Biologics is a broad term used in the pharmaceutical industry to describe a wide range of products of biological origin. According to the FDA, biological products include vaccines, blood and blood components, allergenics, somatic cells, gene therapies, tissues, and recombinant therapeutic proteins.1 For most of the past decade, the number of small molecule drug approvals was greater than that of biologics. However, this trend was broken in 2022, with approximately 50% of drug approvals being biologics and 50% being small molecules.2 Although the total number of new drug approvals decreased by 25% last year compared to 2021, innovation remained high, with a significant fraction of biologics consisting of next-generation therapies, including antibody-drug conjugates, bispecific proteins, cell therapies, and gene therapies.2
Currently, small molecules comprise 90% of all approved pharmaceuticals, vastly outnumbering approved biologics.3 However, the market size between the two tells a different story. In 2021, the United States spent $566 billion on medicines, with 46% of that consisting of biologics.4 With a compound annual growth rate (CAGR) of 12.5%, the biologics market is expected to quickly overtake the small molecule market, with its growth rate of 1.3% CAGR.4 The dominance of biologics in market share comes from their significantly higher price tag. The average daily dose of a biologic is about 22 times more expensive than that of a small molecule.5 In 2022, six of the top ten best-selling drugs were biologics, showcasing the current dominance of biologics in the market.6
Biologics are a product of the biotech industry, and while most people think of Cambridge, South San Francisco, and San Diego as the main biotech hubs in the US, Los Angeles is rapidly growing to challenge their dominance. Los Angeles is a leader in innovation, receiving about $1.4 billion dollars of NIH funding, which is greater than any other county in California.7 Los Angeles also leads the nation in life sciences jobs, employing 187,152 people in the life science industry.  Additionally, the biotechnology sector in Los Angeles is growing at a significant rate, with a 16.2% year-over-year growth.7 These factors position Los Angeles to be a major player in the biotech industry, with much of the innovation in biologics occurring within this city.
This white paper will cover the main categories of biologics, which include antibodies, cell therapies, gene therapies, vaccines, and biosimilars. For each of these categories, we will touch on market trends, discuss areas of innovation, and highlight current companies within the Greater Los Angeles Area.
Ever since the first monoclonal antibody treatment, Muromonab-CD3, hit the market in 1986 to help reverse kidney transplant rejection, the antibody space has exploded in size. As of March 2023, there are 121 approved antibody treatments in the US and or in the EU.9 Of all the different categories of biologics, antibodies are the most dominant with a reported sales volume of $217.3 billion dollars in 2021, not including biosimilars.10 Within the antibody field, monoclonal antibodies consist of the bulk of the antibody market with an estimated global market size of $186.72 billion in 2022 and has a projected CAGR of 11.8% over the next decade.11 In 2022, three of the top 10 best selling drugs were antibodies, with Humira as 2nd, Keytruda as 3rd, and Dupixent as 7th.6 Recent areas of innovation within the antibody field include bispecifics, antibody drug conjugates (ADCs), immunoconjugates, and antibody fragments. Bispecific antibodies are able to bind to multiple target antigens simultaneously and are commonly used in immune-oncology to improve immune cell engagement to tumor cells. ADCs and immunoconjugates aim to improve the lethality of an antibody through the attachment of either small molecules or other biologically relevant groups, respectively. Antibody fragments typically consist of only a small portion of the antibody, which helps improve tissue penetration of the therapeutic at the cost of a shorter serum half-life.12 These new forms of antibodies are more prevalent in cancer indications with half of all antibodies in late-stage clinical trials since 2017 belonging to one of these categories.13 Other areas of interest in antibody therapies include activatable antibodies whose therapeutic effect is triggered at the site of interest to reduce off-target effects and improvements to antibody delivery to specific organs and tissues.14
The Greater Los Angeles area has several companies leading the way for antibody innovation. One antibody platform of particular interest is Amgen’s bispecific T cell engagers, which they acquired from Micromet in 2012.15 Bispecific T cell engagers are a fusion protein consisting of a variable domain for CD3 that binds to T cells and a variable domain for a tumor-associated antigen connected by a peptide linker that aims to engage T cells against tumor cells.16 The first approved bispecific antibody by the FDA was Blinatumomab in 2016, which was a bispecific T cell engager produced by Amgen. Amgen aims to further improve Bispecific T cell engagers through the addition of an Fc domain to extend their half-life. Another company working with bispecific molecules is Xencor, which is headquartered in Monrovia. Xencor has 17 different antibodies in their pipeline and two currently approved in the US.17 Of the 17 antibodies in their pipeline, 10 of the antibodies are bispecifics. The company specializes in antibodies with engineered Fc domains, including those that are bispecific, improve cytotoxicity, improve half-life, and that block activation of immune pathways.
