The world is just emerging from the economic impact of the COVID-19 pandemic. The people who suffered the economic fallout of the pandemic as their incomes shrunk, urgently need of access to cheaper drugs.
This has been the case not only in the emerging markets, but also in the developed countries. Generics and biosimilars which are proving to be more cost-effective for patients are the best solution to improve access to healthcare for many.
The benefits of the shift to generics and biosimilars may be gauged from the fact that the market for these two categories have been increasing at a rapid pace and Biocon Group has not sat idle, but has been working to provide a greater range of cost-effective solutions to an increasing number of patients in need of these medicines.
Biocon’s endeavor to build global health equity through affordable access to essential therapeutics has translated into good business growth for the company.
The Biosimilars business, which contributed 42% of the Group’s overall revenues for the quarter, reported a healthy operating performance on the back of higher sales of its insulins and antibodies in advanced and emerging markets.
Biocon’s Biosimilars business, which is housed in Biocon Biologics Ltd. (BBL), recorded revenues of Rs 997 Crore, a year-on-year growth of 34%.
Continued progress on two of BBL’s own research assets, which are undergoing global clinical trials, as well as other pipeline molecules, raised R&D investments this quarter by 142% YoY to Rs 184 Crore, representing 18% of BBL revenue.
Core EBITDA (excluding R&D, forex, licensing income and mark-to-market loss on investments) stood at Rs 449 Crore, reflecting a growth of 48% YoY. Core EBITDA margin was at 46% for the quarter versus 42% last year. EBITDA for the quarter at Rs 214 Crore was impacted by higher R&D investments and non-cash foreign currency translational loss of Rs 35 Crore pertaining to Goldman Sachs’ OCD investment in BBL.
On a comparative basis, last year’s EBITDA included a one-off gain of Rs 55 Crore from a mark-to-market movement on BBL’s equity investment in U.S.-based Adagio Therapeutics. Therefore, adjusting for the foreign currency translation loss and mark-to-market gains, EBITDA for the second quarter was at a similar level to last fiscal.
Profit Before Tax and Exceptional Items stood at Rs 78 Crore for the quarter.
Shreehas Tambe, Deputy CEO, Biocon Biologics, spoke to Business Today TV on the Company’s Q2FY23 financial performance.
Making a Difference in Advanced Markets
Through its long-standing partnership with Viatris, Biocon Biologics has been able to take its biosimilars to all the key developed markets, creating a strong track record.
In the second quarter, the Viatris-led advanced markets business reported a strong year-on-year growth on the back of an improved performance by interchangeable bGlargine (Semglee). In July 2021, the U.S. FDA had granted ‘interchangeability’ designation to Biocon Biologics’ biosimilar Insulin Glargine 100U, Semglee, which was a global ‘first’. The interchangeability approval allows automatic substitution of a biosimilar product for the innovator brand at the pharmacy counter. Following the interchangeability approval, Express Scripts and Prime Therapeutics, leading U.S. pharmacy benefit management managers, listed our biosimilar Glargine as the preferred insulin brand on their national formularies.
The increasing penetration of BBL’s interchangeable biosimilar Insulin Glargine in the U.S. is underpinned by the product’s total prescription market share trending around 12% while the share of new prescriptions are at 14%.
There had also been an increased uptake of Fulphila (biosimilar Pegfilgrastim) in the U.S. market, with its share surpassing 10%, despite the rising competition.
Ogivri, a key anti-cancer biosimilar, retained its position as the leading biosimilars Trastuzumab brand in Canada and Australia with a market share of about 30% in both.
“Biocon Biologics maintained a healthy operating performance in Q2FY23, driven by higher sales of our biosimilar insulins and antibodies in advanced and emerging markets. Core EBITDA at Rs 449 Crore was up 48% YoY, representing strong margins of 46%. R&D investments at Rs 184 Crore, an increase of 142% YoY, reflects the good progress of our pipeline laying the foundation for future growth of our business.”
— Dr Arun Chandavarkar, Managing Director, Biocon Biologics
Licensing our Two Biosimilars for Japan Market
During the quarter, Biocon Biologics made progress towards capturing the opportunity from biosimilars in Japan, which is the third largest pharma market in the world. Biocon Biologics out-licensed two of its own pipeline assets, biosimilar Ustekinumab for inflammatory conditions and biosimilar Denosumab to treat osteoporosis and cancer, to Yoshindo Inc. for commercialization in Japan.
These two products have an addressable market opportunity of ~USD 700 million in Japan.
Strong Showing in Emerging Markets
While the Company witnessed good performance of its products in the developed markets, business from the emerging markets also remained robust.
Biocon Biologics’ presence in emerging markets has been fortified through our organically developed B2B business. During the quarter, the Biocon Biologics-led commercial business reported good performance of its insulins and biosimilar Trastuzumab in key LATAM and APAC markets.
Biocon Biologics has been making biosimilars like rh-insulin, Glargine, Trastuzumab and Bevacizumab available to patients in key emerging markets through partnerships with leading local pharmaceutical players. Our insulins continued to hold a double-digit market share in countries like Malaysia, Mexico and Morocco.
Our business in the Latin America region continued to show a strong performance, especially in the markets of Mexico, Argentina and Brazil.
Biocon Biologics also won tenders for its biosimilar monoclonal antibodies portfolio in the AFMET (Africa, Middle East and Turkey) region, which are expected to contribute to its revenues progressively in the second half of the current financial year.
The consolidation of Viatris’ global biosimilars business and the strategic vaccines alliance with Serum Institute will add to the growth of the Biocon Biologics in the second half of FY23.
Scoring High on Sustainability
While business growth is critical for the company, sustainability is amongst Biocon Biologics’ topmost priorities, and the company is committed to build a sustainable future.
The initiatives undertaken during the past year ensured that Biocon (including Biocon Biologics) improved its ESG score to 52 from the previous year’s score of 45 in the 2022 S&P Global Corporate Sustainability Assessment released in October 2022.
A Blog by Biocon 