Much of the promise in the Canadian life sciences sector is landing in biologics — also known as biopharmaceuticals and distinguished from chemically synthesized drugs by the fact that they are manufactured in, extracted from or synthesized at least in part from biological sources. So much so that biologics has become a significant driver in the evolution of the industry and the law around it — and at a pace that is keeping stakeholders and lawyers busy and guessing.
According to the Canadian Venture Capital Association, life sciences Venture Capital (VC) investment in 2015 was up 39 per cent in deal volume and 35 per cent in deal value over 2014, much of it in biologics. Indeed, federal government research has confirmed the potential or biologics.
“Biologics continue to become increasingly dominant in market share and as an exceptional driver of market growth,” says Industry Canada in a study entitled < >Canada’s Pharmaceutical Industry and Prospects
A s it turns out, the top two or three and some six of the top 10 pharmaceutical products in Canada are biologics. Among the primary drivers of Johnson & Johnson’s status as one of Canada’s biggest-selling brands, for example, are the biologics Remicade and Simponi, both arthritis treatments. J&J is the parent of Janssen, Canada’s largest pharmaceutical company.
Big Pharma is not the only beneficiary of this trend. Combined with multinationals’ desire to improve their pipeline productivity, the growth of biologics has meant, according to the Industry Canada study, that small and medium biopharma enterprises in Canada “have an opportunity to flourish” given adequate access to capital. Indeed, the federal study cites “significant infrastructure and expertise in manufacturing complex products” such as biologics on a small scale as among the Canadian industry’s advantages. By contrast, large-scale biologics manufacturing is being hindered by the uneven distribution of an appropriate skilled talent pool.
Fortunately, the promise of biologics has induced a growing degree of co-operation between Big Pharma and embryonic biotechs, a partnership boosted by increasing involvement from the public sector.
In January 2016, Prime Minister Justin Trudeau announced that the government would give $20 million to the Centre for Commercialization of Regenerative Medicine to establish and operate the Centre for Advanced Therapeutic Cell Technologies in Toronto in collaboration with GE Healthcare and other industry partners.
Earlier, Ontario’s Liberals spent $19.4 million to lure JLABS, a Johnson & Johnson biotech incubator, to its MaRS discovery district in Toronto. Economic Development Minister Brad Duguid assured the public that J&J’s investment “is significantly more than ours.”
The laboratory, the first JLAB outside the United States, will be larger than the ones in Boston, Houston and San Francisco. But like its counterparts, the Toronto site will provide research facilities for small, independent biotech start-ups.
And barely one month after the JLAB announcement, the Ontario Institute for Cancer Research revealed a $450 million collaboration with Janssen and Novera to accelerate the development of a promising biologic for haematological cancers. Novera is a new Ontario biotechnology company that is exploring novel therapeutic compounds in conjunction with OICR and Toronto’s University Health Network.
Earlier, in 2014, TVM Life Sciences Venture VII Fund announced its fourth investment in a start-up with plans to develop a psoriasis treatment. The fund is a collaboration between Montréal-based TVM Capital Life Science and Eli Lilly. A press release described the collaboration as an opportunity “to finance and access innovation beyond the company’s walls” and as a way to manage risk and share reward.
Looking down the road, the emergence of personalized medicine suggests the life cycle of biologics is not likely to be truncated anytime soon. Personalized medicine means that therapeutic pharma is now targetting smaller populations who will benefit from what have been called “orphan” drugs.
Although Health Canada has released guidelines covering biologics in recent years, a lack of clarity continues to exist. To make matters worse, Canadian jurisprudence relating to biologic patents is so sparse that the Patent Appeal Board has frequently commented on it.
Health Canada has, however, taken the differences between biologics and chemically-synthesized drugs into account in the approval process by requiring more detailed chemistry and manufacturing information from manufacturers about biologics than the regulator does from small molecule product producers. Special regulation is necessary “to help ensure the purity and quality of the product, for example to help ensure that it is not contaminated by an undesired microorganism or by another biologic,” according to Health Canada.
The difference between small molecules and biologics becomes even more pronounced in the case of products that follow innovative drugs to market. While generic small molecule drugs do not need to demonstrate safety and efficacy, Subsequent Entry Biologics – known as “biosimilars” (SEBs) in the European Union and “follow-on protein products” in the US – do, albeit to a lesser degree than the innovative biologics they are following.
Generic drugs are also judged on whether they are bioequivalent to the innovative drug, in the sense that they contain the same quantity of the same active ingredient which the body absorbs in the same way to produce the same effect. But the more complex SEBs can’t be judged on bioequivalence, and therefore even approved products can’t be as easily interchanged with the original.
Rather, SEBs’ approval hinges on “similarity” to the reference biologic, something that is, in scientific terms, worlds apart from bioequivalence. It’s also unclear how much “similarity” is required or what the precise nature of that “similarity” must be.
Since 2000, there have been only two reported cases involving biologics, both released within the last three years. The first decision was from Justice Roger Hughes in an infringement action, AbbVie Corporation v. Janssen Inc. In finding that AbbVie’s patent for a class of antibodies was valid and that Janssen had infringed it, Hughes ruled that a class of biologics can be defined by broad functional characteristics as long as the claims in support of the patent are clear and meet certain other requirements. His decision was set aside by the Federal Court of Appeal on unrelated grounds, however, and it remains to be seen how the trial decision will affect future interpretations of biologic patents.
Hughes was also the judge in Amgen Canada v. Apotex Inc., the first PMNOC proceeding involving a SEB. The 2015 decision, currently under appeal, deals with issues related to novelty, obviousness, and utility. Should the appeal go to judgment, it could shed some authoritative light on these issues as they apply to biologics.