Biocon shares ends 15% higher on USFDA approval for Herceptin biosimilar
Mumbai: Shares of Biocon Ltd surged 16% as partner Mylan NV received approval from the US Food and Drug Administration (FDA) for its biosimilar for Roche’s drug Herceptin, used in the treatment of breast and metastatic stomach cancer.
The biosimilar trastuzumab, to be sold under the brand name Ogivri in the US, will be manufactured by Biocon and marketed by Mylan.
This product approval has significantly improved Biocon’s earnings outlook and also increased optimism of the company getting USFDA nod for biosimilar pegfilgrastim and insulin glargine in future, analysts said.
Biocon shares closed at Rs513.55, up 15%, on the BSE, while benchmark Sensex index was up 0.3% at 32,930.18 points. Shares rose 16.33% to Rs519.50 intraday.
Mylan and Biocon are exclusive partners for a broad portfolio of biosimilar and insulin products. The biosimilar trastuzumab or Ogivri is one of the six biologic products co-developed by the companies.
Mylan has exclusive commercialization rights for biosimilar Ogivri in the US, Canada, Japan, Australia, New Zealand and in the European Union and European Free Trade Association countries. Biocon has co-exclusive commercialization rights with Mylan for the product in the rest of the world.
“Trastuzumab (Herceptin) had global revenues of $7.2 billion in 2016. We are cognizant that Herceptin is a hospital product, where biosimilar switch could be relatively slower. Roche also launched a 150mg single dose vial in May’17 while Mylan/Biocon have a 420mg vial approved. Nevertheless, we expect cost considerations to drive traction over time,” according to a Citi Research report.
“Biocon is most leveraged among Indian peers to global biosimilars and should deliver meaningful upside over the long term. We raise target price to Rs525 from Rs410,” the brokerage said in the report.
In October, the USFDA had issued a complete response letter (CRL) for Biocon and Mylan’s application for biosimilar pegfilgrastim seeking certain data before the product gets an approval. Biocon and Mylan’s pegfilgrastim is a biosimilar of Amgen’s chemotherapy drug Neulasta.
The companies have also filed applications for biosimilar trastuzumab and pegfilgrastim with the European Medicines Agency (EMA) and the regulator on Friday accepted the applications for review.
Biocon expects revenue from its biologics portfolio in regulated markets such as the US and Europe to kick in from financial year 2018-19.