Biocon’s momentum in its formulations business balanced the challenges it faced in pricing pressures on its API (active pharmaceutical ingredient) business and could soon overtake the share of APIs in the business mix soon, said a top official.
“On a forward-looking basis, key formulations like peptides will be more important,” said Siddharth Mittal, managing director and CEO, Biocon in an interaction with Moneycontrol.
Major peptides in the GLP-1 category (a class of peptides used mainly to treat diabetes and obesity) are expected to be growth drivers for the company from FY26. In March, Biocon, in collaboration with its European partner Zentiva, secured approval from the Medicines and Healthcare Products Regulatory Agency (MHRA) in the UK for its intricate formulation liraglutide (marketed as Saxenda) injectable. This formulation is used in weight management therapy as an adjunct to a reduced-calorie diet and increased physical activity.
In April, Biocon forged an exclusive licensing and supply agreement with Biomm, a specialised pharmaceutical firm in Brazil, for the commercialisation of a generic version of semaglutide (branded as Ozempic). This medication is indicated for improving glycemic control in adults diagnosed with type-2 diabetes. The product is under review for sale in the US market and it expects approval sometime this year.
Recent years have seen weight-loss products become significant revenue drivers for global pharmaceutical giants such as Novo Nordisk and Eli Lilly, with flagship products like Ozempic, Wegovy, Mounjaro and Zepbound. This trend contributed to Novo Nordisk's ascent as Europe's most valuable company in September 2023.
On the generics front, there has been encouraging growth in Biocon's formulations business expansion, driven by new product launches, strengthening of its US business footprint, and further traction in wider geographic expansion initiatives through both their direct-to-market and strategic partnership models. The momentum in its formulations business balanced the challenges faced in pricing pressures on its API business, which witnessed a contraction over the year, resulting in the generics business delivering a modest 1 percent year-on-year growth.
Also read: Biocon bets on weight-loss drugs as major growth engine for the business
Biocon has already reported impressive traction in the formulations business, which grew 36 percent year-on-year, reflecting the investments made in building formulations capabilities, capacities and product range over the past few years. Cardiovascular treatment statin and immunosuppressant formulations led the growth momentum, which was also seen across all major geographies. During the fiscal year, the formulations share of product sales increased to approximately 35 percent from 25 percent last year, and it is expected to increase and overtake APIs as a share of the business mix in the coming years.
Biocon released its January-March quarter results for 2023-24 (Q4FY24) on May 16, reporting a decline of 57 percent in consolidated net profit to Rs 135.5 crore, compared to Rs 313.2 crore in the corresponding period last year. The pharma major's revenue from operations in the fourth quarter of FY24 stood at Rs 3,917 crore, a rise of 4 percent from Rs 3,774 crore in the year-ago period.
Biocon is an innovation-led global biopharmaceuticals company committed to enhance affordable access to complex therapies for chronic conditions like diabetes, cancer and autoimmune diseases. It has developed and commercialised novel biologics, biosimilars and complex small-molecule APIs in India and several key global markets as well as generic formulations in the U.S., Europe and key emerging markets.
Also read: Biocon bets big on new class of weight-loss drugs
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