Biocon's Malaysia insulin facility on the path to break even in FY19

Biopharmaceutical major Biocon, which recently posted a fivefold net profit growth at Rs3.55 billion for the quarter ended September 30, riding on exceptional income, is on the path of breaking even at its Malaysian insulin facility in the current financial year. The company had posted almost a three-fold rise in consolidated net profit at Rs 1.84 billion, excluding exceptional income, for Q2FY19.

The Bengaluru-based firm said the Malaysia site was making good progress in receiving approvals for both the facility and products from various regulatory agencies globally, including European Medicine Agency and TGA, Australia. “This will help us aiming for operational break-even at Malaysia, after excluding R&D expenses in FY19,” said Arun Chandavarkar, chief executive officer and joint managing director, Biocon.

In FY18, Malaysia had reported an operational loss of $5 million at a standalone level, when excluding the impact of R&D.

Chandavarkar said the company was also making good progress in generating additional clinical data to support the manufacturing site change of insulin Glargine from Bengaluru to Malaysia. Biocon is also not anticipating any delay on the approval and launch time of Glargine in the US market, likely by early 2020, as all required activities agreed upon with the Food and Drug Administration (FDA) is in line according to the company.

Insulin Glargine is the first biosimilar from India to be approved and launched in Japan. It has also received regulatory approvals in the developed markets of EU and Australia.

Meanwhile, Biocon's US partner Equillium is working on clinical data for a rare disease (acute graft-versus-host disease (aGVHD) ). This assumes significance as the Biocon-Mylan's cancer drug Pegfilgrastim faces increased competition in US.

According to an IIFL report, Coherus BioSciences, a California-based biotechnology firm, has received US FDA approval for its drug Udenyca (Pegfilgrastim). This is a copy of Amgen's drug Neulasta and is a competition to Fulphila (Biocon-Mylan's Pegfilgrastim biosimilar). Additionally, Udenyca has also received approval in Europe, becoming the first Pegfilgrastim biosimilar approved by both the FDA and the European Commission.

Mylan, which had launched Fulphila in the US in June, is still awaiting European approval for the biosimilar. Fulphila was the first biosimilar to Neulasta to be approved by the FDA.

Biocon’s revenue from the biologics business, comprising novel biologics and biosimilars, had more than doubled to Rs 3.67 billion in the second quarter of the current financial year.

For the company, the next wave of biosimilar opportunities will open up towards the middle of the next decade in partnership with Sandoz, which is a division of Novartis. The development work on the Sandoz partnered biosimilar programmes has started and they are at pre-clinical stage. "Our R&D spends for these programmes will ramp up when these molecules enter the phase of clinical trials," said Chandavarkar.