Diving Deep into Oral Biologics with Gregor Kawaletz (DCAT 2023)

Gregor Kawaletz, head of OSD Business Unit at Recipharm, sat down with Grant Playter, associate editor, to discuss the immediate future of oral biologics. A full transcript of the interview can be found below.

Interview Transcript

Gregor, traditionally oral dosage has been deemed infeasible for biologics. Can you just talk a bit about why we're chasing approvals on this technology? What's so alluring about it over traditional injections?

Gregor Kawaletz: Indeed, this area is relatively new to the pharmaceutical industry, and we all know biologics and we all know that biologics are injected. Having said that, there are several challenges.

First of all, people in reality don't like to be injected. Second, the administration is rather complicated and expensive. This has nothing to do with the good products. They are. Just the administration itself usually you cannot do it yourself, or if you can do it yourself, it is quite expensive because it is not just a syringe — it is usually a prefilled syringe. This is usually put like an autoinjector or a cartridge, so you can just shot it in your body. This is actually not a big fan to anyone.

Over years, the science figured out that there are some molecules which can be orally delivered. The market for now is already $7 billion, which is not that few, but compared to this huge, huge pharmaceutical market, it plays a kind of niche role. The good side of the story is that the oral biologics have a CAGR of more than 20% every year.

Because what the companies figured out and what the science figured out is if we have a sterile product, which is successful on the market, but we see the costs are so expensive, how we can make it happen that it will be cheaper, and by that available for a larger population. Because we know, especially in the US, that there are limits in terms of accessibility to different product branches. By using oral biologics and the orally delivered route, it is much easier to get reasonable cost, and by that reasonable prices, and accessibility to these kinds of products will be in future much higher.

This is actually the secret behind. I'm talking to different companies which have biologics in the portfolio. I see not at this point a huge run to that, but a tendency that people start to consider what we can do from lifecycle perspective, from a kind of life extension perspective. Because those products are going earlier or later to be generic or biosimilars in this particular case which is maybe the correct expression. But if they can use the same drug substance in a different delivery form, then the extension of the patent protection will be longer, and the price will be still less, but the competition can be, let's say, excluded for a while for good products.

This is where we are at this point in time. I see this clear way forward and I see a certain dynamic in it. What I see from supplier perspective, there are not too many players at this point in time where the market could say, if I am going to develop this kind of product, I need to go to A, B, or C. The market is completely decertified and therefore different players are doing something. We would like to play in future a much more important role in this game. Maybe if we are, if we are successful to become a kind of front runner where people cannot avoid coming around us.

The development has been steady on oral delivered biologics, but we haven't really seen any FDA approvals. I know science takes time. We all know that. But can you just talk about what is so difficult specifically about this technology and what makes this hard to deliver in an oral format relative to say a small molecule drug?

Kawaletz: It's an excellent question. The answer is not that simple because large molecules have different chemical terminal and physical behavior than small molecules. A large molecule, by nature, has a certain size. A certain size of the molecule you need to multiply and being able to get it in a kind of form orally delivered, which is not too big to swallow to get it through the mouth, if you will.

Then the second challenge is how to get it through stomach, which with the acid is destroying almost everything. They are first companies, which found very good solutions delivering the product through the stomach to the enteric system and released. What you potentially need to know in the enteric system, we have different pH levels. Scientists are able meanwhile to get a released product in a certain pH level. This is like push the button and in a certain area of your enteric system, the product is released and is activated what it has to do.

Other products have a different profile. This is the beauty in oral delivered products, you can manipulate the release profile and get just released a little bit of something in a certain area and a few hours later in a different area, another release and so on and so forth. There are a kind of variety possibility how to use that. But the challenges are still there. But I clearly see the first companies have kind of proprietary technologies enabling at least a portion of the product wrenches to get orally delivered. For now, status quo, not all biologics, especially the large ones can go can be orally delivered. But the number and the size of the products in future should grow by using different technologies which are now in a very early stage and even not commercially viable at this point in time.

