— What are you sales plans for international markets? Which countries take priority? What drugs are you going to launch for those markets?
We have already received registration certificates in a number of South American countries. We are expecting a registration in Argentina and we have launched a new project in Mexico. These markets are very interesting because our drugs are in demand there and, of course, we find the prices in those countries attractive.
I can say that the Russian market is now one the cheapest in the global segment of oncology medications. In other countries, prices remain quite high. On the one hand, it seems that lower prices are not bad but on the other hand, this weakens the motivation of producers. In this case, their medicines simply disappear and the market ends up empty. I think that soon we will see it in Russia soon – when some segments of the market will have only counterfeit products of low quality.
Interview by Ekaterina Vorobyeva