Biocon - The ultimate biosimilars play!


#225

Mylan stock jumped 3% last night. So market seems to have taken it in its stride and decided to move on. Govt and corporate tussle are not unusual. Biocon gets impacted only if Mylan operations are halted. As most of the US generic companies like Teva, Sandoz, Dr Reddy have been named it is unlikely that these companies will halt operations. They may be fined or individuals penalized. Life will go on.

Disc: Invested with 8% of portfolio. My views likely to be biased.


#226

Sold 2/3 of my holdings after big upswing for last 2 days. My fair valuation estimate was 400.

Just hedge against unknown. Continue to believe in long term story. Would be a buyer with 10% + correction.


(Gary) #227

Dear All,
I want to draw your attention to two posts on same subject and compare the tone .

So, a situation when the company got the rejection is being touted as a reason to rejoice. Yes - we heard that FDA did not raise questions on biosimilarity or efficacy of results et al. But FDA did ask more data and therefore cycle time goes up (at minimum).

The point I’m making is larger - I saw a similar commentary when the GMP concerns were raised by French authorities . Even the the company spun the story to be a positive one even though there was some 30 odd observations.

Is Biocon becoming one of those companies that is unable to be transparent with its investors?

Disc - I’m invested on the theme that everyone is but getting increasingly worried on reducing margin of safety (as BAU business seems to be going nowhere ) while upside seems elusive .


#228

Agree, reduced my holdings as it reached my valuation target for 18 end already. I guess 3rd Dec approval is already priced in. Will increase my holding if corrects by around 15%.


(Shivram) #230

May I understand your reasoning that the Dec approval is already priced in? We have no information on how much market share the biosimilars will garner at what price and biocon’ s share in it. How did you manage to value this at a 15% price range accuracy?


#231

I am guess this based on estimates given by MS, City, Axis etc which is around this price point and includes approval.


(saumya) #232

https://www.biocon.com/images/Resubmission%20of%20Dossiers%20with%20EMA%20Nov%207.png


#233

Looking at Lupin. Sector headwinds don’t seem to be going away. This will escalate the manufacturing cost.

Most generic companies struggling.


(eyesice) #234

http://www.moneycontrol.com/news/business/biocon-facility-gets-inspection-closure-report-from-usfda-2442355.html


(Mithun Raj) #235

Biocon Herceptin biosimilar approved by FDA: Ogivri (trastuzumab-dkst)


(kanvgarg123) #236

Amazing breakthrough for Biocon. The stock should be on fire on Monday. Disc hold very less qantity at 140 odd levels :slight_smile:


(Rohit) #237

Thanks Doc for the update. This is good news indeed. On a shorter term basis however, a positive FDA opinion on the Pegfilgrastim biosimlar would really help boost both the top and bottom line for FY 19, not to mention a EU approval for Trastu or Pegfil (as they are both off patent in the EU). Keeping my fingers crossed for that too. The FDA crl for Pegfil was primarily due to non compliance to GMP, Biocon has received an EIR for the facility recently & reapplied. Hopefully the FDA would opine soon on that too.


(NATARAJAN) #238

(Gary) #239

From what I gathered, Herceptin is about 2.5B market in US and given that Mylan has the exclusive marketing right and about 50% price erosion, the fact that Mylan has done some arrangement with Roche already - does this look like a meaningful impact to Biocon? (keeping aside the fact that the price movement would also be linked to having a proof point now).

Anyone who’s done bit of math on this?


(arunjacob) #240

This is a crude calculation with assumptions in xls ,as most details are not public.

image (US dollar in crores) in rupees(1 dollar =63rs)(in crores)
HERCEPTIN US SALE VALUE 250
After 35% price erosion 162.5
mylan market share (30% of total market) 48.75
Biocon topline contribution(35% of mylan market share) 17.0625 1074.9375
bottomline (40% margin) 6.825 429.975


(Bhupesh) #241

What are other bio similar for trastuzumab waiting for FDA approval? I believe there are 2-3 other players from India, one from Russia.


(Mithun Raj) #242

Apart from Roche (herclon), there are 7 other trastuzumab brands in India: Biocon (canmab), Emcure, Mylan( hertraz), Zydus, Lupin, Reliance life science and Torrent ( in descending order of marketshare).

Of these only Biocon -Mylan brand (Ogivri) was under FDA review and was subsequently approved.

There are 3 more trastuzumab biosimilars currently under both FDA and EMA review from Pfizer(Hospira), Amgen- Allergan and Teva- celltrion .

Samsung Bioepis Trastuzumab has been already approved by EMA.


(nprao) #243

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(Storyteller) #244

(Storyteller) #245