BiosanaPharma wants to produce and market medicines for severe allergic reactions, rheumatism and cancer that are at least twice as cheap as the currently available products. The company is developing biosimilars for this purpose. Biosimilars are biological medicines, often antibodies, that are similar to an original medicine of which the patent has expired. BiosanaPharma applied for an Innovation Credit to finance the development of a biosimilar.
Antibodies are natural proteins that humans and animals develop to fight viruses, bacteria and other pathogens. ‘They are the soldiers of the immune system and we have the ability to increase their numbers by administering them in the form of medicines,’ explains Ard Tijsterman. ‘These treatments are expensive, varying between €10,000 and €100,000 per patient per year.’
‘The authorities (the EMA and FDA) require biosimilars to offer the same quality and effectiveness as the original medicine, for which purpose stringent guidelines have been developed.’ The biggest differences between the original and the biosimilar are the manner of production, the shorter length of the clinical trials and the price. ‘Thanks to a new production process, whereby we are cooperating with partners in several countries, we will eventually be able to offer our medicines for 50 to 70% less than the originals. Moreover, this is 20 to 40% cheaper than the prices our direct competitors are asking.’
BiosanaPharma is active in a competitive market with more than 100 other parties. ‘Most of these companies develop biosimilars for cancer and rheumatism. In order to acquire a larger share as a newcomer in this market, we will initially focus on a biosimilar for allergic reactions called Omalizumab.’ BiosanaPharma estimates that the costs of the early development phase will be around €7.5 million. ‘In this phase we will produce Omalizumab at pilot scale, which will be followed by preclinical tests and then a clinical trial with a group of healthy volunteers.’
It is expensive to develop a new platform and a new biosimilar product, and it is not easy to find funding. ‘Most venture capitalists prefer to spend their money on new medicines rather than on cheaper alternatives to existing medicines in competitive markets,’ explains Tijsterman. ‘Happily, the Innovation Credit is ideally suited to financing expensive clinical development processes. Moreover, with this Innovation Credit the government is demonstrating its confidence in this product, which may help win over other investors. The Dutch government has granted BiosanaPharma an Innovation Credit of more than €3 million. The biotechnology company is relying on its own capital and a network of angel investors for the rest of the required funding.
BiosanaPharma received the Innovation Credit later than they expected. ‘The money is on loan and the government wanted to be sure that we will be able to pay them back,’ says Tijsterman. ‘This is understandable, but in our case it took a little longer to receive the loan because we are being co-financed by several foreign parties from Australia and other countries. After the decision was made we had to provide bank guarantees and additional surety from our investors. This administrative process took quite a long time.’
To qualify for Innovation Credit you need to be able to demonstrate sufficient co-financing. ‘Make sure you set down firm written agreements with your investors well in advance,’ suggests Tijsterman.