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Biopharmaceutical firm Biocon wants to "unlock value" in its businesses after building them up for at least the next five years, chairperson Kiran Mazumdar-Shaw told Moneycontrol in an interview on Friday.
For now, the company is focusing on ramping up its biologics business, which accounts for 15 percent of overall revenues, but has the potential to be a game changer.
The biologics business consists predominantly of biosimilars, that include monoclonal antibodies and recombinant insulins and novel biologics.
Biosimilars are identical copies of original biologic drugs that have active properties similar to the reference biological product requiring large clinical trials on patients to establish safety and efficacy before approval by regulatory agencies, unlike small generic molecules that can be launched by doing bioequivalence studies.
In 2015, the company listed its contract research and drug discovery services business Syngene, and Mazumdar-Shaw said that a range of options was open for the rest of the businesses.
"We want to unlock value through our businesses, that is the strategy, but having said that right now we are pretty focussed on making sure that biologics business actually starts delivering on what we have invested." Mazumdar-Shaw said.
"So for at least five years, we need to make sure that everything that you invested gives you a very rich return. That’s what we have unlocked (in) Syngene," she added.
She said the company would also consider acquisition opportunities that came its way.
“I don’t believe in not looking at attractive opportunities, so I think we do what is right for the organisation, if there is an acquisition opportunity we will go for it, if we believe that organic route is giving us rich return we will go with that," she said.
Mazumdar-Shaw said Biocon will not take its foot off the pedal on research and development (R&D) spend as she sees that as integral part of Biocon’s business model.
"We are not going to reduce our R&D spend; we will be spending at this levels and may be in certain years it might increase," Mazumdar-Shaw added.
Biocon spends about 10-11 percent of sales of R&D, a large part of that R&D spend goes towards global clinical trials of its biosimilars on patients.
Analysts estimate the cost of developing biosimilars for global markets to range from USD 75-250 million.
Biocon has ended FY17 with revenues of Rs 4,079 crore - a third of those revenues are contributed by its listed subsidiary Syngene.
The company has teamed up with US-based generic maker Mylan to develop five biosimilars—pegfilgrastim, trastuzumab, bevacizumab, adalimumab and insulin glargine—for regulated markets such as Europe and US.
Pegfilgrastim is used to stimulate the level of neutrophils, a type of white blood cell, in cancer patients undergoing chemotherapy, trastuzumab is used in the treatment of HER2-positive metastatic breast cancer, colon cancer drug bevacizumab and adalimumab for treating autoimmune disorders like rheumatoid arthritis.
The combined market size of the drugs which Biocon is chasing was estimated to be around USD 45 billion.
Three of Biocon’s biosimilars including trastuzumab, pegfilgrastim and insulin Glargine are currently under review with European drug regulator European Medicines Agency (EMA), while pegfilgrastim and trastuzumab are now reviewed by the US regulator.
The company said it is preparing to file biologics license application (BLA) in US for insulin glargine shortly.
Mazumdar-Shaw is confident the company’s biosimilars will roll out starting from FY19 in US and Europe.
"US FDA has finished its audit and inspection of our facility, that itself is an important signal that they are reviewing our filings; they have given us target action day, which is also an important indicator that it happens on the same date," Mazumdar-Shaw said.
The patent litigation settlement reached by its partner Mylan with Swiss-pharmaceutical major Roche, which markets trastuzumab, has cleared the IP related hurdles, she added.
However Mazumdar-Shaw said that there still some “potiential IP challenges” for Pegfilgrastin and Insulin Glargine in US market.
The company has already launched insulin Glargine in the Japanese market in partnership with FUJIFILM Pharma.
Majumdar-Shaw said the company expects to be a billion dollar company in terms of revenues by FY19.
“Biologics are going to be very important growth driver for us, small molecules will continue to support the business in the foreseeable future, we are getting into vertically integrated abbreviated new drug application (ANDA) that’s going to contribute some numbers, we have revamped our branded formulation business, we expect recovery of contract research and discovery services business,” Mazumdar-Shaw said.
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