Bangalore: India’s best known biotechnology company, Biocon Ltd, is all set to launch its derma or skincare portfolio as it seeks to expand the range of therapeutic segments in which it offers products.
“The first product will be an ointment with immunosuppressants. We will have a tacrolimus ointment to begin with, but (we) will eventually offer a large portfolio,” said Kiran Mazumdar-Shaw, chairman and managing director. “This will be hopefully a frontrunner to launching our psoriasis treatment after it successfully completes all trials.”
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Biocon will also start selling ophthalmology drugs—used to treat complications related to glaucoma and eye surgery—in key US and other developed markets, having launched these in India and other emerging markets in July.
“We will be launching in the US and other developed markets in the next one-two quarters. This is a new area for us and we have a portfolio of prostaglandin analogues like latanoprost, travoprost and bimatoprost,” said Rakesh Bamzai, president, group marketing. “The market potential is around $5-7 billion (Rs23,400-32,760 crore), but it is too early to talk about the impact on our revenues.”
Biocon has a significant presence in four therapeutic segments—diabetology, oncology, nephrology and cardiology.
The company’s stock has surged along with its earnings. First-quarter profit rose 11% over a year ago to Rs77 crore and revenue by 33% to Rs672 crore.
ICICI Securities Ltd, in a post-result update released on 26 July, said Biocon’s strength lay in its strong insulin franchise, position in biosimilars and strong traction in the domestic business, with a better outlook for contract research business. The report said all of this signified good growth prospects for the company and recommended an “add” on the stock.
Biocon shares rose to their most in a year on 24 August, fuelled by speculation about a possible stake sale or an out- licensing deal with Pfizer Inc. for oral insulin.
“These are rumours,” Mazumdar-Shaw said. “A number of companies keep talking to us for various things including partnerships, but that doesn’t mean anything. I won’t comment on market speculation.”
Shares of Biocon closed 2.71% higher at Rs342.60 on Monday on the Bombay Stock Exchange. The benchmark Sensex rose 33.7 points, or 0.19%, to close at 18,032.11.
Mazumdar-Shaw says the momentum in revenue growth reflected in recent quarters is a vindication of the decade-long transition the company has made from being an enzyme maker to a biopharma firm.
“What we are seeing now is the first phase of gestational timeline coming to fruition from the earlier steady but slow growth,” she said. “We now have a strong R&D (research and development) pipeline and we expect the growth momentum to accelerate.”
Biocon gets its revenues from five key growth vectors— the traditional active pharmaceutical ingredients (API) business (which includes statins and immunosuppresants), contract research services, biosimilars (such as insulin and monoclonal antibodies, or MAb’s), branded formulations and licensing fees.
In the generic API and statin business, the company says it has been able to hold on to market share but admits that due to intense competition “margins in some categories have been under pressure”.
Contract research services provided by Syngene International Ltd and clinical development offered by Clinigene International Ltd, both subsidiaries, are growing, but the company has postponed plans to turn them into separate entities by at least one-two years.
“We are not in a hurry to spin off the businesses and list them separately,” Mazumdar-Shaw said. “The danger in that business is of commoditization. The fee-for-service model is not sustainable in the long term. We are looking at providing value-added services like integrated drug development, as seen in the recent partnership we announced with Endo (Pharmaceuticals), where we share the risks but also the upsides.”
The company has two novel drugs in late-stage clinical trials. Oral insulin, which could potentially address 300 million diabetes patients worldwide, and another drug that is undergoing phase-3 trials for psoriasis. Biocon is looking at investing Rs150 crore in R&D this year.
“We have been making calculated bets in R&D and I am optimistic about the outcome of the trials,” said Harish Iyer, vice president, R&D. “We are also working on a number of other biosimilars and novel (drugs). We have a robust pipeline.”
The partnership programmes in R&D with a number of leading firms have started paying off, says Mazumdar-Shaw. Biocon has partnerships with Mylan Inc. for biosimilars addressing oncology and auto-immune diseases, with Amylin Pharmaceuticals Inc. for developing a novel peptide-targeting diabetes drug, with Vaccinex Inc. and IATRICa Inc. for oncology-related MAb’s, and with Optimer Pharmaceuticals Inc. to supply novel API.
“We have made good progress in several of these partnerships,” she said. “R&D by its very nature has a long gestation.”
Graphic by Yogesh Kumar/Mint