More Insulin Biosimilars Are Forthcoming; The Market Outlook for Them

During the past few weeks, in both SEC-mandated (for publicly-held companies) earnings reports and investor presentations, plus in the business news and pharmaceutical industry trade press, we received several important, relevant updates on not one, but on FOUR insulin biosimilars currently in development from two different companies. We also know that in addition to them, insulin biosimilars are in development from at least three additional companies, plus as the "innovators", the traditional "Big Three" insulin-makers of Lilly, Novo Nordisk and Sanofi continue making their bestsellers (for the time being, anyway). 

Economists generally believe that in order for a market to be considered economically "competitive" there must be about five companies making similar products before prices start to come down due to competition. Pharma defies the rules because drug channel intermediaries including both drug wholesalers (the "Big Three" in that space include McKesson, AmerisourceBergen and Cardinal Health) who typically markup drug prices at least 50% before they even arrive on drugstore shelves, as well as Pharmacy Benefit Managers ("PBM's") all of whom interfere with ordinary commercialization rules in order to enrich themselves. Because drug pricing is negotiated behind closed doors and by secret contracts, drug pricing are widely regarded as made-up anyway with few public disclosures, which enables the nonsense we experience to take place.

Back to the recent biosimilar insulin news. 

 

 

 

 

 

The first news came from Lannett Company, Inc., which describes itself this way: 

"We primarily develop, manufacture, market and distribute generic versions of brand pharmaceutical products", also adding "Today, we market more than 100 products, mainly tablet, capsule or liquid oral generic medications." The company was incorporated in Philadelphia in 1942 under the laws of the Commonwealth of Pennsylvania, and later reincorporated in 1991 as a Delaware corporation. Today, the Lannett's corporate headquarters remain in the Philadelphia-area, specifically in the Pennsylvania town of Trevrose which is located in the northern suburbs along the I-476 "Blue Route" corridor (the beltway that surrounds Philadelphia) about halfway between Philly and Trenton, New Jersey. Lannett views insulin biosimilars as key products in the company's drug development pipeline, and as a result, it has been remarkably forthcoming about their development (even though its not exactly a big pharma company, hence what it does generally doesn't make national headlines).

Unlike the big three insulin makers who mainly use their quarterly earnings for colorful investor Powerpoint "Presentations" (Lannett occasionally does them, but they tend to be limited), however Lannett tends to use its SEC filings to provide extensive details on its insulin biosimilars. Unfortunately, its a pain in the @$$ to read thru them all because there's so much tiny text to read.

Lannett's SEC 10K filing (its 2021 annual report) says:

"In 2016, the Company announced a strategic partnership with YiChang HEC ChangJiang Pharmaceutical Co., Ltd., an HEC Group company, to co-develop a biosimilar insulin glargine pharmaceutical product for the U.S. market. The product is currently in development, and a healthy human Pharmacokinetic/ Pharmacodynamic modeling ('PK/PD') clinical trial was conducted in South Africa. The study met all of its primary endpoints. Subsequently, Lannett held a Biosimilar Biological Product Development Type II meeting with the FDA. The feedback was consistent with our expectation. The Company plans to manage the clinical and regulatory steps for FDA approval and will have the exclusive U.S. marketing rights to the product. Drug substance and drug product have been produced at a newly commissioned facility and we submitted an Investigational New Drug Application ('IND') on December 20, 2021. The pivotal clinical trial is now underway and top-line results of the study are expected to be available at the end of calendar year 2022. We anticipate filing the BLA (Biologics License Application) for the biosimilar Insulin Glargine in early calendar 2023 and a potential launch in calendar year 2024. In February 2021, the Company expanded its strategic relationship with HEC and added a new co-development agreement for biosimilar Insulin Aspart, which is expected to potentially launch in calendar year 2025. In addition, we will market other generic products developed by HEC with several launches expected over the next few years."

The Lannett 10K (the quarterly earnings release filed with the SEC) filing further elaborates: "Four of the product candidates," including "generic Advair Diskus and generic Flovent Diskus, combination drug/devices for the treatment of asthma, and biosimilar Insulin Glargine and biosimilar Insulin Aspart for the treatment of diabetes both delivered in a device [insulin pen devices], are widely-used medications that we believe represent a combined U.S. addressable market opportunity of approximately $16 billion in 2022, according to IQVIA although actual market sales will be less. Most of this value is related to the entire Insulin Glargine and Aspart markets."

