Thus, a favourable opinion now would pave the way for launch of these products by the end of FY19 and FY20.
“The EU CGMP certification removes a major overhang on both the biosimilars as the approvals appear more certain and the likelihood of Biocon
participating in both the biosimilar opportunities at market formation increases significantly,” said analysts at Citi.
Improving product launch visibility enhances the company’s earnings growth prospects. With the approval for its insulin, Glargine in Europe and in-licensing arrangement of its autoimmune disorder biosimilar, adalimumab, already in place, the company may be able to monetise the two in Europe during FY19 itself along with biosimilar, Pegfilgrastim (both in Europe and US). Consequently, the company’s biosimilar revenues could grow multi-fold from current levels. Analysts at Morgan Stanley estimate biosimilar revenues to surge from $120 million in FY18 to $475 million by FY21.
The stock, which is trading at rich valuations, has seen some correction in the last one month. But, given the one-year price targets of Citi and Morgan Stanley, there is a potential upside of 15-25 per cent from the current levels.