Following the observations issued by the French regulator to Biocon’s Bengaluru facility, brokerages remain mixed on the company’s prospects.
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.
The regulator found GMP deficiencies, environmental monitoring-training, OOS (out-of-specification) results management, cleaning validation, process validation, vendors' qualification, media fill test, cross contamination risks, batch manufacturing record, differential pressure alarms' management in classified areas, and access management in SAP for batch certification.
The agency also said that a follow-up GMP inspection is requested in order to ensure that the entire corrective and preventive actions (CAPA) plan has been implemented and finalised by the site and that a robust quality system is in place.
In an interview to CNBC-TV18, Kiran Mazumdar Shaw, CMD of Biocon spoke about the latest happenings in the company.
"The French regulatory authorities inspected us in March this year and the scope of the inspection was to cover two drug substance facilities and two drug product facilities," said Mazumdar Shaw.
Moneycontrol takes a look at what global brokerages and research firm are talking about the stock.
Brokerage: Citi | Rating: Buy | Target: Reduce to Rs 405 from Rs 440
The global financial services firm believes that given Biocon’s high leverage to developed market biosimilars opportunity and that there is some value now, this development will act as a near term overhang on the stock.
“We note that the company has received BsUFA dates from the US FDA for trastuzumab and pegfilgrastim – while each regulatory agency has its own inspection protocol, it is difficult to conclude one way or the other whether the US FDA would have similar concerns,” the firm wrote in its report.
Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 421.33
The research firm said that the management believes that these observations should not materially impact approval and launch timelines.
Further, it said that Biocon could be a beneficiary of the unfolding global biosimilar opportunity and rate favourably its pipeline of four lead products. “We expect EM monetization to gain ground in 2017, followed by EU monetization in 2018 and US in 2019. But, F2018 could be challenging for earnings given startup of its Malaysian facility,” it said in a report. Further, there are several US, EU and emerging market filing and approval catalysts in this year, it added.
The stock fell nearly 6 percent in the past one month, while its three-day loss stood at over 4 percent. At 12:31 hrs, Biocon was quoting at Rs 325.80, up Rs 4.55, or 1.42 percent on the BSE. It touched an intraday high of Rs 329.00 and an intraday low of Rs 323.50.
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