Dr Arun Chandavarkar, Managing Director, Biocon Biologics Ltd., says the structure of the strategic alliance with Serum Institute Life Sciences provides Biocon Biologics with an asset light and accelerated entry into the often overlooked infectious diseases segment. Having established capabilities and a track record of success in biologics, Biocon Biologics’ foray into vaccines and antibodies for infectious disease are a natural adjacency to its existing capabilities in expanding affordable access to advanced therapies for non-communicable diseases.
1. What was Biocon Biologics’ rationale for doing this deal?
Ans: Biocon Biologics is committed to providing affordable access to high quality biologics for the benefit of patients and healthcare systems across the world. Our pioneering efforts in the development of biosimilar insulins and monoclonal antibodies have enabled us to serve several million patients in both developed and developing countries in chronic or non-communicable disease segments such as diabetes, cancer and auto-immune disorders.
The COVID-19 pandemic has opened our eyes to the serious threat posed by viral and other infectious diseases and the role that biologics such as vaccines and antibodies have in addressing this threat. This alliance between Biocon Biologics and Serum Institute Life Sciences brings together two leading players with a shared vision and complementary strengths in biologics and vaccines respectively to make a meaningful impact in fighting infectious diseases.
Vaccines and antibodies for infectious disease are a natural adjacency to Biocon Biologics’ existing capabilities in biologics for non-communicable diseases. The structure of the alliance provides us with an asset light and accelerated entry into this segment. The long term supply arrangement of 100 million vaccine doses annually from Serum provides Biocon Biologics with an additional assured revenue stream and associated margins from the second half of FY23. And, the partnership provides a framework to explore several other opportunities that would be value accretive to both our organizations and make a difference in the often overlooked infectious diseases.
2. What capabilities does Biocon Biologics have currently in terms of R&D and marketing that it can leverage for the vaccines business?
Ans: Biocon Biologics is a vertically integrated company with established capabilities in R&D, Clinical development, Manufacturing and Quality. We have demonstrated success with multiple biosimilar approvals in Europe, US and several other developed and developing countries. We have created global scale capacities for insulins and antibodies that meet the most stringent of regulatory norms. We successfully repurposed our novel antibody, Alzumab-L (itolizumab) to serve the needs of Covid patients in India. And we recently partnered with Boston based Adagio Therapeutics to manufacture and commercialize a promising antibody therapy for Covid-19 in India and select emerging markets. Our commercial footprint for biosimilars straddles the developed and developing countries by leveraging strong regional and global partnerships. We have engaged with global foundations and multilateral agencies to channel our affordable biosimilars to some developing countries.
We believe there are strong synergies between our existing capabilities and the requirements to address infectious diseases with biologics or vaccines. And we can leverage the experience, expertise and global scale that Serum has in the area of vaccines.
3. In which areas do Biocon Biologics and Serum Institute plan to focus and collaborate over the next few years? Which vaccines from Serum Institute’s portfolio will be available to Biocon Biologics?
Ans: With much of the developing world still to be vaccinated and the potential requirement for booster doses linked to either duration of response or threat of new variants, the near term focus would be on Covid-19 vaccines. Additionally, the partnership has access to SILS’s current development pipeline to address unmet needs in other communicable diseases like mosquito-borne infections. Furthermore, there are opportunities that both partners would explore to leverage our complementary strengths in antibodies and vaccines.
4. What could be the challenges for Biocon Biologics as it enters the vaccines business?
Ans: The fact that we have chosen to enter the vaccine business in partnership with a strong and experienced organization like Serum which has global scale and presence, gives us the confidence that we can jointly address any challenges should they arise. Likewise, we ourselves have established capabilities and a track record of success in biologics and our foray into developing, manufacturing and commercializing biologics for infectious disease is an expansion into an adjacent domain with strong synergies to what we have been doing for many years.
5. Serum Institute already has a stronghold in RoW markets and government business. What is the marketing arrangement for the 100 million doses of vaccines that Biocon Biologics will get access to? Will there be overlaps in any markets? Will Biocon Biologics look at private market sales?
Ans: The companies will complement each other by leveraging each others commercial strengths in existing and new markets. The greater objective is to address inequitable access both in emerging and developed markets for life saving vaccines and biologics.
6. What are the timelines for the planned IPO of Biocon Biologics?
Ans: We remain on course for our previously stated target of an IPO within the next 2-3 years.
7. Last year, the company had said it is looking to raise about USD200 million to USD300 million ahead of the IPO. It already raised USD150 million from Goldman Sachs, so are the plans for some more fundraising still on?
Ans: Biocon Biologics raised ~USD 330 million from top global PE investors like True North, Tata Capital Growth Fund, Goldman Sachs and ADQ.As communicated earlier, the capital raised is being adequately deployed primarily to fund ongoing expansions and qualification of our manufacturing facilities, to support our R&D programs, and partly for the redemption of Biocon Limited’s preference shares in Biocon Biologics.
8. What is the overall outlook for the company’s biosimilars business for the next 3 to 5 years? What will be the drivers of growth and what are some of the risks that can affect your growth projections?
Ans: The Biosimilars opportunity continues to be attractive and we are well placed to pursue sustained growth in this business. We are amongst the few vertically integrated players with a proven track record of successful product approvals in developed and emerging markets with large scale manufacturing capacities to support our near term growth. The interchangeable designation for Insulin Glargine in the U.S. is a milestone achievement for Biocon Biologics and commercial preparations for relaunch by the end of the year are underway. We await product approvals for our biosimilar bevacizumab and insulin aspart in the US and these would contribute to our near term growth. These approvals are delayed on account of Covid related travel restrictions that impacted site inspections by the USFDA. Additionally, we benefit from an economic interest in an in-licensed biosimilar adalimumab that is launched in the EU and is expected to enter the US in about two years.
We have a broad and diverse biosimilar pipeline in development, straddling insulins and monoclonal antibodies, that would propel our growth over this decade. In summary, we expect to see growth for Biocon Biologics in the next 3-5 years on the back of key regulatory approvals, improved market shares and expansion of the commercial footprint of our existing portfolio to developed and emerging markets and launch of new products.