The Smart Biologics Production System

The global bio industry recorded annual growth rate of 9.9% during the period between 2007 and 2011, which was higher than the automobile industry (6.4%) and the IT industry (9.5%). In particular, the global market in 2011 for biopharmaceuticals such as biosimilars, antibody products and cell therapy products, which accounts for more than 60% of the entire bio market, amounted to US$190 billion. In addition, the compound annual growth rate (CAGR) of the biological product segment for a period between 2011 and 2015 was projected at 18.1%, indicating a significantly higher rapid growth compared to the projected CAGR of the entire pharmaceutical market of 5.8%. Accordingly, demand for a biologics production system to manufacture biologics products is also expected to grow.
As for biosimilars, it is essential to prove their sameness with original drugs. Also, they are highly sensitive to production costs.
Under the circumstances, development of new biologics production facilities is required to improve yield of biologics and to prove their sameness. In particular, there is a growing demand for developing systems that can efficiently operate the complex and highcost biologics production procedures. In this context, this article intends to delve into the current status and the direction for R&D strategies of biologics and their production systems.

Overview and characteristics of biologics

Drugs/medicines refer to substances that are used for the purpose of diagnosing, treating or preventing diseases of humans and animals and affect their bodily structures and functions. In general, quasi-drugs, cosmetics, machinery and devices are not included in their categories.

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The drugs/ medicines are classified into chemical drugs and biologics, depending on their manufacturing methods. A chemical drug is manufactured through chemical reactions, whereas biologics are developed on the basis of byproducts obtained through cultivation, not through synthesis processes, employing molecular biological techniques by using such substances as cells, tissues and hormones derived from living organisms. As for chemical drugs, their efficiency over tremendous R&D investments has started to decrease as development of new substances and new drugs has reached limitations. In addition, it is impossible to employ targeted therapies for diseases, which increases the burden of side effects of chemical drugs, calling for development of new alternatives. In particular, new blockbuster drugs launched into the market by the 1980s are awaiting their patent expiration after 2000. Given that chemical drugs are manufactured through chemical reactions, anyone can produce products with the same ingredients and efficacies right after their patent expiration. Chemical drugs that are manufactured at the time of patent expiration are called “generic drugs.” As governments around the globe have adopted policies to cut back on medical and pharmaceutical expenditures, the use of generic drugs has been encouraged, whereas the launch of new blockbuster drugs with annual sales of more than US$1 billion is on the decline. This indicates that they are departing from the categories of new drug development which aims for new growth and high profits in the future. The numbers of new substance/drug approvals by the U.S. Food and Drug Administration (FDA) has decreased from around 30 each year in the 1990s to around 20 since 2000. According to Datamonitor, an international market survey company, in 2012, the chemical drug market was valued at US$370 billion. On the other hand, the market for protein therapeutics, which includes monoclonal antibody, one of the representative biologics, stood at mere US$110 billion in 2012.

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However, the six-year CAGR for chemical drugs and biologics were 0.61% and 8.1%, respectively, indicating high-growth prospect for biologics. As such, drug production is shifting from synthesis-based production to bio-based production.
The second-generation antibody drugs, which had started to enter the market in the late
1990s, are being hailed in the market, thanks to their outstanding medicinal effects and fewer side effects for indications of cancer, autoimmune diseases, and incurable, chronic diseases. In addition, it is known that new biologics products show good R&D productivity over investments. Also, success rates of new biologics by clinical stage are higher than the existing new chemical drugs by two to three times, while development periods of new biologics are shorter and their development costs are relatively lower. In particular, biologics aims for targeted therapies for specific diseases, relieving the burden of side effects. Moreover, it is possible for biologics to be utilized as personalized treatments by patients thanks to the completion of the human genetic map.

In this light, biologics are expected to lead the next-generation healthcare market. Based on such expectations and some of the recent success stories, mega-gigantic multinational pharmaceutical companies conducted mergers and acquisitions (M&As) of biotechnology companies in 2008 and 2009. Mega M&A deals such as the Pfizer-Wyeth merger, the Roche-Genentech deal, and the Merck-Schering-Plough deal were the inevitable choices made by multinational pharmaceutical companies which had been losing their growth engines and had to prepare for their future.
Biologics have been steadily launched not only by several multinational pharmaceutical companies, but also by Korean pharmaceutical companies since 1990. Some of them will witness patent expiration in the near future. However, even after the patent expiration, it is difficult to manufacture biologics with 100% identical ingredients like chemical drugs because biologics are manufactured based on production methods through cultivation, not through synthesis. Therefore, biologics manufactured after patent expiration are called “biosimilars,” not “generic drugs.” Biosimilar products should pass strict approval standards and countries are coming up with respective regulations and guidelines on biosimilars.

