The rise of biologics: is the sector ready for future demand?

While global regulatory agencies have focused much of their attention on approving COVID-19 tests and vaccines for use over the last few years, now the focus is shifting to other regular novel drug approval processes.

Analysts are already predicting which new approvals have the potential to make a major impact and could become the next blockbusters, and the list already looks promising. By the end of June 2023, 17 new products had been approved by the US Food and Drug Administration (FDA), highlighting the possibility that the approval rate could recover to pre-pandemic levels this year.

During 2022, the number of total approved biologics (Biologics License Applications – 15) kept pace with the total number of approved small molecules (New Molecular Entities – 22) for the first time ever. That year also marked the arrival of the 40th biosimilar approval in the US, as the Center for Drug Evaluation and Research (CDER) cleared seven new biosimilars. During this period, the European Medicines Agency (EMEA) approved six biosimilars, bringing the total number of approvals in Europe to 74. The global biologics industry is thus witnessing steady growth, as new modalities – including antibody-drug conjugates (ADCs), bispecific proteins, and cell and gene therapies – now account for a significant one-third of approvals compared to last year.

According to Evaluate Vantage’s 2023 Preview report, seven out of the ten global top-selling drugs are either biologics or vaccines. In addition, eight out of ten of the best new sales-generating drugs predicted for 2023 are biologics. Over the next few years, over 30 molecules will go off patent, many of which will be orphan drugs and have biosimilar competitors in the pipeline, thus further expanding the global biologics market.

The significant number of new approvals raises questions about additional global capacity and whether capacity constraints will be felt if they are not addressed in a timely manner by the industry. To bring biotherapeutics to realisation, a significant amount of planning, capital expenditure, access to talented R&D and chemistry, manufacturing, and controls (CMC) personnel, and extensive experience in biologics production are required.

‘Some biopharmaceutical experts believe Europe will grow ahead of the US and possess the world’s largest biologics manufacturing capacity within the next five years’

According to a few industry reports, the outlook for global biologics manufacturing in 2023 is extremely optimistic, with companies looking to ramp up their internal capacity or outsource to trusted contract manufacturing organisation (CMO) partners. Some biopharmaceutical experts believe Europe will grow ahead of the US and possess the world’s largest biologics manufacturing capacity within the next five years. Europe’s installed capacity is expected to increase by up to 15% during this time.

Given the complexities involved in biologics’ manufacturing, it will take the next two to three years to build additional capacity and ramp up existing capacity through initiatives like continued automation and the adoption of new small- and large-scale bioprocessing technologies.

Leading EU countries in the health biotech sector like Switzerland, Sweden, Denmark, the Netherlands, Germany, Ireland, France, etc all continue to maintain an emphasis on national education in STEM subjects and investment in R&D. Countries like Germany and France have developed biotech clusters in specific regions that specialise in certain fields, and there is healthy collaboration between companies, universities and R&D institutes.  Many European countries are thus taking proactive initiatives to support new investment in the biopharmaceutical sector and create a collaborative ecosystem for continued growth. Ireland, for example, offers a very conducive ecosystem for the life sciences sector through pro-enterprise government policies, R&D tax credits and clusters of biopharma, encouraging global biopharma companies to consider it as a European manufacturing base. Today, leading biologics manufacturers such as Pfizer, BMS, Janssen, Amgen, Sanofi, Takeda, including leading emerging names like MeiraGTx, Horizon, Alexion, BioMarin, have their tech ops and manufacturing sites (bulk drug, fill-finish) in Ireland.

The real challenge when setting up a new manufacturing site is having access to human capital, trained and skilled staff, and the quality expertise required to manufacture at good manufacturing practice (GMP). Managing biologics and precision medicines like cell and gene therapy pipelines requires talent and sophisticated skills for the development, production and control of these bioproducts. Ireland has a long history in sterile manufacturing and vaccines, two areas with skills that are seen as complementary to commercial stem cell manufacturing.

The existing Irish biopharmaceutical ecosystem offers access to a skilled talent pool with strong experience in manufacturing, quality assurance, quality control, product development and technical teams, together with talented scientists and engineers who understand the regulatory processes. While the market for experienced talent is competitive, this is not unique to Ireland, but the fact that Ireland has the 5th highest international share of the workforce in the EU and an estimated 22% of employees working in multinational firms are expats highlights the ease of hiring highly skilled expat workers in Ireland. Not surprisingly, today Ireland is the third-largest exporter of pharmaceuticals in the world, with nine of the top ten biopharmaceutical companies operating there.

One of the early proactive steps taken by the Irish government to put Ireland at the centre of the global biopharma industry was setting up the National Institute for Bioprocessing Research and Training (NIBRT). Opened in 2011, NIBRT is a world-class institute established to promote biopharmaceutical investment in Ireland by providing research and training solutions for the global biopharmaceutical manufacturing industry. Annually, this world-class centre provides training for over 4,500 people in various areas of bioprocessing as well as for topics like the digital transformation of biopharma manufacturing and biopharma 4.0. Expanding its scope, NIBRT in Q4 of 2022 started working on its advanced therapeutics facility, which, once completed in 2023, will focus on research and training in advanced therapeutics to create a skilled talent pool that can deal with innovative biological medicines that include cell therapies, gene therapies, mRNA and DNA-based therapies, vaccines and other novel vaccines.

The secret to Ireland’s success is the way it has proactively created strategic sites with pre-approvals where biopharma companies can set up their new manufacturing footprints fairly quickly. Irish agencies continue to do a comprehensive assessment of the current and future ecosystem needs and bridge the gap with the aim of strengthening the biopharma ecosystem. One such proactive example is the way these agencies work with existing and new potential biopharma companies in Ireland to support achieving their environmental, social and governance goals (ESG) and other sustainability initiatives through various support schemes.

Looking to the future, the biologics sector is experiencing rapid expansion due to the approval of new biologics and the emergence of novel modalities. This growth presents challenges in terms of supply and demand balance, leading companies to make substantial investments in manufacturing capacity. A shift in the focus of regulatory agencies from COVID-19 tests and vaccines to other regular drug approvals, favourable reimbursements and advances in manufacturing technology have all resulted in a positive outlook for the biologics sector. The increasing number of biologic approvals, including biosimilars, has further contributed to the expansion of the global market. To meet the growing demand, companies are looking to increase their manufacturing capacity – either internally or by outsourcing to CMOs – suggesting that Europe could have the largest biologics manufacturing capacity in the coming years.

Overall, the increasing number of commercially approved biologics will certainly drive future growth in manufacturing demand, and the biologics sector will significantly expand in volumetric capacity. For global biopharma companies, production capacity issues translate to a degree of uncertainty in balancing demand and supply. Ireland’s example serves as a model for other countries in supporting the biopharmaceutical industry through strategic initiatives and collaboration, ensuring its sustainable development. As global biopharmaceutical manufacturing ramps up to address the growing demand, other European countries will have to rise quickly to these challenges and make substantial capacity investments to create a conducive ecosystem that offer these companies convenience, speed, infrastructure and, most importantly, skilled talent capable of managing this complex sector.

IDA Ireland is in the inward investment agency of Ireland.