Biocon has once again reported a strong growth in the net profit and revenues for the third quarter. Kiran Mazumdar-Shaw, chairperson and managing director, explains the reasons for its strong growth to FE’s Mahesh Kulkarni. Edited excerpts:
What led to the strong growth in third quarter?
Biocon reported revenue growth of 32% Y-o-Y at Rs 1,092 crore in Q3FY17, which was led by a robust growth of 61% in the biologics business, 24% growth in small molecules, and a 17% rise in research services revenue.
Licensing income more than doubled Y-o-Y to Rs 79 crore and other income rose 88% to RS 63 crore.
We reported robust growth in our biologics business with both insulins and biosimilar MAbs gaining traction in Japan and key emerging markets. Biocon commenced commercial operations from its Malaysian manufacturing facility and launched rh-Insulin in Malaysia under the government’s offtake agreement (OTA) initiative.
Q3FY17 saw a strong contribution from our international business wherein we supply both active pharmaceutical ingredients (APIs) and formulations across our small molecules and biosimilars segments. The small molecules business revenue growth was led by good traction in its business in India, Europe, LatAm and NAFTA for statins, immunosuppressants and specialty products.
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What led to the strong performance of the biologics business in Q3FY17? Do you expect this momentum to sustain?
The biologics business had a strong Q3, reporting a growth of 61% to R120 crore, driven by both insulins and biosimilar MAbs gaining traction in Japan and key emerging markets. The Insulins business grew on the back of an expansion in commercial footprint and increased traction in some of the key emerging markets. Biocon’s ready-to-use, pre-filled disposable insulin Glargine pen, launched in Japan in Q2, continues to do well with increase in market share. The product has been introduced in a few more emerging markets this quarter.
We expect our biologics business to continue on its strong growth trajectory as we ramp up sales of our generic insulins and biosimilar MAbs through deeper penetration in existing markets and opening new markets in the medium term. The commercialisation of the Malaysia plant is expected to augment our capacities which will enable us to address growing patient needs globally.
What does Malaysia facility commercialisation mean for you?
The commercialisation of the Malaysian facility is a key milestone for Biocon. This is Asia’s largest integrated insulins facility which has been set up with an investment of $250 million and will enable us to address the global need for high-quality affordable generic insulin and analogs. The new facility will help us meet the demand for insulins in several emerging markets including the Latin America and the West Asia regions, which we were unable to service for the last couple of years because of capacity constraints at our Bangalore facility.
The plant commenced commercial operations with sales of rh-insulin to the ministry of health, Malaysia, this quarter under a three-year MYR 300 million (Rs 460 crore) contract. Several regulatory filings and audits are already underway to enable commercial sales from the new Malaysian manufacturing facility to these markets.
How is your insulins business doing globally besides Glargine launch in Japan?
We currently have approvals for rHI in over 60 emerging markets and for glargine in over 20 emerging markets. We continue to work on taking our insulin products to various markets. Given the diabetes prevalence, increased presence will help us reach patients in more places across the globe.
Could you provide us an update on the progress of your other key biosimilars programs?
Biocon with its global partner Mylan made good regulatory progress in its biosimilar and insulin analogs global development programs. The two companies are co-developing a high-value portfolio of six biosimilars for oncology and autoimmune indications — Trastuzumab, Pegfilgrastim, Adalimumab, Bevacizumab, Etanercept and Filgrastim — and three generic insulin analogs — Glargine, Lispro and Aspart.
Collectively, these represent a global addressable market opportunity of about $60 billion at current reference product pricing. Our marketing authorization applications for proposed biosimilar Trastuzumab, Insulin Glargine and Pegfilgrastim have been accepted by the European Medicines Agency for review.
In the third quarter of FY17, the USFDA accepted for review our first biologics licence application (BLA) for the proposed biosimilar Trastuzumab. The USFDA filing for Trastuzumab is a major milestone for us as this is the first US regulatory submission through Biocon and Mylan’s joint global biosimilars program. We have cumulatively made four regulatory submissions in the developed markets of Europe and the US for our proposed biosimilars of Pegfilgrastim, Trastuzumab and Insulin Glargine.