Can you just talk a little bit about what Recipharmis doing with oral biologics?

Kawaletz: So far Recipharm in the business unit of oral solid so far is dealing mainly with oral small molecules. However, we figured out already sometimes ago, and this is clear a part of our strategy to address this topic to our potential clients and raising our hands. Guys, if you have something, you can come to us because we have the right scientists on one hand. We have the right background and we have technologies being able to entertain these kind of products.

What you need to consider there are two aspects to that. The small molecule, let's say analytical methods are very different to biological analytical methods. Since we made some acquisitions in the biological area with Arranta Bio, Vibalogics, and GenIbet, we, let's say inherit the know-how, how to analyze these biological products to get the right results. By using this know-how with our oral capabilities, it is a kind of wonderful synergy effect allowing us to use the best from those areas.

Bear with me for a second here because this can take a little context. From what I'm gathering, what you're saying, a big part of the appeal of oral biologics is like say you're on insulin and you have to get frequent injections. That's a burden. It's just a pain to get to. You have to get injected. It's weekly. One of my coworkers actually she has to deal with that. She's out of the office two days a week because she has to.

With that being said, science takes time. Would you see at the beginning that we're going to lean more towards say like smaller batch manufacturing of like say a relatively expensive single dose medicine? Say these personalized vaccines that we're talking about to supplement development, manufacturing costs. If so, where do you think the future is for when we get to the large scale widely produce medicines that are currently injectables but could be solid doses?

Kawaletz: Both excellent questions. Let me start with oral biologic insulin because indeed we have a collaboration with a British company, which is a frontrunner and successfully delivered phase IIB results as a global number one in getting insulin orally delivered to the body.

As we all know, the injected insulin makes damages in the body. The side effects long time are unfortunately not very pleasant to the patients. This particular technology allows to reduce massively the side effects and getting a much better life quality. The capsule is literally very little. It is capsule number three. It is like that. Easy to swallow and have excellent, excellent results out of the phase IIB. Now they are looking for investors as many startups are doing to entertain phase III.

The good thing is they have a platform technology where they can put also GLP1, which is another biologic product against obesity where they are started already phase one clinical studies and they were also, again, very successful. With this thing, we will be able to entertain at a certain point in time these large volumes in biologics, which will be indeed a very large because this may become a game changer for the entire industry in this particular area.

Then your other question was exactly the right one because globally what we see is a kind of tailor shaped, or patient shaped, products. We do not have one fits all. Like the entire population can get, let's say aspirin because it's more than 100 years of the market so we can talk about it. Everybody use it and it used and it works anyhow. Now, in future we are going to have much smaller product ranges, which will be very much dedicated to the patient group which need those kind of products. From this perspective, and this is not just related to oral things, but also to sterile products that the quantities in future will be rather smaller. The product will be very much related to the clients and maybe just a site root to the sterile thing. Because during the pandemic, we've seen that all companies without any exceptions have invested in huge drug substance capabilities and capacities. Huge high speed lines for getting all those vaccines through the facilities.

What none of them have considered at all is what happened after the pandemic. After the pandemic, the world changes. It happens with all pandemics. They are starting, they are heavy, they are big, and they are dropping at a certain point in time. Now the industry is suffering massively with underutilized huge filling clients and huge drug substance capacities. In reality, almost nobody was considering what will happen after the pandemic. This is investing in flexible, smaller lines and equipment to entertain exactly what you say, products which will be very dedicated to a smaller group of patients. This leads us to the next generation of products which will come on the market, which are gene cell therapies and immunotherapies which per se have just maybe a kind of 10,000 patients, maybe 15. But for sure not 100,000 or 1 million. This is where the industry for sure will go to.