The Lannett 10K filing further adds: 

"Additionally, we are focused on advancing our biosimilar Insulin Glargine and Insulin Aspart pipeline products. We filed our Investigational New Drug ('IND') application for Insulin Glargine in December 2021 to commence our pivotal clinical trial. This trial is ongoing and top-line results of the study are expected to be available at the end of calendar year 2022. We anticipate filing the Biologics License Application ('BLA') for the biosimilar Insulin Glargine in early calendar 2023 and a potential launch in calendar year 2024. The biosimilar Insulin Aspart pipeline product is expected to potentially launch in calendar year 2025. We believe leveraging our existing relationships to collaborate on new opportunities will enable us to further strengthen our pipeline."

Then, on September 7, 2022, the trade publication known as Drug Store News (see the article at https://drugstorenews.com/lannett-completes-clinical-trial-subject-dosing-biosimilar-insulin-glargine for details) added some additional news based on an interview with Lannett management: "The company [Lannett] completed subject dosing in the pivotal clinical trial of biosimilar insulin glargine, a product being co-developed with partners within the HEC Group of companies.

No serious adverse events have thus far been reported, Lannett said.

Tim Crew, CEO of Lannett, said 'We achieved the subject enrollment goal to meet our statistical endpoints. Dosing of all subjects has now been completed in the healthy volunteer pharmacokinetics and pharmacodynamics study of Lannett/HEC's biosimilar insulin glargine. We continue to expect top-line data and analytics to be available toward the end of this calendar year. We then anticipate filing the Biologics License Application for a biosimilar and interchangeable insulin glargine to Sanofi's Lantus Solostar in the spring of 2022 and potentially launching the product in the first half of 2024.'"

So, in essence, we can anticipate a formal new drug regulatory filing for Lannett/HEC insulin glargine injection U-100 biosimilar in the U.S. in the first half of 2024 with it expected to hit the market the following year. Lannett also has an insulin aspart injection U-100 biosimilar which is expected to formally apply for FDA approval in sometime in 2024, likely hitting the market the following year.

During Lannett Company, Inc.'s Q2 2021 Earnings Call, it elaborated a bit further about the HEC insulin factory which was well worth a read. Visit the transcript from that presentation at https://www.nasdaq.com/articles/lannett-company-inc-lci-q2-2021-earnings-call-transcript-2021-02-04 -- just search for "insulin glargine asset" and that will take you to the right part of the discussion. I won't list all of it here, but this was worth a read:

"Second, the new state-of-the-art dedicated insulin manufacturing facility has been built expressed with USA standards and it stocks with the finest European equipment. It has been commissioned at a cost well north of $100 million. That plant has the capacity adequate to supply double-digit market share in the multiple metric ton U.S. insulin market, which is what is needed to compete in the U.S. market. And if we are successful, HEC stands ready by contract to build even more capacity."

On November 7, 2022, there was a PRESS RELEASE that the Lannett Company, Inc. had entered into an agreement with Ypsomed AG, the manufacturer and supplier of the pen injector device to be used in connection with its biosimilar insulin glargine and biosimilar insulin aspart development programs, that will provide a patent sublicense to the company and its strategic alliance partner within the HEC Group of companies (HEC). Lannett and HEC will, in exchange for its financial contribution, receive a sub-license to a licensing arrangement between Ypsomed and Sanofi-Aventis Deutschland GmbH, the holder of various patents related to the pen injector device.

Interesting. 

While I suspect Lannett will simply copy what Viatris/Biocon did with the launch of Semglee (introducing both a branded but high-price/high-rebate product aimed at the PBM segment, and an identical unbranded low-price/low-rebate product aimed at the patient/pharmacy house-brand (which it calls "white-label" identified in the company's SEC filings) market, Lannett has not really mentioned doing any of that ... yet, which is appropriate since neither product has been approved by the FDA yet, hence the FDA doesn't want to see the company talking about those things until the products are actually approved. By comparison, big pharma dances around the issue with investors by hinting and suggesting things to inform investors without actually saying anything that FDA might slap them with. Small pharma can't really do that.

 

 

 

 

Next up was news from Amphastar Pharmaceuticals, Inc. which is based Rancho Cucamonga, CA (located in San Bernardino County in the Los Angeles exurbs), which describes itself as a company focused on developing, manufacturing, and marketing injectable, intranasal, and inhalation products; and Complex medications including biologics recently announced plans for several of its own insulin biosimilars which I had not previously been aware of (although the fact that its now selling generic glucagon was a clue). 

