@rks00 FDA 483 for Biocon May 2018
Thought I’d share this article detailing the 340B change implications for Neulasta. The article is from earlier this year, but basically talks about the kind of market share that any biosimilar competitor can capture in a relatively short period of time.
Coherus’s projection is 13% or $500 Mn / year. We unfortunately don’t know the profit sharing arrangement between Mylan and Biocon, but for a company (Biocon) with $100 Mn in PAT, this could be a big deal. Fingers crossed for Monday!
U.S. FDA Approves Mylan and Biocon’s Fulphila™
(pegfilgrastim-jmdb), the First Biosimilar to Neulasta®
Why Prices is going down? inspite of giving approval
Good read about the State of Affairs in the Pharma sector and the future, as told in Lupin’s recent presentation here -
Biocon is the most prepared to reap the rewards in this future growth phase…though biocon never participated in the early stages, unlike the rest of the generic leaders.
“Buy the rumor and sell the fact” is happening here I think. Any way can’t believe that Biocon is the 4th pharma company in India by market cap. It will soon be 2nd after Sun in my view.
This years EPS is 6.21. My prediction for FY19 EPS is 18-20 (my guesstimate). The reason being peg-filgrastim sales in the US and glargine sales in Europe and Australasia.
Let us see what happens!
Life struggle of KMS
The Company confirms that Biocon has received an Establishment Inspection Report (EIR) from the USFDA for its Sterile Drug Product manufacturing facility in Bangalore, following the USFDA pre-approval inspection of this facility in April/ May 2018. EIR notifies that the inspection stands closed. Biocon is committed to global standards of quality and compliance.” Company Spokesperson
Biocon’s Sterile Drug Product facility receives EU GMP Certification https://www.bseindia.com/xml-data/corpfiling/AttachLive/8854f50c-3a6d-4d08-aac1-e9eb9602376c.pdf
Biocon is agreat company…after reading the biography of KMS, im pretty confident of management…they have already proved their mettle…
I wanted to share my piece of analysis of visible future price action based upon the prospects of Biocon…
The biosimilar play-
a) we have three approved products namely Glargine, trastuzumab and pegfilgrastim.
b) The total mkt pie for these products is around 18 Bn $.
c) Except for Glargine, biocon is first one to get FDA approval for rest two…so they will get
a first mover advantage…
d) to be conservative, i have assumed that the competition will follow and net price will
take a haircut of 50%…so the total pie will reduce to 9bn $… i have assumed a share of
20% for Glargine, 30% for Trastuzumab and pegfilgrastim…
e) Im assuming a 50% profit sharing with Mylan…
f) with these assumptions, the total revenue with these three products should hit 1.18bn
$…this should be realised over next three years i suppose…
g) Giving an avg net profit margin of 17%, the PAT comes to be 1344 Cr…
For Branded formulation i have assumed a growth of 10% yoy…this gives me a PAT ofRs 49 Cr with an assumed PAT margin of 8%…
For Syngene, i have assumed a growth of 15% in revenues…with a PAT margin of 15% and a &)% holding by biocon, it gives a net PAT of Rs 172 Cr for next year…
For small molecules, i have assumed a growth of 7%…with a PAT margin of 12%, it gives a PAT of Rs 194 Cr…
Im assuming that mkt will price in the possible growth for biosimilar products soon…so the comprehensive PAT stands at 1759 cr…tis gives an EPS of 29.31… alloting a PE rg of 25-30 will give a price of 732-880…
so entry can be made at the current prices with exit at 880…obviously, intro of new products will keep incr the assumed PAT and EPS in future…
Im planning to invest at current prices and i request comments from seniors on my calculations…