Our aim is to be a global leader in biosimilars biz: Biocon Biologics CEO

Margins of biologics stood at 38% in Q1 as compared to 33% in the preceding quarter

Biocon Biologics, being carved out as a subsidiary of Biocon, plans a slew of launches in insulin and oncology space during the second half of this financial year. Its newly appointed CEO CHRISTIANE HAMACHER tells Bibhu Ranjan Mishra & Debasis Mohapatra that biologics' contribution to Biocon's revenue is likely to see an uptick. Edited excerpts:

Biocon reported good Q1 numbers with doubling of revenue from biologics, which now accounts for 32 per cent of your total revenue. How do you see the road ahead? 

We are looking for more contribution of biologics to Biocon group when it comes to revenue and margins. Margins of biologics stood at 38 per cent in Q1 as compared to 33 per cent in the preceding quarter. The improvement in margins was mainly on account of improvement in biologics. 

What is your pipeline of biosimilars and what are the launches planned this year? 

We expect to launch the biosimilar Trastuzumab in the US. This is a significant growth opportunity as we were the first one to get the approval for launching this biosimilar with our partner Mylan. We believe that we will be the first one to launch the biosimilar Trastuzumab without a legal risk due to the settlement between our partner Mylan and Roche. Besides, we have a very good market positioning as we will be launching two presentations — 420 mg for multiuse and 150 mg for single use — which will provide flexibility to the prescribers. We are continuing with the expansion of our geographic footprint with some of our biosimilars while we are also expecting greater traction for our molecules in the European market. Our partner Mylan has extended its commercialisation of Adalimumab (Hulio) to global markets apart from Europe. We retain our economic interest in this expanded in-licensing arrangement and will gain a share of profits from global markets. With this, we definitely have the potential to be the global leader in the biosimilar space.  

What kind of investment is going into carving out Biocon Biologics as a subsidiary?

Biologics has been an important business segment for us. Early this year, in order to unlock value for our investors, we have established Biocon Biologics as an independent entity. The restructuring is still on. It is exciting time to form this independent entity with a dedicated management team and this set-up allows us to maximise the value from our portfolio. A lot of strategy will also be to invest in expanding our R&D capabilities as well as in portfolio expansion activities, so that we can emerge as a global leader in this space. 

When you say global leader, what kind of market share do you have in mind? 

Biosimilar is a very wide open market and is being shaped. We will see (gain) in market share in insulin and oncology space. There is no one average market share one can give. We are an early mover in the biosimilars space that gives us a very distinct advantage. 

Will this biosimilar subsidiary be publicly listed in coming years like that of Syngene?

Biosimilar business has a lot of potential and we will see the trajectory, particularly in the second half of the year. Over time, we will come to a conclusion when and what is the best way to unlock value. There are no immediate plans for public listing.

There are reports of pricing challenge in the biosimilars space. What is your take on it? 

We believe that different dynamics play out in the biosimilars space as compared to the generic market. In the generic market, price spiral hits the market within very short time span. We don't expect to see such price spiral in biosimilars. One of the reasons is that companies are doing huge investment to reach out to biosimilar market. One of the key contributions of biosimilars is to provide significant savings to the health care market and our aim is to find innovative models to find pricing solutions that expand access to the patients. 

Recently, US drug regulator has issued some observations on Biocon's Malaysian facilities. Can you provide some updates on the nature of these observations? 

We have USFDA inspection of insulin glargine drug substance, drug product, and device assembly facilities in Malaysia as part of a pre-approval inspection. We have received 12 observations across three units and are engaging with the agency very closely. We are very confident of addressing these observations expeditiously and we believe it will not have any impact on our partner's (Mylan’s) plan to commercialise insulin glargine in the US.