Problems and plans of "Biocade"

Dmitry Morozov: the potential of generics will be exhausted within three years

Anna Toporova, TASS

Dmitry Morozov, CEO of the Russian pharmaceutical company Biocad, told TASS in an interview that it was time for pharmaceutical manufacturers to switch to innovative tracks, about the fight against aging, a new program to support the pharmaceutical industry and the company's plans in the Middle East.

– At the Biotechmed Conference you have stated that the potential of generics will soon be completely exhausted. How will the market of original drugs change in this regard, which are most often developed with the money earned from the sale of generics?

– Yes, I told you that within two or three years, the potential for the development of the generic market will be exhausted (drugs having the same composition of active substances, form and effectiveness as original drugs, but not having patent protection - approx. TASS). At the moment when you replace drugs with generics and have a fairly good margin, the question of the head of the company is to be able to properly dispose of this profit.

If in that short period of time, when everyone else is also learning how to make generics, you have time to rebuild the development of your company on an innovative path, then you are more protected. The price erosion in the market of conventional chemical generics is terrifying. It destroys this market – prices fall by 50-60%. All generic companies earn money first, and then a plateau is formed, and the level of profitability decreases, as it was, for example, in Turkey. If you have managed to earn money, you need to reinvest money in the creation of a new original drug or a complex analogue, this is the first. Secondly, it is necessary to go beyond your national market, because the national market is shrinking at a tremendous rate, prices and yields are falling, volumes are growing, and nothing is being earned there. And if you remain on the market, then you actually have no investments left to raise a new layer to make biosimilars, or even more so to start developing original drugs.

The level of investment that you have at your disposal does not allow you to step over this barrier, which is why I said that the potential for the development of generics will be exhausted within two or three years, but during these two or three years, companies should switch to an innovative development path and try to go abroad with their product.

– You remembered about new markets, "Biocad" previously announced plans to participate in the Russian industrial zone in Egypt. Will you localize production there?

– If we find a suitable partner, I do not rule out such a possibility. Biocad, for example, has experience of successful localization in Morocco. There is a very good partner there, with whom we have localized several of our products. They go to those markets where they would definitely not reach on their own: this is middle Africa, the belt of poor countries in Africa.

I can also give an example of Sri Lanka: for our two monoclonal antibodies, we completely displaced a well-known Swiss company there. Our partners are satisfied and are thinking about localizing the bottling of these products in Sri Lanka and getting preferences from the local Ministry of Health.

– Is it necessary to solve logistical problems when entering the Egyptian market?

– Big pharmaceutical companies are looking not only at Egypt, but at the entire global market. Egypt is good, but we think Algeria is even better. Algeria has more attractive prices, and the state spends more on healthcare. And we are building good relations with the oncological community of Algeria, these are very educated people. Or, for example, Morocco is also a very developing country. We have a question of developing a logistics hub in one of the countries of this region. This is true and completely justified, because these countries have their own climate zone. Everyone knows that it's hot there, and our drugs require a special temperature for transportation and storage, we cannot make any compromises in terms of the quality of drugs and logistics chains.

– When can the logistics hub appear and how much do you plan to invest in it?

– We are still discussing this issue. We have the head of the region who will work on this issue. Most likely, we will be represented where there are good logistics chains – in the Emirates or Kuwait.

– How do you assess the investment climate in the Russian biotechnology market?

– When there is a discussion of a bill that directly affects the market regulation, we consider the development scenario. I think that all companies do this because they need to understand what awaits us if the legislative act is adopted.

If the methodology for calculating the maximum selling prices for medicines set by pharmaceutical manufacturers is adopted, according to our calculations, we will not be able to bring two drugs that are currently being expected to the Russian market. In fact, this write-off of about 3 billion rubles is simply at a loss, in addition, 250 young capable employees may find themselves on the market because of such risks. And it's not just me.

The situation is as follows: both the president and the government say that we should develop an innovative direction, export. Next, we read the methodology, and it says there: a limit of 30% (profitability) on innovative drugs. That is, we are developing an innovative drug and cannot set a price with a profitability of more than 30%. At the same time, foreigners have no restrictions at all – as much as necessary, so much will be registered.

This may force us to move R&D centers abroad, because there are no restrictions there. This is an absurdity that will squeeze the energy-intensive industry out of the country.

The second thing that causes dissonance in me is the discriminatory coefficients for market participants. If the original drug costs 100 rubles, and you have made an analog, then you will be able to bring it to the market only 60% cheaper. In the event that the cost of the original goes down, you should also lower your prices.

