Biotechnology major Biocon is aiming to register a 66 per cent growth in its biologics business this fiscal, which the company hopes will help it clock a revenue of $200 million on the back of emerging markets growth.
Its current revenue from the biosimilars market is around $120 million. In the last six months, the company (along with its partner Mylan) has made significant progress on the regulatory front in the US and EU markets and has built a biosimilars pipeline. However, it is still some time away for these markets to drive growth. The company feels that developed markets would drive revenue growth in the next three years.
Building on its India experience, the Bengaluru-based firm has been unlocking value in other emerging markets with Recombinant Human Insulin (rh-insulin), which has already been approved in 60 countries. The approval of Mylan and Biocon’s biosimilar insulin Glargine in about 25 countries will also be a revenue-driving force, chief executive officer Arun Chandavarkar told Business Standard.
Besides expansion of territories, another factor that will help the company meet the $200 million target is the integrated insulins manufacturing facility in Malaysia which has got regulatory approvals from various emerging markets.
“Relying only on our Bengaluru facility was proving to be a constraint in our services to meet the growing needs of insulin. The Malaysia facility will cater significantly to emerging markets, helping us expand the geographic footprint for insulin,” said Chandavarkar.
In the first quarter of this financial year, the biologics segment recorded a revenue growth of 36 per cent at Rs 2.5 billion. This came on the back of biosimilar sales as Biocon’s novels such as the oral insulin are still a long way from commercialisation.
Another driver for growth will be biosimilar Trastuzumab, used for the treatment of breast and stomach cancer. It witnessed a strong retail market uptake in Brazil, one of the top four emerging markets for this drug globally. It is gaining traction in other emerging markets, according to the company.
However, tender-driven emerging markets are a threat to the revenue numbers of the company. “The outcome of tenders is always binary and depending on where we stand in winning certain tenders, it is bound to impact some of our revenue growth,” added Chandavarkar.
Experts are of the view that Biocon will be able to clock $200 million revenue based on the new approvals in the biosimilars space. “The company had guided for $200 million about four years ago. It is likely to achieve this figure based on new approvals in the emerging markets, Europe and the US,” said Deepak Malik, associate director at Edelweiss Financial Services.
Ranjit Kapadia, senior vice-president at Centrum Broking, said the revenue achievement will depend on how the company conquers the US market along with new registrations and competitive pricing in emerging nations.
However, Biocon feels new launches in the developed world will drive the company’s revenue only in the next three years.
The company has made several inroads into the developed markets on the back of biosimilars. Fulphila, co-developed by Biocon and Mylan, became the first biosimilar to pegfilgrastim being approved in the US.
It has a huge market base as pegfilgrastim innovator Amgen’s Neulasta has an annual global sales of $4.7 billion out of which $3.9 billion is generated from the US alone. Oncology biosimilar Trastuzumab has also been given USFDA approval. It is also currently under regulatory review in geographies such as European Union and Australia. There are also plans to launch Insulin Glargine in Europe and Australia later in the year. Glargine has already been commercialised in Japan.