Biocon dips 11% in three days on disappointing September quarter results

 Shares of Biocon slipped 6.5 per cent to Rs 390 on the BSE on Monday, falling 11 per cent in the past three trading days, after the company reported lower-than-expected performance for the quarter, largely weighed by operational challenges for the quarter ended September 2020 (Q2FY21).

Biocon reported 22 per cent year on year (YoY) decline in its consolidated net profit at Rs 169 crore in Q2FY21 against Rs 216 crore in Q2FY20. Revenue from operations grew 11 per cent at Rs 1,745 crore on YoY basis.

Ebitda (earnings before interest, taxes, depreciation, and amortization) down 8 per cent to Rs 223 crore from Rs 296 crore in the corresponding quarter of previous fiscal. Ebitda margin contracted 482 basis points to 23.32 per cent from 28.14 per cent in year ago quarter. The company said profitability was impacted on account of higher R&D expenses, staff costs, other expenses and forex losses.

The management guided for operational issues to be resolved soon and that it should benefit from increasing demand for its biosimilar products. Around 50 per cent of sales in Biosimilars are from the developed markets and the other half from the emerging markets.

Motilal Oswal Securities cuts EPS estimate by 15 per cent/10 per cent for FY21/FY22, factoring in a delay in the ramp-up of biosimilars (Pegfilgrastim/Trastuzumab) and reduced operating leverage. The brokerage firm maintains 'Neutral' on the stock as current valuations adequately capture potential biosimilarled upsides in earnings.

At 02:42 pm, Biocon was trading 4.5 per cent lower at Rs 399 on the BSE, as compared to 1.5 per cent decline in the S&P BSE Sensex. The trading volumes on the counter jumped three-fold with a combined 8.6 million equity shares were changing hands on the NSE and BSE.

Biocon posts 22% fall in Q2 net profit on high R&D expenses, staff costs

 Biopharmaceutical major Biocon on Friday posted a 22 per cent fall in consolidated net profit for the September quarter of the current financial year (Q2), to Rs 169 crore, on account of higher research & development (R&D) expenses, staff costs, forex losses and other expenses. The company’s gross R&D spend was up 35 per cent on a y-oy- basis at Rs 165 crore in Q2.

The Bengaluru-headquartered company posted 10 per cent growth in consolidated revenue on a y-o-y basis to Rs 1,760 crore in Q2 of FY21. In the second quarter of the previous financial year, the consolidated revenue had stood at Rs 1,606 crore.

“As part of our commitment to address the novel coronavirus pandemic in India, the Biocon group is working on a comprehensive portfolio of products for treating mild to severely ill Covid-19 patients. We have introduced Araflu (Favipiravir) in addition to Cytosorb and Alzumab, and Syngene has started manufacturing Remdesivir under a voluntary licensing agreement with Gilead,” said Kiran Mazumdar-Shaw, executive chairperson, Biocon.

The company has also received Drugs Controller General of India's (DCGI's) approval for the commercialisation of Alzumab-L, a new 100 mg/vial formulation of Itolizumab, for treating Cytokine Release Syndrome in moderate to severe Covid-19 patients. This would replace the need to buy four vials of the previous 25 mg formulation of the drug, increasing patient convenience.

While the biosimilars segment posted 11 per cent growth on a y-o-y basis, research and generics businesses reported a growth of 12 per cent and 8 per cent respectively when compared with the corresponding quarter of the previous financial year.

“We expect the generic formulations business to continue to drive growth, based on new launches in the US for products which are currently under regulatory review. We also plan to commercialise Remdesivir in India as part of our commitment towards providing treatment for Covid-19,” said Siddharth Mittal, CEO and Managing Director, Biocon.

In the biosimilars segment, Biocon’s Insulin Glargine was commercialised in the US by partner Mylan during the quarter, heralding its entry into the US insulins market.

“As a part of our commitment to enable universal access to affordable insulins in low- and middle-income countries we also rolled out our ‘Mission 10 cents’ in the Philippines. While we continue to see strong demand for our products globally, we are experiencing some operational challenges which have prevented us from achieving our full potential,” said Christiane Hamacher, CEO & Managing Director, Biocon Biologics.

