This March Russian officials approved RUB 120 billion (about $3.9 billion) toward its Pharma-2020 program, which covers domestic drug R&D and manufacturing.[© Xuejun li - Fotolia.com]
Addressing investors recently at the “Russia Calling! Investment Forum,” Russian Prime Minister Vladimir Putin included biotechnology among five business sectors on which his nation and its economy are counting to deliver fast growth over the next several years.
“4% is not good enough,” Putin declared in October. “We shall aim higher on the back of domestic demand, an improving investment climate, and greater investment efficiency. The ultimate goal is to diversify the economy and create high-tech jobs.”
Putin spoke six months after committing Russia to growing its biopharma industry to a 5% share of the global market by 2020, up from just 0.2% this year. In March, Russian officials announced approval of RUB 120 billion (about $3.9 billion) toward Pharma-2020. The program, approved but not funded in 2009, calls for boosting investment in Russian manufacturing capability, growing the market share of domestic drugs from 20% to 50%, and creating more high-skill jobs to elevate Russia’s pharmaceutical industry. To build demand for domestic drugs, doctors who prescribe them are entitled under Pharma-2020 to greater reimbursements than for using imports.
A few months earlier, through the Russian-based Association of International Pharmaceutical Manufacturers, global giants made a commitment of their own, namely to spending $1 billion toward boosting the country’s biopharma production capacity.
The results were evident in June, as Novartis broke ground on a pharmaceutical manufacturing plant in St. Petersburg as part of a $500 million, five-year investment in Russia. Additionally, AstraZeneca started constructing a $150 million manufacturing plant in the Kaluga region. Sanofi already operates an insulin plant it acquired last year from Polish-based Bioton. And Swiss-owned Nycomed plans a $93 million API facility at the Novoselki industrial park in Yaroslavl set to open in 2014, while Novo Nordisk intends to build a $100 million insulin plant in Kaluga.
“We believe these developments will succeed in the future,” Artur Isayev, CEO of the Human Stem Cells Institute (HSCI), a Moscow-based public company, told GEN through an interpreter. “In Russia, there are many professionals for the biotech industry, well-educated, with a good track record and professional educational background” in specialties that include medicine, biology, and even other scientific fields, he said.
Do you think Russia will achieve its goal of increasing its biopharma industry to a 5% share of the worldwide market by 2020?
As Russia continues to play catch-up in biopharma, the billion-dollar manufacturing push and Pharma-2020 add credence to the view that Russia may finally be serious about building a world-class drug development industry on par with its stronger nanotech and much stronger oil and gas sectors. “For about three to four years, we have seen many investments from the Russian government and much attention to the sphere,” Isayev noted.
One of Russia’s most significant investments in biopharma, announced in August, was made in the first-ever Russian-led joint venture in biotechnology. SynBio is a RUB 3.2 billion (about $104.15 million), four-year public-private partnership led by HSCI that plans to market both first-in-class and next-generation biosimilars, or “biobetters.”
The public portion consists of RUB 1.3 billion (roughly $42.31 million) from the Russian Corporation of Nanotechnologies (Rusnano), which holds a 41% stake. Rusnano is a $10 billion Russian Federation-owned fund designed to finance nanotech and other high-tech companies. HSCI, which holds a 28% stake in SynBio, was joined by Russian-owned Pharmsynthez, U.K.-owned Lipoxen, and German-owned SymbioTec to hold the majority private stake in SynBio, using cash, stock, and intellectual property.
Isayev said SynBio plans to bring to market in 2015 the first of nine medicines under development, based on three biotechnology platforms: Histone for drugs based on recombinant human Histone H1 for oncologic and other diseases; PolyXen® for biobetters aimed at diabetes mellitus, Alzheimer disease, chronic kidney disease, and other diseases; and cell therapy Gemacell to fight liver cirrhosis.
Established in March 2011, Rusnano has built a portfolio that includes two nanobiotechnology companies with the same co-founders. Rusnano invested $25 million in BIND Biosciences, a clinical-stage company that is using its Medicinal Nanoenginering™ platform to develop new targeted therapeutics called Accurins™ against cancer, inflammatory diseases, and cardiovascular disorders. Rusnano has also invested $25 million in Selecta Biosciences, which is developing synthetically engineered vaccines for smoking cessation, type 1 diabetes, infectious diseases, cancer, and allergies.