In truth, Amphastar, much like biosimilar insulin rivals including both Lannett, Sandoz and even Civica, is also relying on co-development partners located offshore (Amphastar has several partners in China, although it claims to be "vertically integrated" with them, but I believe under Chinese law, Amphastar cannot technically "own" its Chinese partners outright) to manufacture the Active Pharmaceutical Ingredients ("API's") offshore and will then package the product into vials and insulin pens domestically for sale in the U.S. I should clarify that Amphastar says on slide 5 of its presentation that it is "vertically integrated" with manufacturing, which suggests that the company actually OWNS its Chinese partner; when in reality it may have a minority stake in the company and have an exclusivity contract with it.

As hinted, you may recall that Amphastar made headlines within the diabetes community back on December 28, 2020 as the first-ever generic glucagon emergency kit to receive FDA approval. That product became the cornerstone of Amphastar's "Diabetes" portfolio (in spite of being the first, the FDA very quickly approved a second generic glucagon from Fresnius Kabi USA not long after the Amphastar product was approved). These are inconvenient, old-school, mix-and-inject glucagon products as opposed to a more "modern" forms of glucagon which most patients and caregivers seem to prefer. Now that those products have gone generic, sales are falling. Not that the prices have come down very much. GoodRx reports that one Amphastar generic glucagon product sells for $233.12 at Walmart pharmacies, which is quite high. By comparison, the lower price is $88.28 at Rite Aid pharmacies.

Hence, Lilly is pulling the plug and discontinuing its old-school product at the end of 2022 to focus exclusively on marketing its Baqsimi intranasal glucagon product, while this week, rival Novo Nordisk announced a new partnership to commercialize Zealand's Zegalogue Hypopens since Novo Nordisk does not have a "modern" glucagon of its own to commercialize. A partnership between them seemed a forgone conclusion since both companies are based in Denmark anyway.

 

But this week we saw a presentation which Amphastar Pharmaceuticals gave at the Jeffries Healthcare Conference on June 8, 2022. SeekingAlpha shared the presentation (the company's Investor Relations website is at https://ir.amphastar.com/ but is limited in the archived content found there. Note that the corporate website presentation differed only in that the cover slide clearly said "Jefferies Healthcare Conference, June 8th, 2022" but every other slide is identical. You may see the archived presentation from SeekingAlpha at https://www.slideshare.net/sstrumello/amphastar-pharmaceuticals-sep-2022-corp-presentationinsulin-biosimspdf, or above. In particular, observe slide numbers 5, 6, 11, 16, 18 and 20. Amphastar announced more details on the company's plans to sell four insulin biosimilars, including a version of glargine, aspart and rather curiously, old-school rDNA biosynthetic "human" insulin product (most likely regular and isophane/NPH, which would bring the total to four). The latter was particularly surprising to learn, although I welcome it. The insulins (and not its glucagon product) is the focus of the second part of this week's post.

In its investor presentation, Amphastar was very clear that it intends to attain approvals for biosimilars of Lantus, Novolog and Regular (and likely isophane/NPH, not simply biosimilars, but INTERCHANGEABLE biosimilars which suggests plans to target the PBM segment of the market without acknowledging the patient market); the presentation did not specify which, but slide 6 specifies that it has four injectable products now in development, while slide 18 says those will be glargine, aspart and "recombinant human insulin" which is essentially regular, and isophane/NPH which would total four products; its unclear if any licensing is even necessary to Novo Nordisk which developed isophane/NPH back in the 1950's because the patents are all now really expired, although Lilly did pay licensing fees for isophane at that time). But it was clear that its a multi-step approval process and Amphastar, unlike rival Lannett, tends to be more tight-lipped about where things stand until the company is closer to launch.

So, Which Insulin Biosimilars Are Currently In Development (and from Whom)?

We now have solid evidence that in spite of the supposed challenges facing U.S. biosimilars (including insulin) caused by so-called "rebate walls" erected by branded drug companies that pay billions in rebates to PBM's, that there are more than a few insulin biosimilars currently in development even in spite of those challenges.