“However, we are confident of addressing these, going forward, as a part of our commitment to expand access to life-saving, quality biosimilars including monoclonal antibodies and insulin analogs, for millions of patients across the globe,” she added.

Sales of Biocon's itolizumab surge as phase-4 clinical trials begin

 Biocon re-purposed psoriasis drug itolizumab has seen a seven-fold jump in sales after it got an emergency use authorisation from the drug regulator for use in treating Covid-19. The drug, however, is yet to be a part of the clinical management protocol of the health ministry's treatment of Covid19.

With phase 4 clinical trials now on, the sales may see a further uptick if data supports its use on Covid-19 patients, said experts.

Data from market research firm AIOCD AWACS showed that the volumes shot up 7 times in August (350 units) from just 50 units in July when it received the approval. In June the drug did not show sales.

In India, Itolizumab, known by the brand name ALZUMAb, has been priced at Rs 8,000 per vial with most patients requiring four vials taking the total cost of the therapy to Rs 32,000. In a few cases, however, a patient might need a second dose of two more vials. The drug is manufactured and formulated as an intravenous injection at Biocon’s bio-manufacturing facility in Bengaluru.

The company had received an emergency approval from the Drugs Controller General of India (DCGI) in early July to market the novel biologic drug for treatment of patients with moderate to severe Covid-19 complications.

The drug, however, failed to make it to the clinical management protocol of the health ministry, which, in turn implies that the government does not yet recommend it as effective treatment.

To repurpose the drug for Covid-19 treatment, the earlier trial was done on a cohort of 30 patients who were suffering from moderate to severe ARDS (acute respiratory disorder syndrome) due to Sars-Cov-2 infection. Of the 30 patients, 20 received Itolizumab and 10 received standard of care.

While the 20 patients who were administered Itolizumab recovered fully and were discharged from hospital, said the company, in the other arm of 10 patients, three out of 10 patients in the control arm with the standard of care died.

After many experts pointed out that the study was conducted on limited number of patients, Biocon has now already started a phase 4 post marketing surveillance of the drug which will at least take a couple of months to complete. A Phase 4 study is a follow up on real world evidence on the efficacy and safety of a drug. It is done to corroborate the data that a company gets in the earlier trials.

The Bengaluru-based company is carrying out the phase 4 trial on a pool of 300 patients at around 25-30 centers across India and has brought on board an international Clinical Research Organization to drive the study.

“It is a requirement from a regulatory point of view. When we did a proof of concept study, we got the emergency use authorisation because it is already an approved drug and has a lot of safety data,” said Kiran Mazumdar Shaw, executive chairperson, Biocon. The company had developed and launched itolizumab in 2013 in India to treat moderate to severe plaque psoriasis.

Experts like Satyanarayana Mysore, head of the Department of Interventional Pulmonology, Manipal Hospitals, who have also used the drug on Covid-19 patients feel that once more data emerges on the use of the drug, it will be used more.

Mysore said that he had used the drug on a couple of patients when Roche's tocilizumab was not available easily. "Both the patients had responded well. But two patients is a very small number and now tocilizumab is also readily available," Mysore said.

He, however, pointed out that unlike tocilizumab, which specifically blocks interluken 6 (IL-6) or cytokines, theoretically Biocon's itolizumab works on the root cause of Il6 production and may limit the production. Many Covid-19 patients get into severe phases of the disease when their body's immune system behaves abnormally and a cytokine release syndrome is triggered which leads to inflammation.

"Itolizumab may also address some underlying connective tissue disorders. However, we would need more medical evidence," Mysore said.

Shaw had earlier told Business Standard that Biocon sees itolizumab as a blockbuster opportunity for the company and has been working towards ramping up internal capacity to meet the rising demand.

Biocon’s US Partner Equillium also recently announced it has completed a pre-investigational new drug meeting with the USFDA on the drug and the US regulator provided positive feedback supporting Equillium’s clinical development plans for evaluating itolizumab as a potential treatment for patients hospitalised with Covid-19.

