Biocon surges 14% after US FDA gives approval to biosimilar version of Herceptin

Ogivri is the first FDA-approved biosimilar to Herceptin and the first biosimilar from Mylan and Biocon’s joint portfolio approved in the US.

Trastuzumab is the generic name of Herceptin, which has raked in USD 2.5 billion in US sales last year.

"Mylan anticipates potentially being the first company to offer a biosimilar to Herceptin, as a result of Mylan’s ability to secure global licences for its Trastuzumab product from Genentech and Roche earlier this year. This milestone secured a clear pathway to commercialize Mylan’s biosimilar to Herceptin in various markets globally," Biocon said in a statement.

“The USFDA's approval for our biosimilar Trastuzumab is indeed a crowning moment that puts us in an exclusive league of global biosimilar players," said Kiran Mazumdar Shaw, CMD of Biocon.

"It strengthens our resolve to focus on developing affordable biologics that can make cancer care both more effective and more equitable around the world," Shaw added.

Brokerage houses are upbeat about the development and have raised their target price as well. They see upside potential of 28-66 percent.

Brokerage: CLSA | Rating: Sell | Target: Raised to Rs 350

CLSA said that Trastuzumab nod validates the company’s capability in development manufacturing of biosimilars. It estimates Trastuzumab launch at FY19-end & value this opportunity at Rs 30. It values other biosimilar opportunities at Rs 93 per share. Speaking on the stock, it said that the scrip is expensive even after building-in entire value of pipeline.

Brokerage: Citi | Target: Raised to Rs 525

The global financial services firm said that US FDA approval for Trastuzumab validates the firm’s capabilities in biosimilars. The nod also eases manufacturing concerns and improves ability to get nod in other markets. Citi has included the company in its top pharma picks. It expects the stock to deliver meaningful upside over long term.