Biocon’s growth strategy appears to be its collaboration with MNCs, biosimilars and novel drug pipeline to drive ahead.
Biocon’s growth strategy appears to be its collaboration with MNCs, biosimilars and novel drug pipeline to drive ahead.
The Bangalore-based company, which entered into a partnership with US-based Mylan Labs in June this year, for the development, manufacturing, supply, and commercialisation of biosimilars, is expected to get about Rs 10 crore every quarter as licensing income from Mylan.
“Both Mylan and Biocon are expecting to secure a market leader position in the biosimilar space and much larger returns are expected post 2014, when the regulated markets open up,” said chairman and MD of Biocon, Kiran Mazumdar Shaw.
Biosimilars or follow-on biologics are off patent versions of biopharmaceutical drugs.
Estimates suggest that by 2016, about $25 billion worth of biologics would lose patent protection. The market for biologics is said to highly lucrative, with the potential being about $60 billion in the US, $30 billion in EU, and about $5 billion in the rest of the world.
“Biocon and Mylan are looked at as strong players in this space,” said Shaw.
Biocon, which is spending about Rs 80-100 crore on R&D this year, appears very optimistic about its novel drug pipeline, specially, its oral insulin drug which is expected to be out in the market by early 2011. Data from Phase III trials for the drug, IN 105, are expected to be completed by June 2010.
The drug, apart from being insulin in oral form, carries the advantages of producing neither weight gain, nor hypoglycemia (a state produced by lower than normal glucose level) in patients, and would therefore be a blockbuster, generating more than $1 billion in annual sales, if it were to be successfully introduced in the market.
According to Shaw, based on the outcome of the Phase III trials for IN 105, Biocon will pursue a market strategy of launching in India first. “We expect to realise a large licensing opportunity with this molecule, and if all goes well, we would be the first company in the world to have insulin in oral form.”
However some pharmaceutical industry experts don’t share Biocon’s optimism for oral insulin. An analyst with a securities firm in Mumbai said no value can be assigned to the oral insulin molecule at present. “Phase III data is yet to be out. Even if all goes well then, the drug has to be monitored later for side effects, etc. So, to analyse the sales potential of this drug at this moment would be pre-mature.”
According to A K Jhingan, chairman, Delhi Diabetic Research Centre, the oral insulin would be a big relief for diabetics who have to at present inject insulin into their bodies. “The cost factor will also have to be looked into when it enters the market. How much of a difference it can make will only be understood later.”
Biocon’s other key molecule, T1h, for psoriasis and rheumatoid arthritis (RA) is also showing promise, said Shaw, adding that Phase III trials for psoriasis will commence by calender end, and Phase III for RA will start in next calendar year.
The global market for autoimmune diseases, under which both RA and psoriasis fall, is about $ 37.84 billion and expected to reach $68.81 billion by 2014.
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