Biocon's US prospects get a boost after company receives EIR from USFDA

Even as the benchmark indices were down 4 per cent on Wednesday, the Biocon stock jumped 2.8 per cent. The company received a go ahead (EIR) from the US drug regulator after an inspection for its insulin manufacturing facility in Malaysia. EIR is an establishment inspection report, which is given by US FDA upon closure of its inspection. This paves the way for the launch approval and commercialization of insulin (Glargine) in the US. The company, along with its partner, had already won a patent ligation for insulin Glargine in the US recently and thereafter filed for the launch of the drug. However, analysts had remained watchful of developments pertaining to the Malaysia plant. The clearance will boost the company's growth prospects in the US and in other key markets.

The regulatory overhang has been on the decline as the company recently received an EIR for its small molecules facility in Bangalore. This means that growth momentum in small molecules business too, will sustain.

Meanwhile, Mylan and Biocon also filed for the biosimilar of another oncology drug AVASTIN (Bevacizumab) with the US FDA. The application review is to be completed by the end of 2020. Analysts feel that this could be the third oncology biosimilar of Biocon in the US. Given the global market size for the drug at $7 billion, this is a large opportunity for Biocon.

Biocon had commercialised Ogivri, a biosimilar for oncology drug Trastuzumab, in the US some time back. This is in addition to the company’s launch of oncology biosimilar (Pegfilgrastim) which is gaining traction. The company’s new manufacturing facility in Bengaluru, having received additional approval for manufacturing of Pegfilgrastim, will help Biocon address the growing market opportunities in the US and other global markets.

Analysts remain positive on the company's prospects and anticipate strong earnings growth. Analysts at PhillipCapital India expect 32 per cent annual growth in earnings during FY19-22, as they expect Biocon to benefit from significant operating leverage and improved biologic sales by FY22 with the visible cumulative benefit of expanded Pegfilgrastim, Trastuzumab and Glargine sales.

Biocon: Fresh biosimilar opportunities to give a boost to its US prospects

Biocon, which remains in news on developments regarding biosimilars, also received an EIR for its small molecules’ active pharmaceutical ingredients (API) plant on Friday. EIR is an establishment inspection report, which is given by US FDA upon closure of its inspection. The clearance of Biocon’s plant by the FDA, while reducing regulatory overhang also means that growth in small molecules business will sustain.

However, the Street interest is more on the progress and success in Biosimilars. While the company along with its partner won a patent ligation asserted by Sanofi for insulin Glargine device patent in the US last week, it also filed for another oncology biosimilar in the US markets.

The US District Court of New Jersey found that the device patent claims asserted by Sanofi for Solostar against Mylan/Biocon’s insulin GLARGINE, do not infringe Sanofi’s patents and are invalid for lack of written description. This would clear the way for commercialisation of insulin Glargine in the US.

ALSO READ: Biocon receives EIR from USFDA for good manufacturing practice inspection

While the patent win has raised expectations of an early launch of Glargine in the US, analysts remain watchful on developments pertaining to three observations that Biocon had received for its Malaysia plant. While Biocon is confident of addressing the procedural issues, Mylan believes that the inspection will not hamper the commercialisation plans for Glargine.

Meanwhile, Mylan and Biocon also filed for the biosimilar of another oncology drug AVASTIN (Bevacizumab) with the US FDA. The application review is to be completed by end of 2020. Analysts feel that this could be the third oncology biosimilar of Biocon in the US. Looking at the global market size for the drug at $7 billion, the opportunity remains big for Biocon.

Biocon had recently commercialised Ogivri, a biosimilar for oncology drug Trastuzumab, in the US. The company already continues benefitting from earlier launch of oncology biosimilars (Pegfilgrastim), which is ramping up in the US. The company’s new manufacturing facility in Bengaluru having received additional approval for manufacturing of Pegfilgrastim, will help Biocon address the growing market opportunities in the US and other global markets.

