Demonetisation has impacted Indian sales, not exports: Biocon

Submission of Trastuzumab dossier to the United States Food & Drug Association (USFDA) is an important milestone for Biocon and the review process is expected to take 18-24 months, says CMD Kiran Mazumdar Shaw. Speaking to CNBC-TV18, Shaw said huge opportunities exist for Biocon in the US biosimilars market. The company has also filed for 3 biosimilars with European Union regulator and is likely to file those with the USFDA too. Discussing the Indian market, Shaw said while exports have not been impacted due to demonetisation, Indian business saw lower sales over the last month. Shaw added that dependence on domestic business is quite small. Stopping sale of Abraxane has also impacted Indian business. Some decline in branded formulation business is expected on back of this, she said. The management is expecting to sustain revenue and margins at second quarter levels. Below is the verbatim transcript of Kiran Mazumdar Shaw's interview to Ekta Batra & Prashant Nair on CNBC-TV18.Ekta: This is our first conversation since the company filed for the Trastuzumab, the biosimilar for breast cancer with the US FDA. When do you expect the approval and what is the expected market share post approval?A: This is an important milestone for Biocon and Mylan because it's the first submission of a biosimilar Trastuzumab dossier to the US FDA. The review process can take anywhere between 18-24 months. We are hoping that it will be sooner than later. Having said that we do expect, all things going well, that we should be able to get into the market as the first biosimilar and that opens up a big opportunity for us but in terms of market share there are lots of unknowns. Obviously, there is a huge opportunity for biosimilars in the US market. If you go by what is happening today with already approved biosimilar, there is a huge uptake of biosimilars and a few organisations have already adopted almost 90 percent of approved biosimilars. Therefore, it's an exciting opportunity for Biocon and Mylan to take a large part of this market and given the fact that there are a few others who will also be joining us in this particular market for biosimilar Trastuzumab. We do expect there to be competition but I also believe that there is a large opportunity for Mylan and Biocon in terms of garnering market share.Ekta: Sticking with the biosimilars opportunity, Trastuzumab is the fourth biosimilar filing for the company in developed markets which is US and Europe and it is the first that you filed in the US. Could you detail to us what is the status of biosimilar filings by the company across other markets including emerging markets and most recently insulin glargine in the US as well?
A: Pegfilgrastim is another biosimilar that we filed with the European Medicines Agency (EMA) and we expect to do that with US FDA very soon. We have also filed insulin glargine with EMA and we will be hopefully submitting that with the US FDA before too long. We have other products in the pipeline which are also under development like other insuline analogs and other antibodies. So all going well, we expect to file all of these within the next fiscal or two - that's the plan and when it comes to these products and their approvals in emerging markets. We expect that as soon as we get either of the EMA or US FDA approval; EMA before US FDA is what is anticipated then we will get automatic approvals in many emerging markets but having said that we are already present in a large number of EMA with many of these products.

Trastuzumab is a product where we are already in the Algerian market but there are other opportunities in other emerging markets and we expect that to happen sooner than later. A very large opportunity for these products in the emerging markets because these are billion dollar opportunities for sure even in the emerging markets collectively. So it's an important opportunity for Biocon's business in terms of focusing on these biosimilars and of course we are expanding the biosimilar pipeline as we speak, so that we keep adding to this list.

Prashant: Has the company been impacted due to demonetisation. We understand the sales of chronic therapies have spiked when it is compared to some of the acute therapies?

A: Not really, maybe the dependence on Indian business is quite small and none of our export businesses have been impacted as you can imagine by demonetisation. So given our exposure to the Indian market being very small, we haven't seen much of an impact but having said that yes, our India business certainly has been impacted over the last month, which we are seeing by lower sales, so to a certain extent chronic therapy usage has been impacted by a small extent but since our dependence on this business is not huge, it doesn't impact the overall business, in fact we have benefited from a weaker rupee in terms of our export realisations.