We can count on: 

(1) Lannett/HEC plans to sell glargine and aspart, 

(2) Amphastar Pharmaceuticals/Amphastar Nanjing Pharmaceuticals (ANP) in Jiangsu China plans to sell glargine, aspart and two rDNA "human" insulin (likely Regular and isophane/NPH), 

(3) Civica/GeneSys Biologics (GeneSys is based in Hyderabad, India) plans to sell glargine, aspart and lispro, and 

(4) Sandoz/Gan & Lee (in Beijing, China) have all announced plans to enter the U.S. insulin market in the next few years selling glargine, aspart and lispro. 

I also strongly suspect that we could also still see Fresnius Kabi USA also enter the U.S. insulin biosimilars space given that it already has a glucagon emergency kit already on the market, although I find no evidence of the company having insulin biosimilars now in development. 

Fresnius Kabi USA is based in the Chicago suburbs (specifically, Lake Zurich), although the parent company is based in Switzerland, with the generics and the global biosimilars business based outside of Frankfurt, Germany. 

Each company has unique commercialization (notably, pricing) strategies, but the path which was already paved by a FIFTH (or a sixth if Fresnius Kabi USA eventually enters the U.S. insulin space) entity, specifically Viatris/Biocon in Johor, Malaysia which already has two versions of FDA-designated "interchangeable" U-100 insulin glargine injection already being sold in the U.S. right now seems to be the likely direction for others. Viatris/Biocon also has biosimilars of both aspart and U-300 glargine now in development. Note that Viatris agreed to sell its half of its joint venture with Biocon to Biocon Biologics and the sale has already received regulatory approvals in India and the U.S., therefore that will close by Q2 2023 and the Viatris name will disappear from the packages and be replaced by Biocon Biologics instead.

Unexpected Developments Since My Jan. 8, 2007 Article on Insulin Biosims

I must admit: when I first wrote about the unnecessarily long-delayed insulin biosimilars in the U.S. market over 15 years ago (all the way back on January 8, 2007; catch my groundbreaking post at https://blog.sstrumello.com/2007/01/business-of-diabetes-real-story-behind.html for my original coverage), I had some doubts we might ever get here. And, beyond that, thanks to the aggressive PBM rebate aggregation, I also never envisioned the absolute necessity of having offshore manufacturing partners would be so desperately needed in the insulin biosimilars space for biosimilar-makers to pay multibillion dollar, legally-exempted "kickbacks" in order to bribe PBM formulary managers for a spot on their drug formularies. Now, at least, the FTC seems to be of the opinion that rebates paid to PBM's in order to exclude less costly competition may actually be in violation of no fewer than five different U.S. laws, although not much has changed aside from a formal policy statement revision. I expect once the FTC's PBM study is done, they along with the U.S. DOJ will eventually be forced to sue the insurance company-owned PBM's to bring that corrupt practice to an end.

But fast forward 15 years, and here we are.

That said, I am actually quite optimistic about the possibility of biosimilar insulins. We could see biosimilar insulins from a variety of companies. One element worthy of acknowledgement is that we tend to think of generics and biosimilars as products sold under generic drug name with the manufacturer name on those products. So, we could soon have something like an Amphastar Insulin Aspart Injection U-100 available. But beyond that is something manufacturers call either "White Label" or "Private Label" products which are sold under the brand names of the retailers, such as Walgreens Ibuprofin tablets (the products are actually made by a drug company that specializes in white label or private label merchandise). Hence, we could soon see a Rite Aid Insulin Glargine U-100, or Walgreens Insulin Aspart U-100. Several of the companies acknowledged in this post already sell "White Label" or "Private Label" drugs and biosimilars. One of them may come from Lannett or Amphastar.

In the past, when Novo Nordisk and Lilly discontinued insulin varieties, patients were FORCED to pay higher prices for a new insulin they might not even have wanted to switch to. Now, biosimilars will change that dynamic. If Novo Nordisk opts to "retire" Novolog and stop making the product, patients will still be able to continue using biosimilar versions of aspart, only other companies will be making it, even if Novo Nordisk "retires" the product. Only this time, patients will not be FORCED to "upgrade" to Novo Nordisk's newest, patent-protected insulin variety in order to line that company's pockets. That means biosimilars have already altered the U.S. insulin market in a very important way.