It turns out that the originator lowers the price before the patent is released and makes it so that I immediately start selling at a loss. What for? I have to stop these projects.

– As far as I know, Biocad has a strong R&D direction, where you develop monoclonal antibody preparations and gene therapy, work with small chemical molecules. What other areas are you currently developing?

– We have two promising areas of research: gene therapy of hereditary diseases and cellular technologies related to the creation of CAR-T. In the latter case, we teach a person's own cells to attack the tumor. In the USA, one whale of such a drug is estimated at $ 500 thousand. 

– What is a whale?

– A whale in this case is a necessary set of biomaterials for the procedure and the algorithm of the procedure itself. And now a similar technology is already available in our laboratories. We are currently working to improve the technology to make it more accessible. In fact, each time it is necessary to make the medicine individually. And we want to transform this approach, that is, to make it so that we produce serial drugs that will suit at least one type of patients with the same disease and similar immune signs.

– And how does this medicine work?

– This is a very complex technology. The ultimate goal is to create a universal "killer" cell. At the same time, we take a cell from one healthy person, modify it and plant it on another. But before we do this, we must remove the mechanisms responsible for the immune response from the killer cell, that is, make sure that it does not cause a harsh immune response in another person and does not attack the patient's healthy tissues. At the same time, killer cells must retain the ability to fight the tumor. That's what we're working on.

– When can this drug appear in hospitals?

– In the future, 6-7 years. This is quite a long time, but if we don't do it now, then in 7 years this drug will simply not be available.

– What other technological groundwork should be highlighted today?

– There are areas that we are also actively exploring. They are associated with RNA technologies - with the chemical stabilization of RNA molecules, packaging them in nanocapsules for further use as a mediator of the human immune response.

– Earlier you announced a number of developments on multiple sclerosis. Is there any movement in this direction. And can we say that these developments will improve the quality of life or increase the life span of patients?

– I think we can talk here about improving the quality of life and reducing relapses.

– The topic of getting rid of aging is considered eternal in our country – almost every pharmaceutical company, biopharmaceutical startup is somehow thinking about how to defeat aging. Of all the variety of solutions to this problem, which studies are closest to you?

– We have a department of advanced research that deals with this. Now studies show that those who were born at the junction of the 70s and 80s have every chance to live to 100-110 years. And this is true, because modern medicine allows you not to die early. How did people die before? Infant mortality, infectious diseases. Then vaccination and antibiotics appeared, it helped humanity to prolong life a little.

Then we realized that the cardiovascular system makes a big contribution to mortality. People die even at an early age from strokes and heart attacks. Serious steps have been taken in preventing strokes, controlling blood pressure, and fighting cholesterol.

Then we see that oncology comes to the fore. Over the course of life, mutations constantly occur in cells, and the older we get, the greater the risk of malignant tumor formation. We must carefully monitor our condition to prevent possible problems and delay the fatal outcome.

The next stage is diseases from which people do not die, but from which life spoils. If you avoid all this, you can live up to 120 years.

– Are pharmaceutical manufacturers discussing a new program to support the Pharma 2030 industry? What vectors will it develop?

– Now we are at a transitional stage, when we have a list of targets (targets) that are of interest to world science, pharma and medicine.

– And which targets are included in this list?

– These are, first of all, checkpoint inhibitors for the future 7-8 years. The Ministry of Health and the Ministry of Industry and Trade have approved promising targets for work on new molecules. Further, the Ministry of Industry and Trade may begin to support the development of drugs from this list of promising targets. We understand that in 5 years there will be such and such drugs, in 7 others. There are no miracles here, drugs are not born out of nowhere. If you want the drug to be available tomorrow, you need to lay the foundation 7 years ago.

– Will the new strategy "2030" also encourage the international expansion of domestic companies?

– It will be import saving, I would say. The creation of drugs that correspond to global trends in the perspective of 5-7 - 15 years.

– When are you planning to sign a special investment contract with the Ministry of Industry and Trade?

– We are in constant contact with the Ministry of Industry and Trade. We haven't signed the terms yet, but we will. We have a great interest in stable rules of the game. The tax climate in the Russian Federation is quite favorable, and I would like to have a contract for 10 years.

– It turns out that you are signing a document with the Ministry of Industry and Trade and with St. Petersburg?

– I think with St. Petersburg too. We are in full contact. We are very comfortable there, and we have a direct dialogue with the city government, direct support from the governor, participate in all seminars and discussions. A good, lively life.

Portal "Eternal youth" http://vechnayamolodost.ru  21.09.2017