Biocon nears 52-week high on heavy volumes

The stock up 9% to Rs 533 on the BSE, trading close its 52-week high of Rs 544 touched on January 5.

Biocon has surged 9% to Rs 533 on the Bombay Stock Exchange (BSE) on the back of heavy volumes.  The stock is currently trading close its 52-week high of Rs 544 touched on January 5, 2016 during intra-day trade.

The trading volumes on the counter jumped an over seven-fold with a combined 3.78 million shares changed hands on the NSE and BSE till 01:56 PM. The S&P BSE Sensex was down 1.7% or 434 points at 24,965.

The stock has outperformed the market by gaining 15% in past seven trading sessions after the company said Ministry of Health, Labor and Welfare (MHLW) of Japan has approved its biosimilar Insulin Glargine.

The product is ready to use, prefilled disposable pen with 3ml of 100IU Insulin Glargine and is expected to be launched in Q1FY17. The approval has been obtained post successful completion of initial development by Biocon and local phase III clinical studies in over 250 diabetes patients by Biocon’s partner, Fujifilm Pharma. The market size of this product in Japan is about US$ 144 million, as per IMS March 2015 data.

According to brokerage house IndiaNivesh Securities, given the market size of US$ 144 million and three player market (Sanofi – Innovator and two biosimilars – Eli Lilly and Biocon), the opportunity seems to be attractive.

Currently, Eli Lilly sells bio?similar at 30% discount to innovator. Also, switch from branded drug to biosimilar/generic drug in Japan market has been difficult, historically. Hence, though the opportunity is attractive, we expect gradual pick?up in sales for Biocon, the brokerage house said in a recent report.