At the end of March, Biocon and Mylan had received approval for diabetes treatment biosimilars of insulin glargine from drug regulators in Europe and Australia. Biocon in December received the US Food and Drug Administration’s approval for trastuzumab, a biosimilar to Herceptin of Roche, used to treat breast cancer. With the monetisation process of trastuzumab starting in Brazil and Glargine in Russia, there is an increased earnings visibility.
While Biocon has received approval for insulin glargine, analysts at PhillipCapital say pegfilgrastim and trastuzumab biosimilars could get a nod from regulators in Europe in the second half 2018. Pegfilgrastim is used for patients undergoing chemotherapy. The firm has re-filed its application for the two drugs after completing a corrective and preventive action for its Bengaluru unit in the December 2017 quarter, and should be able to get approval soon. Analysts said pegfilgrastim could be significant in the US, unfolding in the second half of CY18, as the target action date for product approval is in June 2018.
Considering the potential first-mover advantage in pegfilgrastim in the US and subsequent trastuzumab/adalimumab launch in the European Union, Biocon is building a biologic plant spending $200 million in the next 3-4 years. Expansion at its Malaysian plant, too, is continuing. Analysts say the current capacity is sufficient to cater to insulin demand for the next few years.
While Biocon’s Mylan partnership is accruing benefits, its Sandoz pact will be a long-term strategic move to strengthen its biosimilar pipeline.
An analyst at a foreign brokerage says there is a significant upside in 2019, as Biocon is nearing monetisation of its biosimilar pipeline. Those at PhillipCapital see strong traction in its biosimilar initiatives from FY19 and also the scope for value unlocking from potential listing of its biosimilar subsidiary, Biocon Biologics, which could surprise investors positively in the medium term.