That's a super fascinating point because this is not even pharmaceutical necessarily, but you look at these tech companies they're having these layoffs. I know CEO of Facebook was talking about how they hired so much during the pandemic because like vaccines, they were seeing an increase demand for social media. But now they're having a crunch because they have to lay off these employees. It's fascinating how we can see where others are zagging and try to invest in those leftovers from what the pandemic brought.

Kawaletz: At the end of the day, I think with this last pandemic it has been opened like a box of Pandora unfortunately. We will see in future more pandemic circumstances and there will be on one hand this will happen 2020/2022. But there will be also other infection diseases which may become a big threat. Diseases which most likely you never heard about. Chikungunya, yellow fever, dengue fever, Zika virus and many others. We even do not have any idea what they are. But with the mosquitoes which are going north and norther, they are infected by these viruses and they may have much more impact on the human kind as they had in the past. We as a human kind are going more and more in untouched areas in this world, which may bring us in touch with virus seeds and virus arts which we never met before, which can become a tricky stuff for us.

From this perspective, at a certain point in time, these huge volumes and high-speed lines will be needed. But the question would be is it economically reasonable to have them in the site unused or should also governments consider this critical area and support companies in keeping those lines running or at least active in case something is coming up. They can push the button and have immediately activities and can support the human in fighting these kind of diseases.

If you had to predict, and obviously this is a non-binding agreement, when do you think the first oral biologic is going to hit the American market?

Kawaletz: That's an excellent question. That's an excellent question. If we are talking about the insulin which passed through already phase IIB, then we could have the first, and an insulin biologic product, have it already ‘27 on the market. Not that far from now. If we talk about other biologics early-stage development, it will take already much more year, so rather 2030 and beyond. But if we go in this area, GLP1 and in insulin, I'm more than convinced that 27 we can have the first oral biologic on the market. Recipharm is expecting the first oral biologic out of our GenIBet facility in 2024.

Just building off that a little bit, because you talked about this insulin product in detail. If you're predicting it hit the market in four years, are you confident that you hit on the science that will make this a reality?

Kawaletz: The science is the science. But I'm personally so much convinced in this product because this will bring a huge advantage to the patients. I think it's not a fun to be injected every single day or having somewhere a pump which is putting the insulin in your body. Unfortunately, even children are already impacted. To explain it to a child, you need to have a pump or you need to be shot every day. I don't think it's fun. Just from this quality-of-life perspective, it is something all of us should be concentrated on.

Since the phase IIB results were so incredibly good, the risk to fail is rather minimal because you are always in clinical studies comparing stuff to other products on the market. In this particular case, you are comparing to injected area. From side effects perspective, from a functioning perspective, from biopotency and bioavailability, they are far away ahead with the proprietary technology they have invented themselves. From this perspective, I'm very much convinced it will happen. But, indeed, we are in unpredicted time in a macro economical and global situation which we don't know where we are going to. The only threat they could be not on time on the market would be they are not able to collect money on time. This is the only thing, but from a scientifical area, I'm more convinced it will fly.

This is normally when I would ask you as I ask everyone if you have any bold takes. I think we can skip that question. I think we've gotten those. Do you have any final thoughts to share?

Kawaletz: I think yes, indeed. I think the pharmaceutical world especially these days with inflations, with all those things which are coming on us, is in a very much transformation area. The areas are from one perspective, the financial ones where there is big pressure on companies.

What we need to consider in the past pre-pandemic, not the big companies were fitting these thousands of CDMOs. But rather startups, small companies, which were entertaining in parallel 6, 7, or even 10 projects because the money were cheap to be reinvested. Since those startups did not have GxP capabilities, they were outsourcing a lot of those things. Now by this situation, they are shrinking the product portfolio and are much more cautious and are developing rather conceptual instead of in parallel, which means that the market in the next time will be more challenging to get everything on track.

Gregor, I have a million more questions I could ask you, but I'm going to be cognizant of your time. Thank you so much for taking the time speaking to us.

Kawaletz: Thank you. It was big pleasure talking to you.

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