Not surprisingly, analysts remain positive on forward prospects anticipating strong earnings growth. Analysts at PhillipCapital India expect 32 per cent annual growth in earnings during FY19-22, as they expect Biocon to benefit from significant operating leverage and improved biologic sales by FY22 with the visible cumulative benefit of expanded Pegfilgrastim, Trastuzumab and Glargine. Biocon, too, plans to cross a revenue milestone of $1 billion by FY22, which should keep street sentiments firm.

Biocon receives EIR from USFDA for good manufacturing practice inspection

Biocon on Friday said it has received the establishment inspection report (EIR) from US health regulator for the post-approval and good manufacturing practice (GMP) inspection of its small molecules manufacturing facility in Bengaluru.

"The EIR has been closed with a voluntary action indicated (VAI) classification for the observations, the company spokesperson said in a filing to BSE.

"Biocon has received the EIR from the US Food and Drug Administration (FDA) for the post-approval and GMP inspection of its small molecules active pharmaceutical ingredient (API) manufacturing facility at 20th KM, Biocon Campus, Bengaluru, conducted between Feb 20 and Feb 26, 2020," as per the filing.

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#Biocon's USFDA Inspection of its small molecule API facility held in Feb 2020, stands closed with EIR classifying two observations as VAI. Company is addressing these procedural observations. http://bit.ly/PR200320 

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At the conclusion of the inspection last month, the agency had issued a Form 483, with two observations, which were procedural in nature and are being addressed by the company, the filing said.

"We remain committed to global standards of quality and compliance," company spokesperson added.

The shares of Biocon were trading at Rs 257.00 apiece on the BSE, up 1.76 from the previous close.

Biocon partner's Cancer drug licence application gets USFDA approval

The US Food and Drug Administration (FDA) has approved the biologics licence application of Biocon partner Mylan for review, according to the biotech firm here on Monday.

"The application sought approval of Mylan's drug for treatment of patients with metastatic colorectal cancer with fluorouracil-based chemotherapy," said the city-based Biocon in a statement.

The proposed medicine (bevacizumab) is expected to be the third type from the partnered portfolio for cancer patients in the US. It is available in India and other developing markets.

"The US regulator's acceptance of the application for the drug, co-developed by our Biologics and Mylan, will facilitate access to affordable cancer therapies for patients," said Biocon Biologics chief executive Christiane Hamacher.

The new drug will provide an affordable alternative to the branded biologic for the approved indications.

"Biologics' R&D and manufacturing capabilities have enabled us to offer two biosimilars to cancer patients in the US and bevacizumab will expand our oncology portfolio," Hamacher said.

 

USFDA issues Form 483 with 5 observations to Biocon's Bengaluru facility

Biocon Ltd on Monday said the US health regulator conducted a pre-approval inspection and good manufacturing practice (GMP) examination of the API manufacturing facility and has issued a Form 483, with five observations.

As per the USFDA, a Form 483 is issued to a firm's management at the conclusion of an inspection when investigator has observed any conditions that in its judgement may constitute violations of the Food Drug and Cosmetic (FD&C) Act and related Acts.

"The US Food and Drug Administration (FDA) conducted a Pre-Approval Inspection (PAI) and GMP inspection of the Active Pharmaceutical Ingredients (API) manufacturing facility of Biocon Ltd," Biotechnology major said in a filing to BSE.

At the conclusion of the inspection of the Bengaluru facility, which took place between January 20-24, 2020, the agency issued a Form 483, with five observations, the filing said.

"We will respond to the FDA with a Corrective and Preventive Action Plan (CAPA) and are confident of addressing these observations expeditiously. We remain committed to global standards of quality and compliance," according to company's spokesperson.

The shares of Biocon were trading at Rs 292.95 a piece on BSE, down 0.51 per cent from the previous close.

Biocon pre-tax profit zooms 9% to Rs 315 crore for quarter ended Dec 31

Biotechnology major Biocon on Thursday posted a profit before tax (PBT) of Rs 315 crore for the third quarter ended December 31, 2019, a muted rise of 9 per cent when compared with the corresponding period of previous financial year

The net profit for the period declined 7 per cent to Rs 203 crore on YoY basis though excluding an exceptional item, it saw a growth of 6 per cent. Net R&D expenses at Rs 131 crore, which were up by 71 per cent yoy, too pulled down the profit.

