Main

For the best part of a decade, Amgen's Epogen has been the best-selling biotech drug. This situation has now changed with the appearance of two arthritis drugs—Centocor's Remicade and Immunex/Amgen's Enbrel at pole and second position. Although indicating that biologic products are making inroads in new markets, the change also reflects a more fundamental shift at the top biologic producers to phase in new 'second-generation' products that maintain market franchises.

Epogen was launched in 1989 with seven years' market exclusivity in the orphan indication of treating anemia in kidney dialysis patients. It has been the number one protein drug since 1996, but last year slipped off its pedestal to 7th place. Part of the explanation for this is that the anemia market is now divided among Epogen and two other erythropoietin (EPO) molecules: Johnson & Johnson's first-generation EPO, Procrit, and Amgen's second-generation EPO, Aranesp. The latter two products reached ∼$3.3 billion in sales last year compared with Epogen's puny $2.5 billion!

Second-generation products, of course, make a great deal of strategic sense. Rather than pushing through a new treatment with a specialist sales force in a new indication, the goal is to consolidate a company's foothold in an existing market with an improved product that displaces both internal and external competition while maintaining the premium price structure justified by its original pioneering efforts. So, if you can pegylate, otherwise derivatize/formulate the original protein, claim a new composition of matter or demonstrate improved clinical characteristics, then this R&D strategy is going to be more profitable than ab initio innovation in another indication or another mechanism of disease.

Humanized and human monoclonal antibodies (mAbs) are now also being touted as second-generation technologies. The theory is that the clinical performance of humanized/human mAbs will be superior to their chimeric antibody counterparts because of reduced immunogenicity and improved serum half-life.

Four of the ten best selling biologics in 2005 were mAbs. Two are chimeric: Remicade for rheumatoid arthritis and Rituxan for the treatment of B-cell leukemia both sold >$3 billion worth in 2005. The other two are humanized: Avastin and Herceptin, with sales in the $1–2 billion range.

With the September launch of Amgen's Vectibix, there is now a head-to-head contest between a chimeric and a human mAb directed against the same target. The chimeric incumbent under challenge from Vectibix is ImClone Systems' Erbitux. And yet Vectibix at launch will be priced ∼20% lower than Erbitux.

Whatever the reasons for this price structure—and undercutting the competition could simply be a commercial move—this is not a pricing strategy that shouts “We have a better product than you.” But the real proof of superiority of second-generation mAbs will only come from patient and clinician feedback. And of course the list of biotech's biggest sellers in years to come.