Biocon looks to derive sales from US, EU to break even at Malaysia unit

India’s largest pharmaceutical firm Biocon is looking at deriving its sales from developed markets such as the US and the European Union to achieve break-even at its Malaysian subsidiary.

The Malaysia entity, which manufactures a range of insulins and recently received the certificate of GMP compliance from the European Medicines Agency, suffered losses of Rs 28 crore in 2018-19.

According to an Edelweiss report, investments would pick up at the company subsidiary in the current financial year and it would be spending $200 million in the second phase of the Malaysia plant.

“The Malaysia plant will derive a large portion of its sales from developed markets, which will drive its profitability. We also expect the launch of Insulin Glargine in the US in 2020 to boost sales from this facility,” said a Biocon spokesperson. Insulin Glargine was launched in key European markets by the Bengaluru-headquartered company’s partner Mylan in November last year.

Biocon Chief Executive Officer and Joint Managing Director Arun Chandavarkar had earlier told Business Standard that the Malaysian facility was expected to break even in FY19. 

A pharma analyst, however, said for regulatory norms to be fulfilled, it requires additional expenses which could lead to loses. “The process has to be stabilised and it will take time, energy and money. If things are not in order, then the company has to bare additional expenses,” said the analyst.

The USFDA had last month issued 12 observations after the inspection of three of Biocon’s units in Malaysia. “We have submitted our response to the regulatory agency and have started addressing the observations. We are working closely with the regulator and remain confident of being able to address these soon,” said the company.

Biocon’s Malaysia unit is Asia’s largest integrated insulins facility that manufactures drug products in vials, cartridges, and insulin delivery devices and markets them in Malaysia, the EU and emerging markets.