"We witnessed a strong revenue growth of 14 per cent to Rs 1,784 Crore in Q3FY20, led by Biologics, Small Molecules and Research Services businesses. We continued our journey of increasing access to high quality biosimilars and commercialized our biosimilar Trastuzumab in US, Canada and many EU markets this quarter,” said Kiran Mazumdar-Shaw, Chairperson & Managing Director, Biocon.

The consolidated Ebitda margin stood at 27 per cent in Q3FY20.

The company’s Biologics segment reported a strong revenue growth of 31 per cent at Rs 588 crore for the period, led by higher traction in sales of key biosimilars in developed and emerging markets. Private equity fund True North had earlier this month acquired a 2.44 per cent stake in the Biologics arm for around $75 million.

“We plan to raise further capital at an opportune time in the near future,” said Shaw.

Taking forward its commitment to provide insulin at Rs 7, Biocon Biologics CEO Christiane Hamacher said the subsidiary has started engaging with diverse stakeholders in several low and middle-income countries.

While the small molecules business reported a revenue growth of 16 per cent for the quarter at Rs 544 Crore, revenue from the branded formulations segment saw a decline of 26 per cent at Rs 157 crore.

The company’s state-of-the-art drug substance facility for monoclonal antibodies in Bengaluru will be commercialised in the next 12-18 months.

Biocon climbs 5% on launch of Ogivri biosimilar in US market

Shares of Biocon, the biopharmaceutical major, climbed as much as 4.8 per cent to Rs 299.70 apiece on the BSE after the company launched Trastuzumab biosimilar Ogivri in the US market. Ogivri, a biosimilar to Herceptin, has been co-developed by Biocon Biologics and Mylan and will be available in 150 mg and 420 mg strengths.

At 09:29 am, the stock was trading over 2 per cent higher at Rs 292 as compared to 0.09 per cent decline in the S&P BSE Sensex.

Ogivri is used to treat breast cancer and gastric cancer and Biocon has regulatory approval to sell it in more than 80 countries worldwide. It is the second biosimilar from the partnered portfolio of Biocon and Mylan being commercialised in the US. The biosimilar will be launched at a competitive discount for customers to help ensure access and increase treatment options for patients, said the Bengaluru-based company. 

“The US launch of Ogivri marks a significant milestone in our biosimilars journey. It is an important endorsement of our science, development and manufacturing capabilities in the area of monoclonal antibodies,” said Christiane Hamacher, CEO, Biocon Biologics.

So far in the calendar year 2019, shares of Biocon have underperformed the market by falling 9 per cent as compared to around 11 per cent rise in the benchmark Nifty50. Nifty Pharma has slipped over 8 per cent during the same period, data available with ACE Equity shows.

For the September quarter (Q2FY19), the company reported a net profit of Rs 215.7 crore. It had posted a net profit of Rs 354.7 crore for the corresponding period of the previous fiscal, including a one-time gain of Rs 171 crore as company fair valued its investment in US-based Equillium. Consolidated total income of the company stood at Rs 1,610.6 crore for the quarter under consideration as against Rs 1,375.4 crore for the same period year ago.

Analysts at Anand Rathi Share and Stock Brokers remain bullish on the stock as they expect company to get benefits of first wave of Biosimilar commercialisation in the next two years which, they believe, should drive higher revenues and margins.

"We have updated our financials reflecting latest quarterly numbers and continue to remain positive on the stock and maintain our 'BUY'rating with a target price of Rs 321 per share," the brokerage firm said in a report dated November 7.

USFDA approves production of Biocon biosimilar at new Bengaluru unit

Biopharmaceutical major Biocon on Wednesday received approval from the US health regulator to manufacture biosimilar Pegfilgrastim at its new drug substance facility in Bengaluru. After standard operating procedures, the new unit will begin manufacturing immediately, a company spokesperson said.

