Biocon’s biologics business surges on US demand

BENGALURU: The US will be the biggest market for Biocon’s biologics business as it seeks to reach $1 billion in revenue in the next two years, the segment’s chief executive Christiane Hamacher said.
Biologics has been the fastest growing business for the biopharmaceutical company, reporting growth of 50% for the nine months of this fiscal, compared to the same period a year earlier, to touch Rs 1,594 crore revenue.That is more than the Rs 1,517 crore recorded in the whole of 2018-19.
“All our strategies are in place for that target (of $1 billion). Pegfilgrastim will increase its market share in the US and we also expect Trastuzumab, which was launched last month, to rev up its contribution,” Hamacher said, referring to the two biosimilars for cancer treatment. She did not disclose how much of the target would come from the US.
Biosimilars are biologic products, made inside living cells, and has no clinical differences in terms of safety and effectiveness from the main product. They are however not considered duplicates, like generics, by regulators as it is impossible to manufacture exact copies of biotech drugs.
Biocon’s biosimilars, the first of which was launched in 2016 in Japan of insulin Glargine, has become the driving force of the company’s topline, with more of these products finding acceptance in the mature markets of Europe and the US, as also other countries. The company currently has 28 biosimilar molecules in different stages of development.
Hamacher added that revenue should receive further boost from the launch of insulin Glargine in the US in the second half of the year. That assumes significance at a time when the cost of insulin has shot up in the world’s biggest pharmaceutical market, so much so that as many as one in four people with diabetes are now skimping on or skipping lifesaving doses.
Another Biocon drug, Fulphila – used to control certain side effects in patients undergoing chemotherapy – already has an 18% share of the US market for such drugs. The company says it is a high volume but low value product compared to Traztuzumab which is costlier and has a higher revenue earning capacity.
MB Chinappa, CFO of Biocon Biologics, said the necessary R&D spends to be made for the $1 billion target has already been done. The business already yields higher margin (33%) for the company than the overall operating margin (27%).