Biologics approval process

Approval for general products focuses on manifestation of their desired performances in a consistent and safe manner after product completion. Therefore, approval is mainly granted after going through procedures to ascertain the product’s performance.
In the case of medicines/drugs, their sale is approved only after product approval is acquired involving all stages of the manufacturing process. In other words, all the relevant processes should conform to internationally recognized standards. In the case of synthetic drugs which are synthesized through certain chemical procedures, relatively substantive processes have been in place for them given development and manufacturing experience accumulated over the long period of time.
However, biologics are made from living organisms or substances derived from them and thus their manufacturing processes take place based on diverse biological reactions. Given this, it is difficult to guarantee that the final outcomes may be perfectly identical as in the synthetic drug manufacturing processes even though they are made under the same conditions.
In addition, it is no wonder that approval procedures for biologics should be stringent if the distinctive nature of medications that they are involved in human lives is taken into consideration.
There are two laws pertaining to new drug approvals granted by the U.S. FDA: the Federal Food, Drug and Cosmetic Act (FDCA) is applied to synthetic drugs, while the Biologic License Application (BLA) approval process under the Public Health Service Act (PHSA) is applied to biologics. The BLA approval process and regulations are identical with the New Drug Application (NDA) approval process, which is designed for approval of chemical drugs. However, they differ in that the BLA has provisions designed to prevent pollution and infection of biological substances and that it requires compliance not only with the Current Good Manufacturing Practice (CGMPs) for traditional chemical drugs, but also with the Good Transportation Practice (GTP) involving cell banks. In South Korea, the Ministry of Food and Drug Safety established the biosimilars approval system in July 2009 and set up the public notification of evaluation guidelines and regulations on approval process.
Europe where patents are strictly protected has greatly contributed to the development of the biosimilars approval regulation framework. The European Medicines Agency (EMEA) already came up with a biosimilar product approval mechanism in 2004 which went into effect from fall, 2005. The World Health Organization (WHO) came up with international standards on biosimilars for 10 countries including South Korea, yet there are no unified global guidelines on biosimilars available at the moment.

Smart Bio-Production System

What is the bio-production system?

The bio production system can be defined as devices or their assemblage which are necessary for production process of biological products and are designed to be used for biological engineering technology. In addition, it can be classified into production equipment, process/analysis devices and components, and software (SW).
(Production equipment) Equipment required for such processes as cultivating cells (microorganisms, animals, humans) under certain conditions to produce final biological products and separating/ purifying final products from the cultivated cells.
(Process/analysis devices) Devices designed to conduct production process feasibility or process optimization tests or devices designed to analyze characteristics of interim or final
products.
(Parts/consumables and SW) Parts comprising the production system, disposable consumables used in the production process, and software that is capable of operating the production system in an integrated manner and of interpreting and storing data on a stable basis.

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Characteristics of the bio-production system industry

Compared to other healthcare industries, the bioproduction system industry is relatively less mature and continues to record a steady growth with bright business prospects.

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In the bioproduction system, reproducibility and reliability are of great importance given the characteristics of its products. In addition, emphasis is placed on greater precision and accuracy as the bio sector has become increasingly complex and differentiated. If problems occur during the production process due to equipment defects or lack of stability, the damage in terms of cost and time is considerably greater than in other industries.
Accordingly, most of the customers of the bioproduction system industry show preference for the existing products with proven reliability, thus posing a high entry barrier. More specifically, on the part of customers, there are few incentives to change products due to costs and risks associated with verification of new products and thus they show high loyalty to the existing products. Also, small quantity order-based production takes the most part in the bioproduction system industry rather than large-quantity order-based production as products are high-priced (some equipment are priced at more than KRW1 billion) and products have long-lasting durability (5-10 years). Also, differences in production system conditions required by respective bio products lead to various production system products, necessitating development of systems meeting the needs of customers.
In order to develop the bioproduction system, it is essential to promote development through a multidisciplinary approach involving basic science, engineering, computer science, medicine and biology. New added-value or market can be created in the existing pharmaceutical, food, chemical and agricultural fields through convergence of BIT (bio-information technology) and NBT (nano and bio-technology). As South Korea has already secured global competitiveness in the fields of machinery, electric/ electronics, and IT which are the foundation for the development of the bioproduction system, it is anticipated that the country will be able to secure global competitiveness if it develops the bioproduction system through convergence of base technologies in various fields.

Current market status

The global market for bioproduction systems is expected to grow rapidly from US$25 billion in 2008 to US$201.8 billion in 2018.
Among the bioproduction systems, cell culture apparatus is expected to grow at the highest CAGR with 13.2% in CAGR between 2008 and 2018. In terms of market sizes by different fields of bioproduction systems in 2018, bioprocess instrumentation is expected to be the largest with US$20 billion in value.

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As of 2012, the bioproduction system production in South Korea is valued at KRW121.9 billion, accounting for 1.7% of the entire bio industry production worth KRW7.1292 trillion (The 2012 Bio Industry Status Report (MOTIE, 2014). However, in terms of CAGR, the bio production system industry shows a high growth trend recording a CAGR of 12.5%. The export volume of the bio production system industry in the nation is estimated at KRW 45.3 billion making up 1.5% of the entire bio industry, while the import accounts for 12.1% or KRW 189.8 billion, recording trade deficit by KRW 150 billion.