The US Food and Drug Administration’s (USFDA’s) nod to Biocon’s supplemental biologics licence application for the new unit will expand the company’s capacity multifold, said the Bengaluru-headquartered firm.

“This is a significant milepost in our journey of serving five million patients by FY22 and crossing a revenue milestone of $1 billion. This approval will help us better meet global patient needs for Fulphila, a high quality biosimilar Pegfilgrastim co-developed with Mylan and manufactured by Biocon Biologics,” said Christiane Hamacher, chief executive officer, Biocon Biologics.

Fulphila was the first biosimilar Pegfilgrastim to be approved in the US market and was commercially launched in July. The biosimilar helps patients with non-myeloid cancers and reduces the risk of infection following myelosuppressive chemotherapy.

With this additional facility, Biocon Biologics will be able to address the growing needs of the patients for Pegfilgrastim in the US where introduction of the biosimilar has expanded the overall market, as well as in European Union (EU), Canada, and Australia. Currently, Biocon Biologics has a product pipeline of 28 molecules, including 11 with Mylan, several with Sandoz while some being developed independently. It has commercialised three of its biosimilars in the US, EU, Australia, and Japan so far.

Biocon Chairperson and Managing Director Kiran Mazumdar-Shaw had recently made a personal commitment towards enabling universal access to high-quality rh-Insulin to patients in low- and middle-income countries at less than Rs 7 per day through Biocon Biologics. To unlock universal access to insulin, Biocon Biologics would be coming together with global industry leaders at the International Diabetes Federation in Busan (South Korea) next week to address the issue of affordability.

Biocon subsidiary acquires research facility from Pfizer Healthcare

Biotechnology major Biocon on Tuesday said its subsidiary has acquired a Chennai-based biological research facility from Pfizer Healthcare for an undisclosed amount.

Biocon Biologics has acquired research and development (R&D) capital assets of a 60,000-square feet research facility at Ticel Bio Park in Chennai, Biocon said in a statement.

"The high-end integrated R&D facility in Chennai will enable Biocon Biologics to expand its R&D capability and accelerate its journey towards meeting its strategic long-term goal of addressing the needs of millions of patients worldwide," Biocon Biologics CEO Christiane Hamacher said.

This investment will allow the company to fast-forward development of its biosimilars from lab to pilot scale, he added.

The facility will house an early stage research and innovation centre, including a pilot scale R&D unit equipped with cell line development, drug product formulation laboratories and analytical R&D laboratories.

The facility is expected to be operational in a few months post qualification and will house over 250 scientists.

This acquisition provides Biocon Biologics a significant time advantage in comparison to setting up a greenfield R&D project and will accelerate the global development of its biosimilars portfolio, the company said.

At present, the company has an R&D centre at Bengaluru.

Biocon Biologics has a product pipeline of 28 molecules, including 11 with Mylan, few with Sandoz and rest on its own.

Biocon shares were trading 0.64 per cent higher that their previous close at Rs 226.85 on the BSE.

Boost to Biocon's biosimilar business as Bengaluru units get European nod

Biocon has received the European drug regulatory agency's approval for its facilities in Bengaluru, enabling it to continue and enhance its biosimilar production for the Continent's markets.

The company said on Friday that it has received the Certificate of GMP (Good Manufacturing Practice) compliance from European Medicines Agency (EMA) for its Biologics Drug Product (DP) and Drug Substance (DS) facilities at Biocon Park, Bengaluru. The facilities, which manufacture Biocon’s portfolio of biosimilars, were inspected by the European agency in March 2019. 

"This was a surveillance inspection of our existing DP and DS facilities and a pre-approval inspection of our additional DP manufacturing line. This certification will enable us to continue addressing the growing needs of patients in the EU markets and enhance access to our high quality biosimilars,” said company spokesperson in a statement issued today.

The company is expected to deliver growth in the biologics business from product launches in developed and emerging markets, along with a pipeline of biosimilars for launch in future. Analysts earlier said that the growth from biologics business is expected to post double-digit growth both, in revenue and net profit, over the next three financial years, even though competition is expected to grow in future.