Informist, Wednesday, Aug 14, 2024

By Apoorva Choubey and Alina Geogy

MUMBAI – Biocon Biologics Ltd will sustain the momentum in revenue growth in the current financial year on the back of market share gains in key biosimilar products in advanced geographies, Managing Director and Chief Executive Officer Shreehas P. Tambe said. The subsidiary of Biocon Ltd also hopes to keep operating margin in mid-20s in the coming quarters, Tambe told Informist in an interaction.

The company, which is the largest revenue generating arm of Biocon, has eight products that it currently markets across the world and 12 new assets in various stages of development. The US Food and Drug Administration defines a biosimilar as a biologic medication which is highly similar to an original biologic medication already approved by the agency. Biosimilars are made from the same types of sources as biologics, which is, living cells or microorganisms.

Biocon Biologics sales rose 3% on year to 20.8 bln rupees during Apr-Jun, owing to healthy traction across key products in advanced markets, such as anti-cancer monoclonal antibody named trastuzumab, and insulin glargine. Biocon Biologics contributes around 59% to parent Biocon's consolidated total revenue.

On a like-for-like basis, excluding the discontinued operations that have been sold to Eris Lifesciences, Biocon Biologics' revenue grew 11% on year in Apr-Jun. If one were to exclude the impact of one-time licencing income in the base quarter, the sales grew 19%, Tambe said.

The sales growth will continue through the year, because it is coming on the back of market share gains, which is sustainable in nature, Tambe said. He highlighted the growth in market share of biosimilar Pegfilgrastim, which is branded Fulphila, from sub-10% to 21% in the US over the last year or so. The company's anti-cancer drug Trastuzumab has also seen market share grow to 15-16% from around 9-10%.

The company's insulin glargine product also has a sizeable overall share of about 15-16% in the US. In Europe, too, the company commands significant market share in biosimilar products it sells in Belgium, Germany and France.

Biocon Biologics intends to launch six new products in the US over the next two years, some which are going off-patent. It also plans to launch four new products in other markets, including Europe, over the same period. These products include monoclonal antibodies Ustekinumab and Denosumab, as well as cancer drug Aflibercept.

Nearly 70% of Biocon Biologics' revenues come from advanced markets, which include North America, Europe, Japan, New Zealand and Australia, while emerging markets make up for the remaining 30% of the sales. "There aren't many companies which have that kind of opportunity in the next two years," he added. These are multi-billion dollar assets that will lose exclusivity and that presents a huge opportunity for Biocon Biologics, he said.

These product launches would be subject to regulatory approvals. Some of these launches are linked to approvals for its facilities in Malaysia and Bengaluru, which the company is confident of securing soon and is in the process of addressing recent observations made by the US FDA.

The company continues to target mid-20s operating margin, Tambe said. For the June quarter, Biocon Biologics' operating profit or earnings before interest, taxes, depreciation, and amortisation, was 4.7 bln rupees with an EBITDA margin of 23%, excluding the one-off gains.

Biocon Biologics will continue to invest in research and development, at a pace of around 8% of revenue. This is lower than 10-12% of R&D spend the company was keeping up in the past, as the revenue base has grown significantly in recent quarters and thus, the investment may appear smaller as a percentage of sales.

The company is confident of being able to make payments that are due to Viatris Inc in coming quarters. Biocon Biologics had acquired the biosimilar business of Viatris for $3.3 bln. Of this, the company had paid $2 bln in cash, $1 bln in stock and the remainder was a deferred payment.

Biocon has also prepaid $200 mln of debt in December and another $50 mln this year. The company's aim is to cut debt as soon as possible, Tambe said. The company's debt stood at around $1.2 bln at the end of June, reports said. Today, shares of Biocon ended 2.8% lower at 327.65 rupees on the National Stock Exchange. End

US$1 = 83.95 rupees

Edited by Deepshikha Bhardwaj

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