Over the past five years, there has been a consistent rise in the number of clinical trials for cell therapies. Much of the growth in cell therapies has been primarily driven by chimeric antigen receptor T (CAR-T) cell therapies and stem cell therapies, although T-cell receptors (TCR) and tumor-infiltrating lymphocytes (TIL) are also making progress.18 Cell therapy involves the injection, engraftment, or implantation of live cells into a patient to produce a therapeutic effect. Different types of cell therapies, including allogeneic and autologous therapies, are used for various applications such as oncology, cardiovascular disease, orthopedics, wound healing, and others.19 CAR-T therapies are mostly studied in oncology patients, while stem cells are tested in a wider range of patient populations, including those with CNS, autoimmune, metabolic/endocrine, and cardiovascular conditions.18
In 2022, the global cell therapy market size reached $11.5 billion and is expected to have an 18.7% CAGR until 2028.20 Currently, autologous therapies account for the largest percentage of revenue in the space, consisting of 54% of the cell therapy market in 2021.21 The advantage of autologous treatments is the avoidance of immune response issues and enhanced efficacy due to long-term engraftment times, while the benefits of allogeneic cells are that they have better potential for scalable production, less of a chance of disease relapse, and are not dependent on the health of the patient.22 Difficulties in overcoming graft-vs-host disease have limited the use of allogenic cell therapies, however, some cell types such as mesenchymal stem cells and natural killer (NK) cells are better able to avoid recognition by the patient’s immune system.23 Future trends in cellular therapies include the expansion of CARs in additional immune cells and the use of pluripotent stem cells that can differentiate into a wide range of different cell types.23,24
Headquartered in Santa Monica, Kite Pharma is one of the main pioneers in CAR-T cell therapies. They have prioritized developing advanced manufacturing capabilities and currently possess the world's most extensive dedicated in-house cell therapy manufacturing network. Currently, Kite Pharma has two FDA-approved autologous CAR-T therapies, Tecartus® (brexucabtagene autoleucel) and Yescarta® (axicabtagene ciloleucel). Both CAR-T therapies have the same design, but the main difference between the two is the manufacturing process. Unlike Yescarta, Tecartus undergoes a white blood cell enrichment process that is essential for specific B-cell blood cancers such as mantle cell lymphoma, where circulating lymphoblasts are frequently present.25
Another cellular therapy company is Capricor Therapeutics, which is located in Beverly Hills. Capricor's focus is on developing a precision-engineered exosome platform technology that can deliver defined sets of effector molecules with specific mechanisms of action. Capricor is currently developing a Phase 3 clinical trial for their lead product candidate, CAP-1002, which is an allogeneic cell therapy intended for the treatment of Duchenne muscular dystrophy (DMD). The therapy is comprised of allogeneic cardiosphere-derived cells (CDCs), which have demonstrated immunomodulatory, anti-inflammatory, and anti-fibrotic actions that are mediated by secreted exosomes containing bioactive cargo.26 This cargo includes microRNAs that collectively work to reduce inflammation and stimulate tissue regeneration in DMD, as well as other inflammatory diseases.
Compared to other categories in this paper, gene therapies are a relatively new class of biologics that currently have considerable overlap with cell therapies. As of 2022, the gene therapy market was estimated to be approximately $7.3 billion, with a five-year CAGR of 18.6%.27 Gene therapies typically work by replacing a disease-causing gene with a healthy copy, inactivating a disease-causing gene that is not functioning properly, or introducing a new or modified gene into the body to help treat a disease.28 The CAR-T cell therapy Kymriah was actually the first gene therapy approved in the US, as the patient’s own lymphocytes are genetically modified outside the body, then infused back into the patient.29 As of now, the only approved in vivo gene therapies utilize an adeno-associated virus (AAV) vector to transport the gene editing material to its target. There are currently four FDA-approved AAV-transported gene therapies, which include Adstiladrin for non-muscle invasive bladder cancer, Hemgenix for the treatment of adults with Hemophilia B, Luxturna for the treatment of patients with retinal dystrophy, and Zolgensma for the treatment of spinal muscular atrophy.30 Viruses remain the vector of choice for in-vivo gene therapies, with almost 300 clinical trials worldwide investigating this mechanism of delivery as of the end of 2022.31 Researchers aim to improve the delivery systems of gene therapies by using engineered viral capsids or non-viral nanoparticles to prevent pre-existing immunity or avoid it entirely, as well as improve specificity to the target tissue.32 New modalities in gene therapies include CRISPR-Cas gene editing, base editing, and prime editing to avoid DNA damage, RNA-targeted editing for transient and reversible modification of gene expression, and epigenome editing for cell reprogramming.32
Oculogenex is a company located in La Hembra whose mission is to use gene therapy to improve vision in patients with untreatable retinal diseases. Their platform aims to use a recombinant adeno-associated virus (AAV) to transfer a transgene into ocular cells to treat various retinal diseases, such as geographic atrophy, dry age-related macular degeneration, retinitis pigmentosa, and glaucoma.33 Capsida is another gene therapy company that makes use of engineered AAVs to treat both central nervous system (CNS) disorders and, more recently, serious eye disorders. From their cGMP manufacturing facility located in Thousand Oaks, they are building large-scale libraries of AAV capsids aimed to improve tissue-specificity and tissue penetration.34 Making use of the tissue-specificity of their engineered capsids, Capsida’s CNS program uses an intravenous administration to deliver their gene therapies.