Both companies were co-founded by Omid Farokzhad, M.D., of Harvard Medical School and Robert Langer, Sc.D., of MIT. Selecta has a third co-founder, Ulrich von Andrian, M.D., Ph.D., head of the immunopathology laboratory at Harvard Medical School.
Another Rusnano-funded company, BiOptix Diagnostics is a maker of label-free biodetectors. It won $4.5 million from Rusnano, accounting for half the $9 million it raised in a series B financing round. U.S. drug companies are very much on Rusnano’s radar as well: The fund this year invested $26 million in Panacela Labs, a subsidiary of Cleveland BioLabs.
Among the most recently announced biopharma partnerships is a joint venture of two global giants focused on HIV that is expanding manufacturing capabilities in Russia by teaming up with a domestic pharma company. Viiv, a venture of GlaxoSmithKline and Pfizer, agreed to supply bulk products, technology, and expertise to Russia’s JSC Binnopharm, which will carry out secondary manufacturing and packaging of HIV treatments Combivir, Kivexa, and Epivir.
The deal, announced in November, follows separate production agreements forged over the past year by each Viiv partner. GSK previously agreed to supply Binnopharm with bulk supplies of vaccines for cervical cancer, pneumococcal, and rotavirus, as well as supply the Russian company with production know-how and technology; Binnopharm in return would secure regulatory approvals. And in March, Pfizer agreed to have its pneumococcal vaccine produced in Moscow by a Russian partner, Petrovax.
In May, Roche granted TeaRx development and commercialization rights for a treatment for patients at risk of thrombosis in Russia and 12 other nations. Roche agreed to provide TeaRx with clinical candidates belonging to a new class of oral Factor Xa inhibitors and manufacture the API for early clinical studies in the U.S. TeaRx agreed to launch clinical studies next year and will be responsible for development and final formulation in Russia.
“Clinical studies are expected to take place from Q3 2012 in Russia, first as a dosing and safety Phase II study in patients after knee and hip replacement and then a double-blinded Phase III study in such patients,” Henrik Konarkowski, TeaRx’ CEO, told GEN. “A first drug, an oral prophylaxis for thrombosis after major orthopedic operation should be available to hospitals and patients in 2014.”
TeaRx is looking at marketing the prospective drug in 12 countries of the former Soviet Union, mostly in Russia, Belarus, Ukraine, and Kazakhstan. “After prophylaxis from thrombosis after elective orthopedic surgery, pulmonary embolism and deep vein thrombosis will be the next indications to be treated by the same drug,” Konarkowski said.
“A new formulation may be developed for a final indication of prophylaxis from stroke for patients in risk group,” he added. “TeaRx is already cooperating with major patient organizations in Russia in preparation of large long-term clinical trials in this indication.”
He said TeaRx is also in talks with several Russian and western biopharma companies to add more drugs to its portfolio: “They could be in similar product lines (other anticoagulants) but with different modes of actions. The company is also deliberating to venture into treatment of patients after stroke, therefore moving into the CNS market segment.”
Russian companies, according to Konarkowski, need to jumpstart their pipelines by licensing promising projects from western big pharma companies and developing them at home until they’re ready for market registration. In this respect, he said, TeaRx is following the example set by the Viriom collaboration of Roche and Moscow-based investment and R&D group ChemRar. TeaRx is located at the ChemRar High Tech Center.
ChemRar is a complex of biopharma research, production, and investment facilities located in Moscow near Sheremetyevo International Airport. At last summer’s BIO International Convention, ChemRar and Pfizer announced a collaboration focused on developing drugs and vaccines for cardiometabolic, infectious, and oncological diseases through technology transfer and out-licensing deals with venture funding.
While global corporate giants and smaller Russian companies have launched numerous partnerships to fulfill both Pharma-2020 and the billion-dollar commitment, Russia is still likely to lag behind China and some other nations emerging as key biopharma players unless it plays to its other strengths such as its sizeable oil and gas industry and its nanotech sector, which is second only to the U.S. in terms of investment.
On the biofuel front, Rusnano earlier this year made a $35 million investment in U.S.-based Joule Unlimited toward building a research center in Russia as well as improving its technology, which produces fuel using carbon dioxide and sunlight. As for leveraging nanotech, Rusnano also played an active role in creating a nanobio cluster through its investments, which also serve to maintain a larger government role than is seen in the U.S or Western Europe. As important as drug discovery may be, Russia can ill afford to develop biopharma at the expense of nanobio or biofuels.