[Edaily Reporter SONG YOUNG-DOO ] With the official announcement of the Phase 3 clinical trial exemption for biosimilars, biosimilar companies are busy crunching the numbers. On the 14th, South Korea’s Ministry of Food and Drug Safety (MFDS) implemented a notice exempting companies from submitting Phase 3 clinical trial data if quality, non-clinical, and pharmacokinetic (PK) equivalence are sufficiently demonstrated; the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA) are also taking similar steps.

In fact, on the 14th, Celltrion prematurely terminated the European Phase 3 clinical trial for its Keytruda biosimilar (CT-P51) and voluntarily withdrew the trial protocol it had submitted to the European Medicines Agency (EMA). This marks the first instance of a company immediately revising its development strategy in response to regulatory changes.

Investors and the industry are closely monitoring the impact of the Phase 3 exemption. Some observers predict that this will open up opportunities for small and medium-sized biosimilar companies that have previously been overshadowed by large corporations. This is because the elimination of Phase 3 clinical trials—which account for more than half of development costs—significantly reduces the financial burden. On the other hand, the prevailing view is that this change will further intensify “business competition” rather than “development competition,” and that the position of large corporations—which have secured ample capital and possess extensive pipelines and commercialization systems—will become even more solidified. Ultimately, this means that success will be determined not by clinical trials, but by quality, production, supply chain, and global sales capabilities.

CMC, Not Phase 3, Now Determines Approval… The Threshold Hasn’t Lowered; the Standards Have Changed

In the biosimilar sector, Phase 3 clinical trials are large-scale studies involving hundreds of patients to compare efficacy and safety with the originator drug. They account for more than half of total development costs and take several years to complete.

The U.S. Food and Drug Administration (FDA) recently released a draft of its “Guidance on Streamlining Biosimilar Development,” stating that Phase 3 clinical trials can be omitted if certain requirements are met. The EMA has also indicated that it may grant approval without Phase 3 trials if equivalence can be demonstrated through quality analysis. The key point of this MFDS notice is that, rather than Phase 3 exemptions, the focus of approval has shifted from clinical trials to CMC (Chemistry, Manufacturing, and Controls) and analytical equivalence. While Phase 3 trials can be omitted if quality and pharmacokinetic equivalence are sufficiently demonstrated, the consistency of the manufacturing process and analytical data must be proven with far greater precision than before.

Celltrion(068270)The company has already adjusted its strategy. It terminated the European Phase 3 clinical trial for “CT-P51” early and voluntarily withdrew its trial protocol from the EMA. Previously, it had submitted an amendment to the U.S. Food and Drug Administration (FDA) to reduce the number of patients from 606 to 220, and on the same day, it initiated the European clinical trial amendment process for its Darzalex biosimilar (CT-P44).

An industry insider stated, “In recent biosimilar development, the importance of comparative efficacy trials has diminished somewhat, while development and review based on quality equivalence have become increasingly important,” adding, “Rather than the CMC data required by regulatory agencies having changed significantly, the key competitive factor for approval is now how thoroughly equivalence is demonstrated through quality and analytical data.”

The importance of manufacturing competitiveness is also expected to grow. The source explained, “Regulatory agencies place greater emphasis on GMP standards, quality systems, process consistency, and regulatory compliance capabilities than on whether a company owns its own manufacturing facilities,” adding, “Even when utilizing a CMO, a company’s competitiveness will hinge on how effectively it can control manufacturing processes and quality data.”

Ultimately, the industry assessment is that the bar for approval has not been lowered; rather, the focus of the review has shifted. Whereas equivalence was previously demonstrated through large-scale clinical trials, an era has now begun in which sophisticated analytical data and manufacturing process consistency will determine a company’s competitiveness in securing approval.

Large Companies Have the Edge Over SMEs… “Commercialization,” Not “Development,” Is the Deciding Factor

Some expect that the exemption from Phase 3 clinical trials will reduce development costs, opening up new opportunities for small and medium-sized biosimilar companies. However, the industry’s perspective differs.

An industry insider emphasized, “Reducing the clinical trial burden is clearly a positive change for the industry as a whole. The biosimilar industry doesn’t end with successful development. It’s a business that requires full-cycle capabilities, from production and supply to approval and global sales.” They added, “While regulatory easing may lower initial barriers to entry, the competitiveness of large companies like Celltrion(068270)and Samsung Bioepis—which possess production capacity, quality management systems, regulatory approval experience, and global commercialization capabilities—will ultimately stand out even more.”

In fact, if clinical trial costs and time are reduced, large companies can reinvest the saved resources into securing additional pipeline candidates. On the other hand, even if small and medium-sized enterprises (SMEs) skip the clinical trials, they must still overcome new barriers such as establishing CMC (Chemistry, Manufacturing, and Controls), quality control, and navigating global regulatory approvals. While development may become easier, the business itself will actually become more difficult.

Competition for first-mover advantage is also expected to become fiercer than before. An official from a biosimilar developer noted, “Since there are no cases yet where the system has been fully implemented, it is difficult to definitively assess the impact on the market,” but added, “In Europe and the U.S., factors such as brand trust, supply stability, corporate recognition, and price competitiveness all play a role alongside clinical data. The overall trend, led by companies that have secured a strong competitive position in the existing biosimilar market, is unlikely to change significantly.”