As part of the Patient Protection and Affordable Care Act, the Biologics Price Competition and Innovation Act (BPCIA) was enacted in 2009. The BPCIA established a regulatory pathway for the approval of biosimilar products, which are biological products with highly similar properties to their reference biologic. Already, companies are positioned to produce biosimilars for blockbuster biologic drugs once their patents expire. In 2022, there were seven biosimilars ready for commercialization when AbbVie’s Humira patent expired.35 Last year, the global biosimilars market was valued at $25.12 billion and is projected to grow at a 17.6% CAGR as more drugs lose their patent-protected status.36 Currently, the North American biosimilar market, worth $5.5 billion in 2022, is lagging behind both the European and Asia Pacific biosimilar markets, worth $8.45 billion and $7.14 billion, respectively.36 Since 2007, 30 biosimilars have launched in the US, with 10 more set to launch by the end of 2023.4 The introduction of biosimilars for a biologic into the market has typically resulted in the reduction of total biologic cost by 15-50%, representing a driving force in reducing drug costs in the US.4
Although the biosimilar market in Los Angeles remains small in comparison to biotech hubs such as the Bay Area and San Diego, Amgen is a major player in the biosimilar space and has invested more than $2 billion in the development of biosimilars.37 Currently, Amgen has 11 biosimilars in their portfolio, including Amjevita, a biosimilar for Humira, to combat inflammation and cancers.
The vaccine industry has made significant progress in recent years, with the development of new technologies and innovative approaches. The COVID-19 pandemic has further accelerated the growth of the industry, with vaccines playing a critical role in controlling the spread of the virus. In 2021, the global vaccine market was valued at approximately $141 billion, with $99 billion of that composed of adult COVID-19 vaccines.38 Comirnaty, Pfizer/BioNTech's COVID-19 vaccine, was ranked the top-selling pharmaceutical drug in 2022.6 However, as we move away from the pandemic, it will likely not maintain this position, as it has already experienced a 5% drop in sales from its 2021 levels.6 Some future trends in vaccine development include expanding mRNA technology to other diseases of interest, using adenovirus vectors that mimic a virus infection while generating immunity to a specific viral gene of interest, and improving nano-particle delivery systems for better vaccine antigen presentation.39
Nuravax is a biopharmaceutical company located in Irvine, with a mission to develop vaccines for Alzheimer's and other neurodegenerative diseases. Nuravax plans to achieve this goal through its MultiTEP platform, which employs recombinant proteins containing a string of promiscuous foreign Th epitopes to stimulate the immune system against a broad range of pathogenic molecules involved in Alzheimer's Disease.40 Another company making significant strides in vaccine technology is InvVax, a Pasadena-based vaccine company dedicated to developing a universal influenza vaccine. The challenge in creating an effective flu vaccine is the virus's ability to mutate, resulting in current flu vaccines being only 60% effective each year.41 To address this, InvVax mapped the entire flu genome, located 15 invariant regions where the flu virus cannot mutate, and used those locations to generate their vaccine. InvVax is currently expanding its universal vaccine platform to target other viruses such as HIV, Hepatitis B, and Hepatitis C.
The field of biologics is vast and expanding at a rapid pace and should surpass the small molecule market within the next few years. Advances in recombinant protein technology and gene editing have enabled the rapid pace of biologics innovation, with most biologics categories, as covered in this white paper, predicting double-digit CAGRs over the next 5-10 years. Los Angeles, being a sleeping giant in the biotech industry, is well-positioned to spearhead innovation within the biologics industry in the years to come.
Written by the BCLA Consulting Team
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