Biocon gains 13% ahead of US FDA meet to discuss breast cancer drug filing

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Shares of Biocon gained over 13 percent intraday on Wednesday as investors turned bullish ahead of the regulator meeting to discuss its breast cancer drug filing.

The US drug regulator’s Advisory Committee (Adcom) will be meeting on July 13 to disucss trastuzumab filing done by Mylan, Biocon’s partner. Trastuzumab is used to treat metastatic (spread) breast cancer. It is effective against tumors that overexpress the HER2/neu protein, according to chemocare.com.

According to Sharekhan, investors could monitor the outcome of this meet closely and if the product is approved by the US Food and Drug Administration, it will be the first Herceptin biosimilar in the US market.

Further, it highlighted that Roche’s Herceptin brand generated global sales of USD 6.7 billion in last calendar year and is slated to lose US patent exclusivity in 2019.

Morgan Stanley views the FDA’s briefing document for the drug as favourable. It expects higher chances of a positive recommendation by the Advisory Committee on July 13. The research firm has given the stock an overweight rating with a target of Rs 421.33.

Further, it added that this was just FDA’s view on the clinical data submission and not product approval.

“For the Biologics License Application (BLA) approval, the agency will consider wider data submission, including Good Manufacturing Practice (GMP) clearance at the Bengaluru site, where there are open 483s. The Biosimilar User Fee Act (BsUFA) date for trastuzumab is September 3, 2017,” it said in its report.

If the approval from the regulator goes through, Morgan Stanley said that it should 1) validate Biocon's underlying biosimilar capabilities and 2) help in getting marketing approvals in a few emerging markets.

The stock had reacted negatively recently after the French National Agency for Medicines and Health Products Safety (ANSM) had found lapses at Biocon's Bommasandra facility in Bengaluru with respect to good manufacturing practices (GMP) for activities related to three biosimilar products. It had inspected the plant on behalf of the European Medicine Agency (EMA) between March 13 and March 17.

The ANSM raised 35 deficiencies, including 11 major deficiencies, concerning biosimilar products. As a result, the stock had taken a beating of around 9 percent. However, brokerages were largely in support of the stock, stating that it could be a beneficiary of the overall global biosimilar opportunity.

The stock fell around one third of a percent in the past one month, while its three-day gain stood at over 2 percent. At 09:48 hrs Biocon was quoting at Rs 343.85, up Rs 20.75, or 6.42 percent on the BSE. It touched an intraday high of Rs 351.10 and an intraday low of Rs 343.00.