Incidentally, that USED to be how the U.S. insulin market worked (that patients upgraded when they and/or their doctor wanted it to happen, not when pharma forced them to upgrade to pad big-insulin's bottom lines), but somewhere along the way, the market became an oligopoly which put profits over patients. In that way, many patients have become victims of big pharma marketing tactics because no alternatives existed. That dynamic has been changed by the advent of biosimilars, and that is a very welcome change in my assessment.

But I am also not naïve about what may happen next.

We still have Lilly, Novo Nordisk and Sanofi who dominate the branded insulin market right now (although Sanofi's U.S. insulin business is currently on life-support now that Lantus has lost all patent exclusivity and a half-dozen biosimilars are either already on the market, or currently pending FDA approval right now), but it's theoretically possible that we could simply see one or more big insulin-makers like Lilly willing to slash its prices on its"authorized generic" Insulin Lispro to a price of just $30/vial (which is what Civica/GeneSys Biologics plans to sell their biosimilar insulins for), and I suspect Sanofi would (eventually) likely match them. That's why Civica announced that its forecast is that Civica could potentially capture 30% of the U.S. insulin market, rather than a much larger percentage.

Novo Nordisk is assuredly more in-bed with the PBM/rebate issue, hence its "authorized generic" unbranded biologic is slightly more costly than rival products from Lilly and Sanofi. The company admits its now paying "rebates" to PBM's amounting to 74% of the company's gross U.S. sales, hence its profit margins in the U.S. are falling rapidly. But if my insurance wasn't paying for it, I wouldn't even bother with Fiasp anyway; I don't really care for it, and would prefer lispro if I had a choice in the matter. When prices fall to $30/vial, I will be able to choose whichever insulin replacement therapy works best for ME, rather than the one which pays my insurance company's PBM the biggest kickback!

Author P.S., November 2, 2022: 

I wanted to provide some more clarity on Lannett Company's insulin biosimilars. In Lannett Company's Q3 2022 Quarterly Earnings release to the SEC (see the company press release at https://www.prnewswire.com/news-releases/lannett-reports-better-than-expected-financial-results-for-fiscal-2023-first-quarter-reiterates-full-year-guidance-301666821.html for more details), Lannett revealed the following details about its planned insulin biosimilars:

• Dosing of subjects in the pivotal trial of healthy human volunteers for biosimilar insulin glargine has been completed, with no reported serious adverse events. Initial results from the trial are expected next month (in December 2022). The filing of the Biologics License Application (BLA) is anticipated next Spring, and thus a potential launch of the product in the first half of calendar year 2024;
  
  
• The company's partner (HEC) is producing biosimilar insulin aspart at commercial scale and the company expects to request a Type II meeting with the FDA in January of next calendar year (2023). An IND filing is anticipated for later this fiscal year (December 2022). The company estimates initiating the clinical study next summer and completing the study in the first half of calendar 2024. The company anticipates a potential launch of the product in calendar year 2025; 

Hence, we can anticipate Lannett/HEC insulin glargine to be commercialized in H1 2024, and Lannett/HEC insulin aspart to potentially launch in calendar year 2025 (exact timing still TBD).

Author P.S., January 4, 2023:

In a subsequent update from the company, see https://www.prnewswire.com/news-releases/lannett-provides-development-update-on-biosimilar-insulin-products-301712782.html for details), Lannett Company announced it had achieved a positive animal pharmacokinetic (PK) study results for Lannett/HEC biosimilar insulin aspart vs. U.S. Novolog (the reference biologic).

• The study indicated the products were highly comparable when animals were dosed with equal quantities of the drugs via subcutaneous route. Data from the study will be submitted to the FDA as part of the company's request, expected in the first half of calendar 2023, for a Biosimilar Biological Product Development (BPD) Type II meeting.
  
  
• The company also said that analysis of the pivotal trial results for its biosimilar insulin glargine continues, although it now anticipates top-line data to be available by the end of February 2023. Tim Crew, CEO of Lannett said that testing was paused for equipment maintenance and recalibration. That delay was further compounded since the testing was thus not completed by the lab's year-end shutdown. Once all samples have been tested, statistical analysis of the data will commence.
  
  
• "While we anticipate filing the BLA for our biosimilar insulin glargine will be pushed back by about two months to mid-year 2023, our target for potential launch late in the first half of calendar 2024 remains in range. Moreover, we continue to believe the trial will be successful in meeting its clinical endpoints and expect to avail ourselves of an FDA pre-submission meeting to increase the likelihood of a first-pass approval and potentially shorten the review time."