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The import of the bio production systems is the second-largest in the nation’s bio industry after the bio pharmaceutical industry. In addition, the share of imports in the bioproduction system industry is 71.2% (KRW 189.8 billion) in the domestic market (KRW 266.5 billion), raising the need for local technology development.
In South Korea, the launch of such systems has not been reported as yet. Some companies launch such systems under the name of “bio reactor,” yet it is mainly about enzyme reactions in large containers. Most of such systems used by some large enterprises in the nation are imported from abroad.

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Technology level in Korea

Although continuous research efforts have been made to secure original technology for bioproduction system development in Korea, there is still a long way to go to achieve its industrialization. The industrial technology level for bioproduction system development in Korea stands at 69.6, compared to the highest level (when technology level of the United States is assumed as 100), showing a gap in technology level even when compared to general production system (82.4).

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Key Development Contents of the Smart Biologics
Production System

The production system for all biologics can be divided into material installation, production process, and verification. As for the biologics production system, the principal material is generally cells, while the production processes involve cell culture, extraction and purification of related substances, followed by the biological verification process. Meanwhile, the system composition comprises production equipment, process analysis equipment, and related parts and software. Functions of respective components are described as follows in terms of Classifi- manual equipment currently used:

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It is imperative to garner assistance on convergence technology to develop independently operable systems that integrate respective equipment into a single process. Meanwhile, key aspects that should be implemented based on local conditions in Korea are summarized as follows, which indicates components including materials in addition to relevant software:

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In the case of raw materials, the technology level in Korea has already reached the level of advanced countries. As for core materials, although some of them have been localized, total quantities of some consumables are imported from abroad. Also, despite their high prices, some parts such as disposable culture containers are fully imported from abroad.

However, related sensors and driving systems, which are produced by combining those sensors, can be fully accommodated by adopting local technologies. Meanwhile, as mentioned before, there have been no certified cases in Korea where modules and resultant production equipment by combining the modules have been intended for biologics production. Yet, the Korean government’s share of investment in the relevant area show downward trends.
Given the local conditions that local technologies by respective fields have reached certain levels, the key to establishing a production system is to secure engineering technology that can integrate all the elements. However, in addition to securing engineering technology for integrated production system, if we give consideration into stringent conditions that have to be met in the final product phase, more specifically the fact that final product process makes up considerable share of approval requirements in the case of biologics, it is anticipated that not only investment is needed, but also tremendous trials and errors should be experienced.

Promotion Strategies for the Smart Biologics
Production System

Establishment of a virtuous cycle-structure is essential in all industries to achieve ongoing development and to identify nextgeneration industrial growth engines through application of derivative technologies. The virtuous-cycle structure from the standpoint of the biologics industry can be displayed as follows:

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It is evident that, as this is a cyclical structure, it is impossible to secure international competitiveness in the biologics industry if even one single element among them is unstable. In Korea, customer demand and basic/convergence technologies have reached considerably high levels, yet the absence of production systems and poor infrastructure (approval, related human resources) still pose obstacles, making it difficult to move forward in the industry.
Even though belated, it is very encouraging that the Ministry of Trade, Industry and Energy has recognized the need for development of relevant systems and has presented the following roadmap. In addition, it is advised that the government, relevant organizations and academia make ongoing efforts to create the relevant infrastructure. Particularly, academia should make concerted efforts to diversify related education programs and to foster relevant biomedical engineering personnel from the engineering perspective.

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However, what should not be overlooked in the system development is the importance of securing original technology. Original technology can be found not only in core materials or raw materials of biologics, but also in production system. In the case of materials, discovery of new functions based on raw materials carries significant importance from the standpoint of securing original technology. In addition, in the case of the system, in order to secure original technology, it is important to adopt new concepts such as conducting cell culture by using tissues and organs and to develop systems that can realize a human environment, rather than following the existing system where cell culture is simply intended for cell expansion. By combining these new concepts, we will be able to add the term “smart” to the existing biologic production system.

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Conclusion and Suggestions

We are currently living in an era where many people become healthy centenarians. Given that countries around the global are fiercely competing with one another to secure next-generation growth-engine industries, it is evident that securing biologics production technology and establishment of its virtuous-cycle structure is not a choice, but a must. In particular, biologics have extremely high market potential and will become high valueadded products to the extent that it would be difficult to even predict the scope of its applications amid the rise of new diseases due to change in the environment. The fact that it is impossible to define the boundaries of its applications signifies the ceaseless creation of new industries, which will definitely play an important part of the basic engine for the creative economy.
Driving this creative engine will face limitations if only a few businesses, academic and research institutions in the related industries make concerted efforts to engage. The development of the biologics industry achieved through the pan-government support and PR activities based on creative mindset ceaseless research by academia and research institutions, and attention from the public will result in powerful operation of the engine of the creative economy and subsequent productive outcomes in an ongoing virtuous-cycle structure.

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