Debt restructuring to reduce interest costs by ₹300 cr by FY27: Biocon CEO

CEO Shreehas Tambe says debt reduction, US state tie-ups, and five fresh product launches will strengthen Biocon Biologics' global biosimilar play

As Biocon Biologics Ltd (BBL) charts its next phase of global expansion, Chief Executive Officer and Managing Director Shreehas Tambe outlines how the company is reshaping access, affordability, and growth in biosimilars. From California, in a video interview with Sohini Das and Aneeka Chatterjee, he talks of the ways in which BBL is working to stay ahead in competitive global markets. Edited excerpts: 

 

Biocon Biologics is partnering California’s CalRx initiative for affordable insulin. How significant is the tieup commercially, and does it indicate a broader shift toward government-linked procurement or value-based models in key markets?

 

The announcement with the California government for CalRx-branded insulin glargine is path-breaking. It is an arrangement that complements our flexible commercial platform. Through a partnership with Civica, a not-for-profit organisation, we enable direct distribution of insulin from the state to pharmacies, eliminating middlemen and making it affordable for Californians. California accounts for 20 per cent of America’s insulin consumption, and this initiative opens a new, complementary channel for future state collaboration.

 

There are 50 states in the United States (US), and California is the first. We’re already in discussion with several other states, as well as with partners like Civica and potentially TrumpRx, to explore similar initiatives. I would not call this a shift — it’s not replacing our commercial channels. Rather, it’s an example of the flexibility of our platform, which allows us to add another channel: Enabling direct-to-pharmacy access while continuing to serve existing ones.

 

Biocon has just settled structured debt obligations with Goldman Sachs and Kotak Mahindra Bank, and says this will cut interest costs from FY27. How much breathing room does this give Biocon Biologics on the balance sheet?

 

We have been saying we will lighten the balance sheet and make it stronger. When we raised funds through a qualified institutional placement, we stated they would be used to retire structured debt. We have retired over ~4,500 crore, closing out Goldman Sachs, Kotak Mahindra Bank, and soon Edelweiss. This will reduce interest costs by about ~300 crore by FY27.

 

Beyond that, where else do you see margin improvement coming from — pricing discipline, cost control, or portfolio rationalisation?

 

The first major development is debt restructuring. Second, we are seeing an improvement in the margin profile, with earnings before interest, tax, interest, and amortisation up over 40 per cent year-on-year over the same quarter last year. This reflects operating leverage starting to play out, delivering nearly a 400-basis-point margin gain. The cost base remains stable, but revenues have exceeded $300 million for the first time, a significant shift even before new launches impact the P&L.

 

With debt easing and the business gaining traction, is the initial public offering (IPO) still on the table? What’s the realistic timeframe now?

 

We do not have new developments to report at this point. As you may recall, Kiran Mazumdar-Shaw (Biocon chief) had mentioned that the Biocon board had formed a committee to evaluate the best way to monetise Biocon’s investment in biologics — whether through an IPO or another route. Until the committee completes its review and reports back to the Biocon board, we would not have any updates. 

 

The launch of Denosumab is on track. Which launches do you see as the next growth engine, and how are you positioning against bigger global biosimilar rivals in the US and Europe?

 

At the close of FY25, we announced plans to launch five products in the US. Of these, four have been launched in the first two quarters, a major milestone, given the negotiations on intellectual property, settlements, and litigation involved. Previously, we had four products in the US over seven years, but by FY26, we’ll have five launches within 12-18 months of March 2025. The fifth product, our athlete percept, is expected in the second half of next year. Though early, these launches position us strongly for sustained growth and competitive advantage.

 

The group has filed for semaglutide in Canada and Brazil. How significant are GLP-1 (glucagon-like peptide-1) products to Biocon’s next phase of growth?

 

There is a sizable opportunity with semaglutide. Canada is expected to open up before other markets. Initially, there was an expectation that one of our Indian peers might enter sooner, but that seems to have been delayed somewhat.

 

We already have the capability to develop and manufacture it. But now, with our own commercial front in Canada through Biocon Biologics, we have a truly differentiated approach compared to many of our Indian peers. This sets us apart.

 

It also gives us an additional advantage because we are commercialising insulin in that region. So, alongside insulin, we can offer GLP-1 products through the same distribution channels, the same customers, and the same buying groups. This makes it a complementary offer that allows us to leverage existing relations.

 

You recently inaugurated a facility for oral solids in the US. Any plans to expand the manufacturing footprint?

 

We recently inaugurated our commercial manufacturing facility in Cranbury, New Jersey. Establishing it in the US was a strategic move. Being closer to the market, it provides logistical and procurement advantages. It’s a sound business decision that strengthens our competitive position and supports long-term sustainability.

 

Given your partnership with Civica for insulin manufacturing in the US, are you exploring a similar local production model for semaglutide?

 

We have established a partnership with Civica to produce insulin domestically. Under this collaboration, we supply the drug substance, and Civica manufactures insulin in the US, for the US. This decision was made well before recent trade discussions. It was based purely on business rationale. Producing close to our patients and markets simply makes sense.

 

The same principle will guide our approach to semaglutide manufacturing. If it makes business sense to produce locally, based on demand and market dynamics, we will. Wherever there is a large consumption base, we aim to be close to our customers.

 

Price erosion has been a challenge in mature biosimilar markets – the US/European Union. How are you navigating through this situation?

 

One key difference is that biosimilar prices have been very predictable. Unlike generics, which typically face a rapid 90-95 per cent price erosion rate after losing exclusivity, biosimilars, especially those under the medical benefit vs pharmacy benefit, maintain their value for much longer. For example, our oncology biosimilars have been on the market for over seven years alongside the originator, which continues to sell, showing that both products remain profitable over time.