Eyeing over 15% market share in US for insulin Glargine: Shreehas Tambe

The geopolitical incidents of the recent past as well as the pandemic have not really helped cost pressure: Tambe

Riding on strong growth numbers for its biologics business, and growing market share for its interchangeable biosimilar insulin Glargine in the US market, Biocon Biologics is now eyeing more. Speaking to Sohini Das, Shreehas Tambe, deputy chief executive officer (deputy CEO), Biocon Biologics, unveils how the firm is also strengthening its India insulins team now.

Fiscal 2022 has seen many milestones. How do you look back at the year?

On the back of a strong demand and seamless execution in FY22, our (Biocon Biologics) Q4 revenues grew just under 50 per cent year on year (YoY), and our annual revenues have grown 24 per cent over the last fiscal. This strong top line performance has been driven by performance, both in the developed part of the world, as well as in emerging geographies. But the significant growth that we've seen over the last year is coming from interchangeable biosimilar Glargine, which has seen a huge response in the US market.

Moreover, the quality of our earnings has been a highlight of this particular fiscal year. Our core Ebitda margin, which is effectively our Ebitda net of any R&D expense or exceptional income etc, has actually grown by almost 78-80 per cent YoY for Q4FY22. For the full year, it grew by 30 per cent.

The year gone by saw several milestones for Biocon Biologics. Scientifically, one of the biggest achievements that Biocon Biologics has made so far was getting the historic approval for interchangeable insulin Glargine. It is a first of its kind for any insulin, or for that matter a biosimilar to be approved as an interchangeable by the USFDA that the agency itself indicated. It is truly a game-changing moment for us and also the USFDA.

Another key milestone for FY22 was that we were able to supply our life-saving drugs to over 5 mn patients in the year.

Cost pressures are rising. Your comments.

There is a need for every business to be cost efficient. The geopolitical incidents of the recent past as well as the coronavirus (Covid-19) pandemic for the last two years has not really helped the situation. Kiran Mazumdar Shaw has been talking about how input cost pressures are rising – solvent costs, fuel costs. That has impacted the way businesses have operated. Historically, at Biocon Group we started our businesses in emerging markets even before we started our businesses in advanced markets. Clearly, the emerging markets have been more competitive, more aggressive in terms of affordability given the economic conditions within those nations. That has allowed us to build our costs and our business much more frugally than what most companies in the West would have done. We believe that we have to set up operations with cost efficiency, and as more advanced markets open up, we actually see this as accretive to our bottomline.

What kind of market shares are you eyeing in the biosimilar insulin Glargine space in the US?

Sanofi had the originator drug Lantus in the insulin Glargine market and they dominated this basal insulin space. That was disrupted a few years back when Lilly launched Basalgar under the ANDA pathway (it was not a biosimilar). We are the only interchangeable biosimilar insulin Glargine to Lantus, and now there are only three players in the US market. The competition is effectively between Sanofi, Lilly and Biocon Biologics through the Viatris front-end. Pharmacies are excluding Lantus and are moving towards our business (Semglee – the biosimilar of Lantus). In FY21 we ended with a market share of under 3 per cent and by the end of March we had a little over 10 per cent share of the market. We are looking at ending this fiscal year at mid to high teen’s market share in the US.

What is the road ahead after the Viatris deal?

When we struck the collaboration with Viatris, we brought the scientific and manufacturing capabilities, while Viatris is the commercial front-end. Big pharma was fully vertically integrated from science to manufacturing to the front-end. We will have a portfolio outside of the Viatris collaboration which is sizable. We now have seven products in the market, but we have a total portfolio of 20 products (biosimilars). So, effectively, there is a larger part of our portfolio, which is outside the Viatris collaboration. We have the ambition to go to market ourselves and have our own commercial front-end. What the acquisition did for us was accelerate the strategy which we would have built organically.

Biocon positions itself as an insulin company. What are your global ambitions?

We are an insulin company among the very few in the world – Novo Nordisk and Eli Lilly. Sanofi has already exited insulin R&D. Therefore, we are looking at having a complete portfolio of insulins – basal insulin, rapid-acting insulin and also the recombinant human insulin.

We will bring rapid acting insulin (Aspart) to the US shortly. It is already approved in the EU and 30 other countries, while Glargine (basal insulin) is approved in 70 countries. The recombinant human insulin, which we have been selling since 2004 and is approved in over 40 countries, will also come to the US as part of the whole portfolio of insulins.

It is also about having vials, cartridges and pen-injectors for delivering these insulins. It has been a long investment for us, and over two decades of R&D.

Why is Biocon lagging behind MNCs in terms of market share in insulins?

We had disrupted the insulin market in India with the Insugen (recombinant human insulin) launch. The market was dependent on imports until that and the prices were high. Our pricing also changed the market dynamics, and it changed the insulin pricing forever.

India is a fragmented market, and several MNCs were well entrenched even before we came into the market here. These are chronic products and people do not want to switch products easily. The expectation in India is that our insulin is a copy-cat drug, because India is primarily a generics market (chemical drugs that are copies of patented or innovator products). A copy-cat drug is expected to be cheaper, but that is not true for insulin. Insulin is not a copycat drug. We are among the three companies in the world which have novel technology platforms. Novo Nordisk has its saccharomyces yeast technology platform, Lilly has its E Coli platform, and Biocon has its pichia pastoris (yeast) platform.

It is not a copy-cat technology at all. But, the market expectations are that our products should be 30-40 per cent cheaper. But, if we expect a product which is based on high-quality science, manufacturing technology at par with any in the world, why do we expect an Indian company to price its product lower than its global peers.

Insulin, which is priced at $2 in India (even by some of our western counterparts), is priced at over $100 in the US. That’s how differential pricing works.

Any plans of strengthening the India insulin business?

Our emerging markets business of insulins is headed by an ex-Sanofi Executive Sushil Umesh, and our India country head is also a former Sanofi executive, who has deep entrenched relationships. So, we are strengthening our relationships in India, and after Covid we have been able to generate good growth for our India business starting from FY22. We expect it to get stronger in FY23 and beyond.

The way the market operates in the US is very different from how the Indian market operates. India is a highly fragmented market (several distributors, retailers etc). We have Express Libs who cover over 20 mn lives in the US, Prime Therapeutics which covers 30 mn lives in the US. India is a retail and prescription play. So, we have to chip away at it, piece by piece. However, we remain committed.

What is the update on the Serum Institute of India collaboration?

Biocon has been focused on non-communicable diseases. The deal with Serum Institute of India (SII) will help us build our business in the communicable business side. Entering a new area is a time-consuming and investment heavy model. What we found in SII is an asset light model as they already had the manufacturing capabilities. The deal is directly accretive to the topline and has a commensurate contribution to our Ebitda. By October 2022, we will start seeing value accretion in our profit and loss statements, and will be our first milestone. In the second half of the year, the business will pick up further. New product developments will take time.